Julia L F Goldstein

How Are You Changing the World?

You Get What You Pay For

Sep 16, 2017 by Julia L F Goldstein

Many people are of a mindset that goods should be inexpensive and services should be free. The problem with that approach is that you often get what you pay for. Cheap products break easily. Free services may not deliver what you need.

Unfortunately, paying a high price is no guarantee of quality. The high-end Lenovo laptop I bought seven months ago, for example, has experienced multiple problems requiring me to send it out for repair. At least it’s still under warranty. If it doesn’t work properly when I pick it up this time, I am going to demand a refund from Lenovo.

I’m writing this blog post on my old computer, which is frustratingly slow and sometimes cannot connect to the internet. I bought the “old” computer in 2013. After enough people told me that 3-1/2 years is a long lifespan for a laptop and I should stop getting it repaired, I broke down and bought a new one.

I am far from the first person to bemoan the disposable society. Planned obsolescence is not limited to consumer electronics, though that is the area where it seems most prevalent today. Products are designed with frequent replacement in mind. Marketing campaigns are designed to convince consumers that they must have the latest and greatest version.

This approach does drive innovation – one of the positive effects that manufacturers are touting – but also creates a great deal of waste. An obscenely high number of cell phones are discarded every year, not because they no longer work, but because they have been replaced by newer models.

Consumer electronics aside, there is a subset of consumers willing to pay more for products that will last. Many people, however, find it hard to look beyond the price tag and evaluate the entire life cycle of the product. If the more expensive option costs a bit more but lasts twice as long or has lower maintenance or consumables costs, it can be a better value.

This topic is on my mind because I am considering buying a new barbecue. Yes, I realize that September is not the start of prime barbecuing season, but one too many parts have broken yet again on the old barbecue. I inherited it from the previous owners of my house, and it is built into an outdoor island. The problem is that this barbecue not only is an inexpensive brand prone to malfunction, but it is designed to be a standalone barbecue. Two years ago, I spent hundreds of dollars replacing nearly all the innards, but I am about to give up.

Retrofitting the island for a proper built-in barbecue will be expensive, but hopefully will be worth it. If I buy a durable barbecue and have it installed properly, it should give me many years of trouble-free use. I envision the joy of having a barbecue that heats up quickly and evenly, and adjusts easily to cook food to perfection. For this, I am willing to spend a little extra up front.

When buying services, it can be hard for the customer to understand the benefit of an option that seems on face value to be more expensive. The benefits, like those of a perfectly grilled dinner, may seem intangible. But the money spent to get a loan that will enable you to expand your business or to create website content that will drive more customers to your products will probably pay off in the long term.

This reminds me of the game Empire Builder. It is one of a series of games in which players pay money to build railroads, which they draw in crayon on a map game board. I happen to own versions covering the U.S., India, and Europe, which is why I can quickly find Duluth, Varanasi or Marseilles on a map. Players earn money by satisfying demand cards – a city will pay a certain amount to get a particular commodity, which is available in other cities on the game board. The idea is to build a network of railroads to connect cities with commodities to those wanting to buy the commodities, and move your game piece along your railroads to earn payouts. Near the beginning of the game, it is necessary to pay just about all the money in your possession to expand your railroads. If you skimp on building early, thinking the roads are too expensive, you will be sorry later when other players have a better network and can satisfy demand cards without building any more railroads.

[caption id="" align="alignnone" width="2500.0"] Empire Builder game in progress with three players and example demand cards. Empire Builder game in progress with three players and example demand cards. [/caption]

In real life, the strategy is not so clear as it is in the Empire Builder games. It is not easy to decide how much to invest in a business or home improvement project and what to buy. Those of us providing business-to-business services often come across potential clients who think that these services should be free, or think they can do it themselves. But doing it yourself takes time that might be better spent on activities directly related to your business, and the results may be disappointing.

My overall takeaway is to look at the long term when considering the total cost of goods and services. Saving money on a purchase today may not pay off down the road.