A wonderful thing about the Internet is that it has made us all expert shoppers. Before a major purchase we go online to compare and contrast product features, and then choose the product that best meets our criteria. From the disappointments of purchasing junk with our hard earned money, we learn the hard way to believe in quality. But the reason we need to be such discerning shoppers is because business operates on a different set of principles from consumers. Business puts profit head of quality.
The cheaper and faster a business can produce a product the more profit that business makes. Quality adds both time and costs to the product, to increase profits most businesses will tend to conserve these costs to the maximum extent possible. Businesses that specialize in quality products are the exception, not the rule.
Since the 1950s America has had a love affair with automobiles, yet Americans spend more on Japanese cars. Americans perceive that Japanese cars are higher quality and American automakers cannot compete. This is because about $2000 of every new car purchased needs to pay union entitlements for retired American autoworkers, so the American automotive industry need to squeeze that extra $2000 out of each car. This is accomplished with little decisions like using cheaper nylon fasteners instead of screws, cheaper molded gears, or a cheaper quality glass that is more prone to breakage. But you cannot fool consumers for long and this was proven in the “cash for clunkers” program, which helped the Japanese automakers more than American automakers. And even with multi-billion dollar government bailouts to save it, the American automakers will go extinct like RCA because most consumers want quality..
When it comes to skimping on quality, the automotive industry is not unique. The same “Bell System” that invented a telephone that would last 35 years is no longer in business. Today you would be lucky to get three years from a telephone, which is why most cell phone contracts allow us to get new cell phones every two years. Even look at computers today, they are manufactured like American cars, to be serviced. You can replace the power supply in a name brand computer in about 30 seconds; and you do not even need a screw-driver. This gives the manufacturer the license to put cheaper parts into your computer and then charge you even more for the service. In addition, many popular brand computers use non-standard connectors internally, so you are forced to use them alone for service. All business plays these games with consumers to increase their profits, not quality.
Every time we buy something over about $35 the salesperson asks, “Would you like a service contract on that?” Service contracts are another big scam of how business profits off poor quality; the service contract is an insurance policy that you pay for in case the business skimped too much on the quality. Think about it, business saves money by manufacturing a piece of junk and then the consumer pay for the service contract to lower the business cost and obligation to fix that junk when it breaks. The consumer is paying twice, (1) they are overpaying for the poor quality and (2) they pay to purchase the service contract to insure against that poor quality.
You only need a service contract on junk; something of high quality is not going to disappoint you. And a decent manufacturer stands behind his product warrantee even without a service contract. If you are dumb enough to buy a service contract on a high quality item, business loves you as a customer because you are increasing everyone’s profit.
As we slip deeper into recession some of us might not always be able to afford the best quality. Just remember, even in this economy business is still more than happy to sell you junk and pawn it off as quality. This is how business makes more profit. And of course they then sell you the service contract so it costs them nothing when that junk breaks.