More than Life than Cost

When is low, too low? Or: Is there more to life than cost?
By Paul Herbig

"There is hardly anything in the world that some men cannot make a little worse and sell a little cheaper."
- John Ruskin

The last few years has seen an America obsessed with cost: ever driven to achieve lower and lower costs with nothing low enough. Walmart’s obsession with cost and being the lowest imaginable has caused not a few of their suppliers to go bankrupt: what they lost per unit they tried to make up in volume. It has forced most of its suppliers to locate overseas contributing to the offshoring debacle and the immense trade deficit. It is not the only corporation so inclined: The Automotive industry has challenged it suppliers to cut costs to meet Chinese levels or beware the consequences. Of course, America’s consumers are not short of blame: in their effort to find the cheapest items, to cut pennies off items, they have made Walmart the largest corporation in the world and in the process destroyed the business infrastructure of a thousand small towns. But what the heck, we saved a few pennies didn’t we?

Which makes me wonder (Yes I do question life and its perplexities a lot). Is there more to life than cost? Is life supposed to be all about finding the cheapest item always, no matter what the eventual cost? Let us presume it is. If true, we would all be driving Yugos, living in mobile homes, wearing hand-me-down clothes until they turned to rags, eating spam and mac ‘n cheese every day, using old crates for furniture, drinking Boone’s Farm at McDonald’s for that big dinner date, and rolling your own. Let’s take a roll call of readers: how many fall into this category? I’m still searching. Just what I suspected: none.

If there is more to life than the cost of an item then what are they? Why buy a Chevy, A Ford, a Chrysler rather than a Yugo? Perhaps it deals with reputation, quality, reliability, service, support (not to mention safety!). We are willing to pay additional for these items. Why then do we buy SUVs or MiniVans? Perhaps it is because we need to ferry more than 2 people at a time (in the case of some soccer moms or dads an entire team). Then it is worth paying more for to have the features and capabilities we seek. The boss is in the market for another vehicle and she will only consider minivans. Why? Because in one she sits up high and feels more in control than in a street hugging vehicle. Is she willing to pay more for that function: of course.

Let’s take the analogy one step further. Why would anyone want to purchase a BMW, Porsche, or Mercedes Benz when they can get the same transportational capabilties for a lot less? Because they want more, the prestige, the status, the eye-turning vehicle, than just a mere engine and four wheels. And then, if given the choice, would you buy from your reliable dealer Jim, a trusted family friend for over 20 years, with whom you have purchased three vehicles and have had them serviced without problems for that entire length of time, or from Friendly Al, the shady new dealer just down the street who offers you the same car for $100 less. I do not know about you but I would choose Jim every time. Why? There is a lot less risk with a known tried entity than with an unknown. Does that mean I am willing to pay more for dealing with Jim. Yes. I know he will be there tomorrow if I need him; I have no such confidence with Friendly Al.

Is there more to life than mere cost? Yes. Than why are we as consumers, as industrial customers, so penny-wise and pound foolish? Why stop doing business with an American firm whom you have dealt with for fifty flawless years to buy from a new Chinese firm just to save a few pennies? Is it worth ignoring Old Joe, the bicycle shop owner, whom you have purchased three bikes from and have had serviced and repaired without failure, who has given you flawless advice, taught your kids the essentials of bike safety at no extra cost, just to save $5 or $10 at an unnamed big box Discount store and as a consequence see Old Joe go out of business? Who then will fix your bikes? Who will help your grandkids? Not the big box store for sure.

Isn’t it about time we view the future and examine the consequences before running to save a few pennies? There is a lot more than just cost in life and we ought to consider those factors before our next purchase.