3 ms·

Because our economic structure doesn't reward superior products, it rewards cheaper products. So such organisations get outcompeted.

WalterBright 1y ago
But people here say they want superior products. So why do they buy the cheapest, instead?
- AnimalMuppet 1y ago
  1. "People here" are a very small fraction of the economy. They may in fact buy superior products over cheap ones, but their numbers are too small to matter much. 2. People don't always do what they say. They want superior quality, but they also want it at the same price as the inferior alternative. When push comes to shove, which will they choose? Not all will choose quality over cheapness. That doesn't mean they didn't want quality. It just means they didn't want it as much as they say they did.
  - ramses0 1y ago
    Also "market for lemons"- a friend told me she used to go to Macys/Dillards to buy $50 bath towels b/c they were better, nicer, more durable than the $20 ones from Walmart. Now she goes and still pays $50 for them, but they have been stealthily replaced by the equivalent of the inferior $20 ones. It becomes a market for lemons: you can't trust that paying more for a product gets you a better product so game theory says you have to pursue price minimization at all costs.
- wizzwizz4 1y ago
  You've forgotten your Pratchett. Quoth Men at Arms: > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. > But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. > This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness.
- nicoburns 1y ago
  The product people really want often isn't on the market at all. I speak of a product that is: - Mass produced at scale - High quality and will "last a lifetime" (a long time) - Repairable when it breaks down I believe that many people would happily pay a 20%, 50% or even 100% markup for such a product, but often often all of the available mass produced options are shitty quality (and the choice is between a bargain option or a "premium" option that is just as crappy quality but costs more because of the brand name). There might be a "boutique" hand-crafted alternative, but it will cost 5-10x more. The other problem is imperfect access to information. Even where there is superior alternative on the market, it is often very difficult for consumers to determine which one it is. Which means they can't choose it. Which further means, there is no incentive for manufacturers to produce it.
  - creer 1y ago
    > 20%, 50% or even 100% markup for such a product I don't know that this is realistic. Like you recognize, there ARE usually boutique higher quality products - at significantly higher prices. There are also nearly always product management-based, "higher end" product lines. And the quality of these is only sometimes better. And they are not often repairable probably. I think there is a significant issue with achieving "Mass produced at scale" together with "lifetime and repairable (ie, parts available and easy to replace)". Without people going out of their way to be evil, see lightbulb lifetime mgt, it's easy to be too expensive to miss the "mass produced" window, and your price might be much higher. Not just 20% higher. Chinese companies built massive factories to corner the market on specific products. Years ago, see the halogen torchiere market. Suddenly the world was flooded with torchiere halogen lamps for an insanely low price. ... a price so low that nobody could really complain that spare parts were not available. These stunts must have been very expensive. An all or nothing bet on a market. Nowadays, you get factories that make ALL the models of, say, steam irons for basically ALL the brands. These factories take care of some of the issue of quantity-related low price, by sharing parts and processes between all these brands. But could they be competitive in price on smaller runs of steam irons with replaceable parts? Plus the cost of stocking and distributing these parts? I don't know.

WalterBright 1y ago

But people here say they want superior products. So why do they buy the cheapest, instead?

AnimalMuppet 1y ago
1. "People here" are a very small fraction of the economy. They may in fact buy superior products over cheap ones, but their numbers are too small to matter much. 2. People don't always do what they say. They want superior quality, but they also want it at the same price as the inferior alternative. When push comes to shove, which will they choose? Not all will choose quality over cheapness. That doesn't mean they didn't want quality. It just means they didn't want it as much as they say they did.
- ramses0 1y ago
  Also "market for lemons"- a friend told me she used to go to Macys/Dillards to buy $50 bath towels b/c they were better, nicer, more durable than the $20 ones from Walmart. Now she goes and still pays $50 for them, but they have been stealthily replaced by the equivalent of the inferior $20 ones. It becomes a market for lemons: you can't trust that paying more for a product gets you a better product so game theory says you have to pursue price minimization at all costs.
wizzwizz4 1y ago
You've forgotten your Pratchett. Quoth Men at Arms: > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. > But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. > This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness.
nicoburns 1y ago
The product people really want often isn't on the market at all. I speak of a product that is: - Mass produced at scale - High quality and will "last a lifetime" (a long time) - Repairable when it breaks down I believe that many people would happily pay a 20%, 50% or even 100% markup for such a product, but often often all of the available mass produced options are shitty quality (and the choice is between a bargain option or a "premium" option that is just as crappy quality but costs more because of the brand name). There might be a "boutique" hand-crafted alternative, but it will cost 5-10x more. The other problem is imperfect access to information. Even where there is superior alternative on the market, it is often very difficult for consumers to determine which one it is. Which means they can't choose it. Which further means, there is no incentive for manufacturers to produce it.
- creer 1y ago
  > 20%, 50% or even 100% markup for such a product I don't know that this is realistic. Like you recognize, there ARE usually boutique higher quality products - at significantly higher prices. There are also nearly always product management-based, "higher end" product lines. And the quality of these is only sometimes better. And they are not often repairable probably. I think there is a significant issue with achieving "Mass produced at scale" together with "lifetime and repairable (ie, parts available and easy to replace)". Without people going out of their way to be evil, see lightbulb lifetime mgt, it's easy to be too expensive to miss the "mass produced" window, and your price might be much higher. Not just 20% higher. Chinese companies built massive factories to corner the market on specific products. Years ago, see the halogen torchiere market. Suddenly the world was flooded with torchiere halogen lamps for an insanely low price. ... a price so low that nobody could really complain that spare parts were not available. These stunts must have been very expensive. An all or nothing bet on a market. Nowadays, you get factories that make ALL the models of, say, steam irons for basically ALL the brands. These factories take care of some of the issue of quantity-related low price, by sharing parts and processes between all these brands. But could they be competitive in price on smaller runs of steam irons with replaceable parts? Plus the cost of stocking and distributing these parts? I don't know.