Racing to the Bottom

[Jim Koepke]

Reading an article in the business section this morning and came across this line, "But for many companies, the cost-cutting is worth a drop in quality."

OMG! That seems to be the mission statement of too many large businesses.

Do they even consider what customers will think about dropping quality to increase profit?

jtk

[Brian Elfert]

Most times I would rather pay more for a better built product. I am looking at solar showers right now. They cost as little as $10, but pretty much all of them have complaints about the plastic tearing, or the shower nozzle falling off and the water pouring out.

The other thing I hate is shrinkflation for food. Just charge me more if you need to, but keep the quantity the same. Some food will shrink and shrink in quantity until the manufacturer comes out with a "new" larger size that costs more and is the same quantity it used to be.

[Patty Hann]

Reading an article in the business section this morning and came across this line, "But for many companies, the cost-cutting is worth a drop in quality."

OMG! That seems to be the mission statement of too many large businesses.

Do they even consider what customers will think about dropping quality to increase profit?

jtk

Jim, can you provide a link to that article? Thx

[Patty Hann]

Most times I would rather pay more for a better built product. I am looking at solar showers right now. They cost as little as $10, but pretty much all of them have complaints about the plastic tearing, or the shower nozzle falling off and the water pouring out.

The other thing I hate is shrinkflation for food. Just charge me more if you need to, but keep the quantity the same. Some food will shrink and shrink in quantity until the manufacturer comes out with a "new" larger size that costs more and is the same quantity it used to be.

Yep... and the new larger size is often called "Family size".
(So the shrunken one must be for a "family" of, oh, 1.7 people, I guess. :rolleyes:)

[Bill Dufour]

Yep... and the new larger size is often called "Family size".
(So the shrunken one must be for a "family" of, oh, 1.7 people, I guess. :rolleyes:)
No, it was for 1.5 people. hence the term "half assed".
Bill D

[Stan Calow]

Most times I would rather pay more for a better built product. . .

Sadly, most people won't. Or can't afford to. Price is the biggest criteria most consumers base decisions on, whether it's airline tickets or underwear. And customers show no loyalty if there's a price difference. Companies priority is to make money for shareholders, not make good long-term customer relationships.

"The other thing I hate is shrinkflation for food. Just charge me more if you need to, but keep the quantity the same. Some food will shrink and shrink in quantity until the manufacturer comes out with a "new" larger size that costs more and is the same quantity it used to be."

I was just opening a new package of Oreos, and noticing their tiny size compared to the old days. Again, people only look at the price, and most people cant do the math to realize that there's less product. A pound of bacon is now 12 ounces, and a pound of coffee is 13 or less.

[Brian Elfert]

Sadly, most people won't. Or can't afford to. Price is the biggest criteria most consumers base decisions on, whether it's airline tickets or underwear. And customers show no loyalty if there's a price difference. Companies priority is to make money for shareholders, not make good long-term customer relationships.


I'm not saving any money if an inferior product needs replacement often. I also probably won't patronize a company a second time if they don't make a quality product. A couple I know buys a new gas grill every two to three years for $200 to $300. They don't understand a quality grill for two or three times as much would cost less in the long rune.

[Earl McLain]

Reading an article in the business section this morning and came across this line, "But for many companies, the cost-cutting is worth a drop in quality."

OMG! That seems to be the mission statement of too many large businesses.

Do they even consider what customers will think about dropping quality to increase profit?

jtk

Winston Churchill would have seen the opportunity in the difficulty of profit & loss...or at least would have looked for it!! Love that sig-line Jim!!

[Mike Henderson]

A couple I know buys a new gas grill every two to three years for $200 to $300. They don't understand a quality grill for two or three times as much would cost less in the long rune.

Some people can only afford the lower cost unit. In the long run, it costs them more money but...

Mike

[Jim Koepke]

Jim, can you provide a link to that article? Thx

Yes, it is about AI taking over in more professions formerly occupied by humans:


Technology used to automate dirty and repetitive jobs. Now, artificial intelligence chatbots are coming after high-paid ones.

> https://www.washingtonpost.com/technology/2023/06/02/ai-taking-jobs/

jtk

[Edwin Santos]

In business school we were given a case study about Henry Ford. After the Model T had been out for several years, he sent a team of guys to scour the country and find junked Model Ts to send back to Dearborn for examination. Everyone assumed he wanted to identify the failed components to try and make them more durable. In fact he wanted to identify the components that were still in good shape so they could be re-engineered to a lower quality and ideally last no longer than the rest of the car. A perfect scenario would be the entire car falling apart at once like Jake and Elwood's Bluesmobile.

For a business however, it becomes a mission critical task to find the right balance between quality, price and their typical customer's objectives. Personally I too try to buy higher quality things for the long view reasons that others have mentioned.
Choices are key.

[Jim Koepke]

Winston Churchill would have seen the opportunity in the difficulty of profit & loss...or at least would have looked for it!! Love that sig-line Jim!!

It is one of my favorites.

There are a couple others that come to mind:

"There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey." - John Ruskin

“Whether you think you can, or you think you can't – you're right,” - Henry Ford

jtk

[Patty Hann]

Yes, it is about AI taking over in more professions formerly occupied by humans:



> https://www.washingtonpost.com/technology/2023/06/02/ai-taking-jobs/

jtk

Thankee --p.

[Jim Koepke]

Some people can only afford the lower cost unit. In the long run, it costs them more money but...

Mike

Some times the market is flooded with lower cost items because many retailers do not want a reputation for being "the high priced store."

One example that hits home for me is garden hose shut off valves. For years I have been buying them at various retailers and replacing them as they fail. It is fortunate if they last for more than a couple years.

Recently an email from Lee Valley had garden items listed. I knew they had the shut off valves of my dreams:

502536

When discussing this with a friend over emails, at first he seemed excited. Then he found these on Amazon:

502535

He ordered them and had to do a little work on one or two of them. But he did say he might order a second dozen just to have them over the years as they failed or got stepped on.

Candy finds the small levers on the inexpensive plastic and brass valves hard to turn.
For me the LV units have a larger opening in the ball valve to allow better water flow. The commonly available units have an opening of ~1/2". The LV units have an opening of ~5/8"

Some of the brass units used in the past have not lasted a full year. Some have lasted a few years. The ones that look just like the ones used in the past are ~$5 each on Amazon. They may have been a bit more at one of the Borg Stores.

I'm betting the cost of the LV will pay for itself over the next few years. They likely won't start leaking or causing other problems like the less expensive versions.

Another thing I like about them is the valve handle can be flipped. As it is shown in the image the lever turns toward the nozzle when in the on position. For me this gets in the way of my assortment of hose end tools. So the handle was flipped an now turns toward the hose. The bolt for the LV valve is 1/4" (I think). The screw on the lesser valves is often a ~#6 screw for threading into plastic and is often where the leaking starts.

jtk

[roger wiegand]

We have a bunch of three way valves. After fighting with the plastic and chinesium models for a decade I finally came across the LV ones. I'm in heaven-- they work, every time, even after sitting for the winter. I can get the hoses on and off without anything breaking. I can turn the water on and off without the handle coming off in my hand or rotating uselessly on the valve stem. I'm a very happy customer! Expensive? Not nearly as much as the high frustration ones.

[mike calabrese]

Why not it works for Walmart
calabrese55

[Stan Calow]

A couple I know buys a new gas grill every two to three years for $200 to $300. They don't understand a quality grill for two or three times as much would cost less in the long rune.

Or maybe they do know, just only have $200 in hand to spend and need a grill. That's the dilemma making choices that many people have.

[Malcolm McLeod]

Sadly, most people won't. Or can't afford to. Price is the biggest criteria most consumers base decisions on, whether it's airline tickets or underwear. And customers show no loyalty if there's a price difference. Companies priority is to make money for shareholders, not make good long-term customer relationships.

"The other thing I hate is shrinkflation for food. Just charge me more if you need to, but keep the quantity the same. Some food will shrink and shrink in quantity until the manufacturer comes out with a "new" larger size that costs more and is the same quantity it used to be."

I was just opening a new package of Oreos, and noticing their tiny size compared to the old days. Again, people only look at the price, and most people cant do the math to realize that there's less product. A pound of bacon is now 12 ounces, and a pound of coffee is 13 or less.

A bit of anecdotal back-up….
My grandfather owned/ran a grocery store for virtually his entire life. He sold on credit, delivered and put ice cream in the freezer, and had a custom butcher shop in his ~2000sqft store. Known customers would run in, grab 3 cans of beans and a bag of chips, hold them up for the clerk to see as they ran out, and yell “Add them to my bill!”

The same customers (and his neighbors) would complain bitterly that his green peas were 2 cents higher than the Piggly Wiggly 4 miles away.

Sadly most people WILL… ignore value and convenience to save 50 cents.

[Bruce Wrenn]

Every week, I use a bunch of Blue Bonnet stick margarine making biscuits (2 1/4 sticks.) Last year was paying $1.69 for two pound box ( 8 sticks,) now am paying $1.69 for a one pound box ( 4 sticks.) When Aldi's puts their in store brand of butter on sale, it's less than a quarter difference between margarine and butter. I shop both price and quality. For my biscuits, there are only three brands of self rising flour that I will use. Tried the "store brands" but they didn't meet my standards. Which of the three brands I use is dependent upon which brand is on sale. Local Food Lion carries three different prices of milk, all of which are put up by same processing plant. If you are a roll sausage lover, try Aldi's Appleton Farms sausage. In our market, it sells for $2.29 a roll (16 oz.) I will put it up against any of the premium brands. As a store, Kroger ( no longer in our market area) has the best rated store brands, year after year.

[mike calabrese]

A bit of anecdotal back-up….
My grandfather owned/ran a grocery store for virtually his entire life. He sold on credit, delivered and put ice cream in the freezer, and had a custom butcher shop in his ~2000sqft store. Known customers would run in, grab 3 cans of beans and a bag of chips, hold them up for the clerk to see as they ran out, and yell “Add them to my bill!”

The same customers (and his neighbors) would complain bitterly that his green peas were 2 cents higher than the Piggly Wiggly 4 miles away.

Sadly most people WILL… ignore value and convenience to save 50 cents.

Malcolm I cringed when I read your post . My family ran an IGA grocery store . I started working there when I was 7 helping my dad and uncle in the store. The customer tale you tell was exactly the same in our situation.
The store and the house I grew up in were all in the same building. I could walk through a door in our kitchen and be in a fully stocked grocery store the store. The customers we had were mostly good to a point and all neighbors . The village population back then was way less than 8,000 . Back then there were the blue laws , stores could not be open on Sunday period.
As we lived adjacent to the store and everyone knew this, folks would come anytime on Sunday and knock on our house door to get a couple of items they needed. Interruptions all day and naturally all on the tab because the store was not open. When the family finally stopped this Sunday back door donation thing the customers were brutal to us.
The store after 31 years closed in 1964.

Similar situation we have a indian tribe in our town they have a government recognized reservation a convenience store , gas station and a couple of small casinos. There are folks here in town that complain because the tribe pays no taxes anywhere even off the reservation. These same folks can be seen doing business with the tribe for their cheaper cigarettes , auto gas and the slot machines. Talk about the race to the bottom .
calabrese55

[Bill Dufour]

I bet the tribe would be happy to pay taxes if those complainers gave them back all their real estate for free. Or maybe the tribe could pay the taxes by giving back rights to property in town like for a million dollar tax bill we give up all rights to the land under road around the the grade school.
Bill D

[Malcolm McLeod]

I bet the tribe would be happy to pay taxes if those complainers gave them back all their real estate for free. Or maybe the tribe could pay the taxes by giving back rights to property in town like for a million dollar tax bill we give up all rights to the land under road around the the grade school.
Bill D

Relatively certain Mr. Calabrese took issue with 'folks', not 'tribe'. But maybe that is just my bias in reading?

[mike calabrese]

Relatively certain Mr. Calabrese took issue with 'folks', not 'tribe'. But maybe that is just my bias in reading?
Thanks Malcolm you are correct I have no issues with the tribe. The pale faces (I am one of Italian heritage) of many years ago screwed the Native Americans out of their lands.
My point is, was, you can't have it both ways today, you can't complain the no tax thing all the while you are in line at their stores to save a couple of pale face $.
Find a side of the fence you like and stay there.
calabrese55

[Rod Sheridan]

Jim, my Lee Valley shut off valve is around 10 years old and works as well as when it was new.

It also sits outside winter and summer.

I find it’s always worth buying quality items……Regards, Rod.

[Jim Koepke]

Jim, my Lee Valley shut off valve is around 10 years old and works as well as when it was new.

It also sits outside winter and summer.

I find it’s always worth buying quality items……Regards, Rod.

Thanks Rod, I am so far happy with mine and wish I had purchased one or two more. Oh well, next order may be soon.

jtk

[Alex Zeller]

Reading an article in the business section this morning and came across this line, "But for many companies, the cost-cutting is worth a drop in quality."

OMG! That seems to be the mission statement of too many large businesses.

Do they even consider what customers will think about dropping quality to increase profit?

jtk

It's not always to increase profit. In fact it's usually to keep the product the same price and not pass on other expenses that have increased. For example, the cost of labor has gone up so find easier ways or reducing parts means less labor to assemble something. Of course there are limits which is in part why we have inflation.

[Bruce Wrenn]

It's not always to increase profit. In fact it's usually to keep the product the same price and not pass on other expenses that have increased. For example, the cost of labor has gone up so find easier ways or reducing parts means less labor to assemble something. Of course there are limits which is in part why we have inflation.50+ years ago, MAGNA made Sears' rototillers. The side of the gear case was held on with high strength bolts, with SPECIAL hardened lock washers. Some bean counter decided to use Loctite instead of lock washers to save a couple pennies per tiller. Failures started with in months (under warranty.) Didn't take long for the special hardened lock washers to return. Quality is like buying oats. If you want nice fresh clean oats, then you have to pay. Those that have already been thru the horse are much cheaper!