Cost Vs Price – It May Not Be What You Think
When it comes to cost vs price not many folks know there is a difference or perceive there may be a difference. I was on of those at one time. These terms seem to be interchangeable at will, but are they really interchangeable.
We shall see as we go along and you will see if you do not agree with me.
My wife has a saying of, “It only costs a little more to go first class.” The adage was almost always correct, when it came to me anyway. You see, I am a cheap skate. I will try to dodge the bullet every time when buying something. I am always looking for the “better deal”.
The “better deal” is not always the better deal. If we take buying a bicycle as an example we might be able to draw line between cost and price.
All things being equal we must start off Even Steven. So both bicycles must be new to begin with. I know nothing of the price of bicycles so I will be working purely in the world of make believe for illustration purposes.
Bicycle A is priced at $159.00 on the sticker tag hanging on the handlebar. Bicycle A comes standard with two tires. It has air conditioning (if you peddle fast enough) and an air horn and a seat. It also has two peddles and a reflector fastened to the rear fender. And, it also comes assembled.
Bicycle B is priced at $215.00 on the sticker tag hanging on the handlebar. Bicycle B comes standard with two tires, no air horn and a seat. It also has air conditioning (if you peddle fast enough), two peddles and a reflector attached to the rear fender.
Both bicycles look very much alike and when asked what the difference is you are told $56.00 and change as far as the salesman knows.
So, for the sake of $56.00 and change you opt to get the $159.00 bicycle A.
Little Johnny or Suzy (sorry if your name happens to be Johnny or Suzy) really likes this bicycle and it looks like a good bicycle. So you carry it home in the trunk of your not so new Kia for the pack away price of $170.98 and you are patting yourself on the back and laughing all the way home over the great deal you made on this sweet machine.
When you get home you break it out of the cardboard box and wrapping and begin to assemble this beauty. What looked to be so simple a child could do it, only took you about five and half hours of which about four and half of them were accompanied with language to embarrass a sailor and little Johnny or Suzy was allowed in the house during the time of assembly.
When the sweet purchase was finally handed over to little Johnny or Suzy you breathe a sigh of relief and take the trash to dumpster down the street because you did not have room for it in your garbage can. What you did not notice was the sign saying cheaters would be prosecuted for dumping in a private container.
The guy running the lounge was just coming out to dump a couple of bags of beer cans and bottles and just spotted you driving away in time to get your license number. Forty-three minutes later two gentlemen dressed in blue arrive at your residence to confront you about your deed, which of course you deny.
Just then little Johnny or Suzy rides up on their sweet new bicycle and proudly shows it off to the gentlemen dressed in blue and proudly beams at daddy for putting it all together for them and he has just got back from getting rid of of the big ugly box.
You are issued a citation and a notice to appear in city court in no less than ten days. After taking off half a day to go to court you are fined $180.00 plus court costs $250.00. The cost of your sweet deal is now only $610.98 not counting the cost of your half day in court from lost wages.
After little Johnny or Suzy has ridden the sweet ride for only 28 days the handle bars break. You take them back to the store, because the bicycle is still under warranty for two more days of which they give you a new set of handle bars.
Eighteen days later one of the peddles breaks off. The price of the new peddle is was only $14.79 including tax. A few weeks later the crank bearingd go out. At a cost of $27.99 and another hour and half of cussing they are replaced and within about six weeks you have to purchase a new rear tire and wheel. At which point you toss in the towel and you go shopping again.
Back to the store you go. You purchase bicycle B, which little Johnny or Suzy can ride home without having to load it into to your not so new Kia.
Little Johnny or Suzy and four little brothers and or sisters all rode Bicycle B until they gave it up for their own Kia, of which you had to replace the tires a total of one time at a cost of $23.79. The total cost of Bicycle B is $244.92 plus tax.
The total cost bicycle A was a whopping $653.76, not counting the half day off court, for a total of about 4 months of wear and tear.
Now that is what my wife would call, it only costs a little bit more to go first class and it is the difference between cost and price. The difference in this case, being $56 and change for price and $408.84 difference in cost.
So when you out shopping for anything, consider what the difference in cost vs price may be. It just may be cheaper to opt for the slightly more expensive purchase and go first class.
Do not allow yourself to be scammed by empty promises of grandeur. Do not settle for the cheapest bid. There is a reason cheap does not last and why cheap is not inexpensive. You Dear Reader will be writing the final chapter to this little saga.
I am a participant in the 100 Comments efforts. I hope you find this post useful and worthy of passing on.
Justin Case
Tags: cost vs price
Hi Justin,
It is the “hidden cost” or “non obvious cost” like what you said that people tends to miss both on the buying and selling side.
Your post reminded me about a conversation I had in my company this morning. A colleague was discussing the case of a Top Sales in the company who made a lost in one of her sales account because she did not consider the extra cost incurred from the added customization work and items for one of her client order. These are the cost that still can be seen and found on paper.
That same Top Sales is also Hogging about 80% of the resources from the various supporting department and staff to satisfied her “low profit margin” client and orders. And had directly and indirectly delayed and affect other sales person higher quantity and profit margin orders. Not to mentioned her ‘way higher” than average salary as compared to other sales person.
We jokingly came to the conclusion that that Tops Sales is an HIGH VALUE ASSET for the company, while the rest of the sales team are Cost Effective Asset.
I think I will have sleeping problem if I am the boss, if I think of all the Potential Low Maintenance, Profitable business and client I am loosing all these while.
Thank you for your thought provoking post that inspired my comment here.
Cheers
Jason Ser
Thank you very much for your comment Jason. I know how easy it is to lose sight of the cost of something. How many folks every day sell something on eBay for 4 bucks, then spend 9 to mail and this does not include the drive to the PO and the box and time to box it up and they think they made a profit because they bought it for 2 bucks.
How long until they go broke? How long will they be able to subsidize their new business venture from their day job? The job they want to trade in for the new eBay business.
God Speed,
Justin
Hi Justin, thanks for this eye opener post. One must be wise when choosing a cheaper item. If it is only a bit more than the cheaper one, at least you can know that your problems may be few. Terry Conti
Terry Conti recently posted..Sell your ebook on its own or put it on Clickbank What do you think
Thank you Terry,
There are so many things of the what looks like the same vintage, but the hidden aspect of them from the manufacture often becomes very obvious in a short time when put to use. Not all things are created equal even if they look equal standing side by side. Thanks for the comment. Justin
Hi Justin, very good post. I love the quote by John Rushkin that says: “When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought is incapable of doing the thing it was bought to do.”
Enjoy the journey.
Mandy
Mandy Allen recently posted..How do you relax
Thank you Mandy. I like that also. All too often I fall victim to my own thinking though. I do tend to try to “get by” rather than go first class and save a buck or three. Thanks for stopping by.
Justin
Hi Justin,
An excellent way of describing “caveat emptor” or buyer beware!
BTW I bought that first bicycle in a box as well – and lived to regret it
)
Part of the learning curve.
Enjoy the 100 comments.
Regards,
Dave
Dave Whittle recently posted..Resale Rights Products Explained
Thanks Dave,
I did not buy the bicycle but I have bought a thing or three in other instances which proved just as flawed. Some of us live and learn. I am not sure I do such a good job of it, yet.
Justin
Hi Justin,
I am sure I have bought that bike more than once:-(
Some of us just don’t get it….
Maybe it is the economic time…
we try to save a dollar and it costs us two.
Great post…
Good to meet you here on the challenge.
Cheers
Bryan
Bryan, Haven’t we all. Life is for experience and it is willing to teach the lesson for as long as we need to learn it. I wonder if we ever get out of learning some things, ever.
Justin
LOL…You put a smile on my face. If only we could remember that cheapest is not always best, I think we could save a lot of time, money and frustration. Having a sense humor doesn’t hurt anything, either.
Fran T
Fran T recently posted..Betalains to the rescue!
Hi Fran, I am glad it made you smile. I had hoped it would be humorous well as educational. Thanks for commenting.
Justin
That was a good story Justin,
I always think that “You get what you pay for”. If you pay a cheap price, you get a cheap product. I think Oscar Wilde said “he knows the price of everything and the value of nothing”.
Good luck with the 100 comment challenge Justin.
John
John McNally recently posted..TOP 10 TRAFFIC Blogs
John, Sometimes you pay for it more than once. Thanks for commenting. Justin
Hi Justin, great little story to emphasis your point.
Personaly i have a little saying “Buy it cheap = buy it twice”.
If the seller does sell you an item that doesn’t do the job as it should mention trading standards to them.
I bought my wheelchair for just over £1600 and just over a year later part of the backrest catch broke. I went back to the seller and asked them to replace it, “sure, no problem” they said, “it’ll be £50 for the part and we won’t charge for labour”. I pointed out that the chair was just over 1 year old and told them if they tried to charge me for the part i would go to trading standards and tell them the wheelchair is not fit for purpose as i’m in it for life and it broke after just 12 months.
The part was replaced immediately and every time i go there now i’m treated like royalty, and have only been charged for wear and tear items since.
Best of luck for the challenge Justin.
Barry
Barry@The Newbies Guide recently posted..Bloggers- Need A Little Lift
Thanks for Barry. Sometimes I think I buy it three or four times. Slow to learn now and then. Thanks coming by.
Justin
Hi Justin
I’ve bought that bike a few times in the past. These days I spend a little more and get the one that’s going to do the job and will last too.
Welcome to the challenge it’s good to have you on board.
I hope you enjoy the blog hopping
Cheers
Steve
It is a lesson I forget all too often I am afraid. Nice to have you. Justin
Hey Justin, This post was just about me, I am also a cheap skate and proud of it! Maybe not totally I still look for good quality at the best price. I had good laugh at your story thats something I would probably do. I have had my fair share of diasters over the years.
If we look at internet marketing there are so many Guru’s promising everything under the sun but delivering very little.
Your post highlights perfectly buyer beware.
Stan Young recently posted..Gratitude is the key that unlocks the door to abundance
Thank you Stan.
You too kind. I mean empathizing with this poor sap. I guess life is ready, willing and able to teach as long as we are here to learn. Some of us never learn. MMMMMMMMMM I wonder if I am one of those.
Stay frosty my friend.
Justin
Hi Justin
Great story and all to common unfortunately, I always start at the bottom and work my way up to something that works. Really should start to look and do research before me and my wallet jump for joy at the bargain to be had.
igor Griffiths recently posted..Hitting My Marketing Objectives
Hi Justin,
Never heard that before, but it has a bit of truth in it. I myself usually go for the most least expensive item first without concidering the cost. I’ll remeber this the next time I go to make a purchace.
Thanks,
Steve
Steve Troutman recently posted..BoilerMaker 15K Roadrace July 11- 2010
Hey Justin,
Good post. I really like the analogy you made to buying a bike. But you’re totally right about the need to compare the price of something to the actual cost of it, and its actual value.
Good post.
Peace,
Darren L Carter
Darren L Carter recently posted..Free Atomic Bomb Survivor Inspiration Book – Finished!!
Thanks for this post. You are very right, sometimes the little difference in price in the begining will make a very big difference in the end. If you go cheap, you have to check first very carefully what are you giving up for the item being cheap.
Deb@Futures Trade recently posted..Small Profit
Thanks Deb, Darren, Steve, Igor,
I appreciate your comments and your stopping on by. It has been fun, this 100 blog marathon and I am learning a lot from a lot of folks. If I have not bee around, yet, I will be soon. I plant to hit them all before months end.
I am sure most of us can use a reminder now and again about who we buy. It is generally OK to go with a name brand that is on sale and for the same price as cheap no name is for full sale. But even then there are no guarantees.
Like buying tires. I just learned tires have a shelf life and can be big trouble when they get so old. And most dealers know this and still sell them to the unwary public.
And all the counterfit brands going around now. Sheeesh when does a body know he is getting the Real McCoy for a great price any more?
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
I really enjoyed reading that Justin. Very entertaining! A great story and so true. But it’s really a matter of luck. I have bought cheap things that have lasted and lasted. It’s a modern thing I think.
They don’t make things like they used to in this day of disposables. When something breaks our children (now grown ups) throw it away and buy a new one rather than repair it.
Sandy
SandyHalliday@Making Money On The Internet recently posted..Failure Is Not An Option In Making Money Online
Hi Sandy, I do agree, things are not like they use to be. We are a throw away society now, but I believe we still get what we pay for. Some things just plain last and last. I don’t know about others, but my time is worth something. I don’t like to take things back for an exchange.
There a number of “cheap” places to get things from slave labor countries, and you need to replace them every thirty day. Sometimes before you actually use it for one complete cycle. About all we are doing then is keeping some surf in labor for 25 cents for the day.
Labor is outrageous in this country, in most instances. It is just plain cheaper to get new rather opt for a repair. Unfortunately maybe for automobiles we do not usually have that option.
thanks for stopping by.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hello Justin,
I totall agree with Jason about the hidden cost.
You have no ideas how many “cheap” stuff I have bought before. And this is not including the product but even the poor service I’ve spent. Now that I spent too much on the useless cheap stuff, I started to realise the importance of product selection. And I always tell my customer, “you get what you pay”, I hope they also know how to choose the suitable product they need.
Thanks for sharing, it is a great post.
Connie Chen
I think it is a sign of the times Connie. The work ethic in this country is pretty much a thing of yesteryear. Children are not trained up to take pride in what they do, but to only get by, if even that.
I have found if someone offers good customer service he will fair very well, because there is no competition out there.
Thanks for your comment.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justin
Good old “buyer beware”, I agree!
Sometimes its not always the upfront cost which is important, but the long term implications as well.
Good luck with the “100″
Regards
Mike
Mike Calmot recently posted..Blog Comments Challenge- Using the “Power of Six”…to drive traffic!
Mike,
Every now and then I think about an over head chain hoist. One is made in China and is 250 dollars and one is made in Wisconsin and is $300. One actually looks and feels to be a thing of quality and one looks nice nice and shiny and feels rather cheap. Which one of them do want to have holding an 800 pound engine over your head day after day, year after year.
I can tell you, for a few bucks, I do not want to put my life in the hands of piece of equipment that could fail at any moment, from the time it is out of the box until it is finally scrapped for something if quality. It may work for a backyard mechanic but never for a pro.
Thanks for your comment. I agree with you totally.
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justine,
Wise words to pay attention to…
Truly we get “what we pay for”…
If something seems to cheap you better start digging and see what’s left off.
A great story and one that most of us would do well to heed. The cost can many times out weight the price…particularly when you consider someone’s times
Kathy
Kathy Dobson@Outsourcing to the Philippines recently posted..HiveDesk…Track Your Outsourced Workers Time
I agree Kathy.
I think of a place that sells tools of every sort and description for pennies on the dollar but their entire stock comes from Taiwan or some where similar, but they for the most part do last as long at it takes to carry them home. How much is the time worth to keep packing them back for another piece of junk?
Thanks for stopping by and commenting.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justin
Great post but I’m going to be a bit controversial here and say that although “you get what you pay for” was probably true once upon a time, I don’t think it is these days. It seems to me that many things are just not made to last now, no matter what you pay for them.
And with designer labels I think you are often paying extra for the name rather than the quality.
Although it’s not always the case, I think much of the time it’s just the luck of the draw.
Good luck with the Challenge.
Kind Regards
Lynn
Ah Lynn, Designer labels. I agree, there is a thing called common sense and pride or maybe even stupid or more bucks than sense just reap the raves of the peers. Those fools and their money will soon be parted and if they continue through life doing that on their own dime will be broke shortly, if not sooner.
Thanks for the comment.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justin,
You are so right. You have to consider how valuable your purchase is and how the item will fit into your lifestyle. Are you making the purchase because you want it or NEED IT!
What is the item going to cost you per month and how long will it last. If it cost you $120 and last for 12 months its value is $10 per month. If the cheaper version cost you $60 but lasted for 6 months it is also going to cost you $10 per month but you will have too upgrade every 6 months.
Look at the bigger picture.
Cheers
Craig
Craig recently posted..Put Your Email Marketing On Auto Pilot By Using An Auto responder
That may be true, but sometimes there same ration may be a better service for the more expensive even if it dies out in that ratio. I’ll opt for the better service.
Example. You buy a stereo for 100 bucks or 50 bucks. The 100 dollar one has sound that is actually enjoyable and there is no speaker buzz found in the 50 dollar job. Do you still want to buy two of the 50 dollar ones? I rather doubt it. Now you have invested $50 more than you would have.
Thanks for the comment.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justin
Just goes to show that buying cheap doesn’t always pay in the long run but it doesn’t stop us from wanting anything cheaper.
Nice to meet you and good luck with the challenge
Dawn Kay
Dawn Kay recently posted..Free Internet Marketing Blueprints and Checklist Guides
Ha Dawn, I am the king of looking for the cheap, LOL. I get into trouble for it more often than not. I guess I am the incurable romantic and keep hoping there is a for real good deal out there at an unbelievable price.
One thing I do not do is by from China. I do hang out for true name brand purchases in hand tools and electronics. Clothes, well I cannot get hurt too badly on that end.
Thanks for your comment.
Justin
Justin Case recently posted..Cost Vs Price – Is There A Difference
Hi Justin,
I have always had a saying “buy crap, buy twice” and have always tended to go for the costlier option, sometimes when it wasn’t even neccesary.
The only time when it makes sense to go for a lower price is when you KNOW that a top product is available as a stores own brand. It’s having this information that’s the secret.
Regards,
Bill
Bill Murney recently posted..Research- Research- Research
Hi Bill,
Sounds like you learned early on how to save a buck. Good on ya. Thanks for stopping on by.
Justin
Hi Justin
I have to agree with you that the cheapest option doesn’t always offer the best value in the long run.
Thanks for your helpful advice!
Stuart Turnbull recently posted..We need your ‘make money online’ ideas!
Stuart,
There is cheap and then there is CHEAP and then there is CHEEP. Hopefully we learn the difference
.
Thanks for stopping by.
Justin
Great post Justin
Its very important to factor in the cost of your time when you are comparing prices. If something is more expensive but is done for me, that is very valuable to me in my internet marketing online business.
I’ve posted a link to this page on identi.ca for you (makes a change from Twitter!)
Martyn Boaden recently posted..What Was Your Biggest Challenge When You Started Your Internet Marketing Online Business
Thanks for the link Martyn.
Glad you could stop on by and found the rant worth while.
I think I’ll do a link page for those who stop by when I get a breather.
Justin
HI Justin, a grueling saga and well received lesson it is you’ve shared here. I can empathize on so many levels with you’re amazing experience. Sometimes our decisions are easy and other times they’re fraught with entanglements beyond our control. Good luck ahead Justin, Steve D.
Steve@bookmarking recently posted..Bookmarking URLS Favicon Style
Hi Steve,
Well, it is those difficult decisions that make us what we are. We need those growing experiences or life would not be much fun would it.
Thanks for stopping by.
justin
Hi Justin,
Great post a real eye opener, it just goes to show that we should always shop and compare and maybe spend that extra buck or two and don’t forget you get what you pay for.
Thanks Justin
Mike Fleming
Hi Justin,
I always look for a combination of price versus quality. Yes I do look for a cheap price, however I also look for the value of the price as well, therefore sometimes I do buy the more expensive item accordingly.
There I certain things I know I don’t have to pay top dollar for as it will taste the same such as milk, bread, sugar etc. I love shopping homebrand in the supermarket. Most of the stuff tastes better than the brand food.
Re clothes, I always look at how things are made, not where.
I do believe in ‘We get what we pay for’ and I also now believe that everything nowadays is made to break after its warranty has ended!
This happened to us recently, we bought a TV, got the warranty and within a month of the warranty running out the TV died! That would be right! So we fished the good old faithful tv out of the shed and put that back up! So much for new!
Hope you are going well with the challenge. I have finally started my rounds checking on how people are going and making my comments as well. I am taking a table as I go around to check on who has commented and who hasn’t yet. Remember to check your spam box, as some people have ended up there for some reason, such as poor Randy.
All I can hope for now is that everyone eventually gets around to everyone’s blogs in time!
See you back here soon!
Cheers
Jacinta
Jacinta Dean recently posted..The 100 Blog Comment Challenge Update!
Hi Jacinta,
Thanks for the long note. I know if you spend that much time on each blog you are going to burn a wee bit of midnight oil before you through.
Thank you for this opportunity and for the kinds words. God Bless.
Justin
Great post. This reminds me of the saying you get what you pay for.
Amy Steelman-Prueter recently posted..Are you up for the Challenge
Hi Justin,
I’m going to get my husband to come read your blog.
I’m always preaching quality over quantity and he is always running around wasting precious time, energy and money trying to get the best deal or at least the best deal in his mind (LOL).
He could learn a lot from this post.
Enjoy the challenge
Michelle
Hi Justin
How true about first class. Sometimes it is better to pay the extra dollar. Some savvy to tell which is which, but yes, the better item can last longer and work better. Go through 5 phillips bits in a day and remember the one that lasted for months. Sometimes the better item has things on it that you never thought of using, and there it is. Way cool, eh? Relying on many other people’s experience.
Thanks for the post.
Alex
Just I love this post about cost vs price… in the long run it feels like all the low-priced stuff COSTS way more than what we originally thought! I try to balance out cheap and “good quality” to offset those costs LOL But lately, even “good quality” isn’t so good anymore.
Wonderful post, I found you through the 100 comment challenge!!
Gwen
I wince as I read this – we’ve all been there, haven’t we?
Not wishing to confuse, but this is a debate that’s worth expanding and if you throw in the word ‘value’ …
Great post, thanks
John Edler
Author of ‘Sticky Memory’
http://johnedler.com/blog/sticky-memory-have-i-coined-a-new-term-/?/html
Hi Justin,
A few years ago I was working in Sweden, we used to travel home every 6 days. Now I had a friend their who would travel to Denmark every 6 days by car. This friend before leaving would check the internet for the cheapest gas, now he would find the station that was selling the cheapest gas and drive there to fill his tank, nothing wrong with that I hear you say, well that gas station could be at least 80-100 miles out of his way, just to “save” a few cents on a gallon of gas.
He could not understand the difference between cost and price either.
Pete
Pete Carr recently posted..Your Blogging Toolbox Part 1
Hi Justin
Glad to have read this post. More often than not, in my experience, settling down for cheaper options has always costed me more money in the end. I have learned from it and do think of hidden costs – but sometimes I still feel inclined to go the cheaper way but then have to be very strong
Nice to have you in the 100 blog challenge .. refreshing topic and very well presented.
Cheers!
Abizer
Hi Justin,
I think everyone learns during his or her life that buying the cheapest is often not the wisest thing to do. Every cheap item has its hidden cost which makes it in the end not really the cheapest.
Thanks for this enlightening post.
Deb@emini trading recently posted..A Nice Quicky
Hey Justin,
Great post that explains the difference between price versus cost.
I really like your bike analogy. For me owning a boat is another great example. Sure I paid xx amount of dollars for the boat but every winter i have to pay to have the boat dry docked. It seems there is always a problem with the engine that has to get repaired. I finally got rid of the boat because of the cost to keep it running.
Good luck to you!
- Rick
Rick Byrd @ MarketingWithRick.com recently posted..Business Ethics – Is There Such a Thing
Hi Justin,
great post I must admit its something I have been very guilty of in the past, I try to look for the best option these days instead of the cheapest option, I have found to my cost it will cost me more than twice as much.
Cheers
Rob
Rob Corrigan recently posted..What Is The Cheapest Way To Start A Business Part 2
Hi Justin,
Thanks for reminding that cheap isn’t always best.
I am sure we have all learned that lesson the hard way, the main thing is don’t keep repeating it.
Enjoyed the story behind your post and great to meet you on the challenge.
Regards,
Brian
Brian Alcock recently posted..So You Failed…So What!!
Hi Justin,
Very good post and good use of example for defining what exactly is price and what cost is.
When you buy the cheapest product you will always get the “cheapest” product. You know what they say. “You get what you pay for”.
Take care,
Andreas
Andreas Spyrou @ Free Online Marketing Tips recently posted..The Biggest Affiliate Marketing Mistake &8211 Mistake 6
Hi Justin,
Was I supposed to laugh?
Cos I did!
I used to be a cheap skate, but only because funds didn’t allow otherwise at the time.
Now I have more spare cash I cant choose to be a little more, erm choosey lol.
Nicw writing style, kept me engaged the whole way through, which makes a nice change because I have a terrible attention span.
Speak soon, Sally
Sally recently posted..Writing Testimonials Benefit You Too
I agree with you on this one… cheap is not always best. If an item has value and is made well then the price is right. What’s the point in buying a bunch of stuff that is poorly made with a short shelf life just to save a buck. It makes no sense to me too. I find that the things of value last longer and you get more for your money… Of course there are exceptions but we get the drift. Thanks for sharing.
Stopped by on my 11th hour visit for the 100 comment challenge.
Best,
Elizabeth
ElizOF recently posted..Yoga Love- Learn to Add Balance to Your Life…
Hi Justin,
I’ve learn that cost is just the ‘for the moment’. Long-term is what you want to think of in terms of cost and price. While I know that repairs and quality comes into play, can it be something you toss away now, if so, the cost now is not much in risk. But if it’s something that you’re planning to keep for awhile, the price may rise in terms of risk. Thus, you’ve outlined it all with the bicycle concept. Thanks for the great post. See you at the 100th comment!
Thu
Thu Nguyen@BloggingFor recently posted..The Complete Helium Report REVIEW by Bob Younce of The Writing Journey
Wow, that complicates life a whole lot
I am going to try to get stuff free from now on and then I don’t have to worry about cost or price 
Seriously though, it can cost a whole lot more to pay a lower price today. We did that once with printer ink (got the cheaper stuff) and it cost us a lot more than if we had got the genuine product up front. Lesson learned
Michael Pedzotti recently posted..Guess who is guest posting
Justin, hope that was an analagy or notional example rather than a personal experience!! lol
You make a good point, people are often hooked in by an apparent “deal” without considering the actual hidden costs. Classic examples are often buying stuff on Ebay or the home shopping/auction TV channels where people get caught up in the bidding frenzy and by the time you add all the postage etc you have often paid more than you would in a normal shop!!
Useful, thought provoking stuff, cheers
Tom
Tom Harvey @ Tom-Harvey.com recently posted..Video Marketing – Anatomy Of A Successful Affiliate Campaign
Hi Justin
That is a great story to illustrate the difference between cost and price. I have been in a similar situation myself many times. You learn as you go. Sometimes I buy sometimes cheap for a one of use and then I can throw it away. For quality items you have to pay the extra.
I hope you enjoyed the challenge.
Good luck
Eamon
Great post Justin!
You’re right that cost and price get confused quite often. Having spent time in a manufacturing environment, I understand “cost” to be the amount of money that something took to make it, whereas “price” is it’s market value. The two numbers can be linked (as in price = cost plus 50% mark up) or not (as in market value). A “loss leader” is something that is sold below its manufacturing cost as a ploy to get the customer to buy something more expensive eg as an add-on (think low priced white goods and expensive service contracts).
However, in the example you describe it is essential to consider value and worth as well. I always consider how long something will take me to set it up and build the cost of my time into the equation as well. For me buying a bike and getting it assembled by the guys in the bike shop is a total no-brainer! I’ve got twins and the thought of having to build two bikes simultaneously to avoid all out war because one got his significantly sooner that the other, is horrendous! I just about cope with the Lego sets are Christmas!
Great post!
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Hi Justin,
You are absolutely right. Cost and price are not necessarily the same.
I always try to figure out the real cost per unit of something rather than just look at a price.
Vance
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