How Cheap?
My current computer problems reminded me of a few things I read some time ago. I’m actually quite surprised that I haven’t already written about this, but then again there are a lot of things I never get around to writing about, many of them being on my mind far more than this.
I’m talking about the fact that certain things are becoming too cheap for their own good. Consumers desire cheap goods in order to be able to afford as many as possible and manufacturers desire high profit margins. That means that, in order to be able to make some profit out of selling their products at prices that consumers are willing to pay, manufacturers need to reduce costs as much as possible. Some costs can be reduced without causing problems, and those certainly should be reduced, but most go past that level and the consequences are unpleasant for all involved. On top of the environmental and social problems caused by reducing costs past a certain level, the products in question also lose quality, and this is what this post is about.
Some time ago, I read a post written by a corporate blogger where the author was trying to counter the general idea that products made in China are inherently of poor quality. The main argument was that the Chinese can produce anything that’s required of them and can do it while ensuring one of about ten different quality levels, so the company that chooses to manufacture some of its products in China chooses the desired quality level as well. Then he pointed out the obvious, namely that each quality level comes with a price, the lowest quality being the cheapest and the highest quality being the most expensive. Companies would obviously desire products of the highest quality, but they can’t afford them because they need to keep costs down, otherwise the products ending up being too expensive and consumers no longer buying them. Still, there can be companies that try to stick to certain standards and therefore demand higher quality even if their products are also made in China, so the question is what are the consumers who complain about the quality of those products looking for. If they look for cheap goods, they shouldn’t expect high quality, not even for products that are not made in China. If they look for quality goods, they should expect to find some that meet their criteria even among those made in China.
That’s a very valid point, but the fact remains that the average quality of the goods that hit the market tends to keep dropping. After all, we all know sayings like “they don’t make them like they used to” for a reason… In a way, such a drop in quality (and especially in reliability) can be seen as a strategy the manufacturers employ in order to ensure that people keep buying their goods, as they’ll need to keep replacing those that fail. However, it all changes as soon as you add warranty into the mix, because the manufacturers need to replace the products that fail without the consumers purchasing new ones, meaning that reliability problems create higher costs.
When you buy an item that fails and needs to be repaired or replaced during warranty, the manufacturer spends some money in order to solve your problem. Obviously, they need to earn those money back from somewhere. That can be accomplished by raising prices, which initially hurts consumers and then also ends up hurting the manufacturers when their sales start dropping, by lowering profit margins, which initially hurts the manufacturers but then can also end up hurting consumers when the manufacturers go bankrupt or stop developing new products, or by trying to lower costs even further, which usually ends up hurting everyone because the quality also drops and all the associated problems get even worse.
Either way, it means that people don’t get the products they purchase repaired or replaced for free, but that they pay for these operations in advance when they make their purchase. But, on top of paying for all of this in advance, consumers also lose time, productivity, information or various other things when the products they purchase fail. On the other hand, manufacturers see themselves more or less forced to keep lowering the quality and continue this vicious circle because, while they could perhaps manufacture more reliable products and sell them at similar prices if they wouldn’t need to cover the costs of the repairs and replacements, those costs aren’t going to go away for quite some time due to all the unreliable products that they have already sold. That means that an improvement in quality and reliability usually implies a significant increase in price for quite some time, which tends to drive consumers away from the products in question and toward those that just make this vicious circle even worse, more or less turning an increase in quality and reliability into suicide for the companies that attempt it and making even previously trustworthy brands become less and less so.
The faulty HDD made me remember this issue because it’s quite obvious when you think about computers. The percentage of components that need to be replaced during warranty, or even those that are dead or at least faulty on arrival, seems to keep increasing. I even remember reading several times in WXPNews and the former VistaNews (currently Win7News) that the author and her close friends and family have personally experienced situations where a certain component even had to be replaced three or four times before they received one that at least worked the first time, not to mention that the number of components that fail before the warranty expires seems to keep increasing.
Though I would hope that such situations where repeated replacements are required are still quite rare, I believe that just about everyone’s personal experiences can confirm that things are indeed getting worse and worse. Mine certainly do, at least… So I ask you this: Considering how much cheap products actually end up costing, how cheap is too cheap?
