Daily Archives

One Article

Posted by Lucille Browne on

Inexpensive Is Not Inferior

A transaction is the exchange of currency, goods or services for one of these or more than one these. In old commercial terms, it was always the goods and service being exchanged between market participants. This kind of a transaction wherein no baseline is fixed as a standard for the value of goods and services is called the barter system. It is reasonable to believe in such a system that more the effort in rendering the services or producing the goods being offered, the more is the value being received. Nothing could however be farther from the truth in the modern economy. This is an age of doing business differently. The internet business model is the new assembly line in that saves up the cost of distribution and administrative expenses. A major decrease in the sale price over the recent years can directly be attributed to the way business have been reshaped in the last two decades. 

If you are out on mattress shopping and good bed frames, the lower price tag does not mean an inferior quality of the product. The more efficient companies have been cutting on the administrative costs and making their business models more lean and cost effective. Some companies, for example, have moved completely away from the conventional stores and now sell their products exclusively online. The online market has a direct effect in the form of reduction of rental expenses, fixed overheads, salaries of the sales staff and the utility bills. A part of this cost reduction is transferred to the customers in the form of lower prices of the products. The modern business model is different because a lot of other factors, in addition to the effort put into the production of goods, otherwise known as the direct cost, have to be incorporated into the cost of the product. When the competitors offer the similar products on higher rates, it does not necessarily mean that they have using better raw material in the production process. More often than not, it means that they have been wasting value in the production process and transferring that cost to the customers as well. The classic fallacy of marketing through higher value means that the customer is tricked into buying an overpriced product by implicitly presenting it as higher in quality than the alternative brands.

The classic argument of “the expensive, the better” does not hold water in the age of internet commerce. The mattress manufacturers are no different in this regard. Many a times, higher quality Giselle mattress foam is available on the market at cheaper rates. One must be careful in judging the articles on the sole basis of their price because this analysis does not always provide the most useful result.