The Cost of Cheap Products

THE COST OF CHEAP PRODUCTS

This is probably the only topic in which both sides are guilty, which is why, on this occasion, my arguments will have an inevitable natural neutrality.

All this problem is summarized to a very simple question: the basic laws of supply and demand. If a product, whose market success is zero because consumers do not like the value offered by it, it is obvious that the production company will not devote as much resources or effort to optimize its production as it does not make sense to still incur more losses, therefore, the logical thing to do would be to remove the product from the market or improve some characteristic of the product itself rather than in its manufacturing methods.

However, when a product is successful in the market, competing companies will try to replicate the product by offering it at a lower price to attract buyers, since that is exactly what they are looking for, and, in this way, capture more market share and unseat competitors. One of the most effective ways to carry out this strategy is to reduce costs by all means, either by harming workers contracting cheap labor under conditions similar to slavery or by incurring environmental costs in order to reduce production costs.

From the consumers’ perspective, we are also selfish, just like the companies. That is why we also seek to incur the lowest possible costs, in the same way as the companies. In this case, our cost is the price we pay for the product and, being self-interested beings in our own benefit, we also seek to reduce them by buying equivalent products from the competition for a lower price.

Both cases tend to occur with extreme frequency in the presence of distributor brands of convenience products, where consumers spend a minimum time to decide the purchase of the product and usually the engine of their decision is usually the price, in most cases.