The Cost of Rock-Bottom Prices

While I was researching the changes over the years in the wholesale price of denim fabric (yes, it is relevant to something), I stumbled across this post by apparel consultant, Stefano Aldighieri. Here’s the part that caught my eye:

  • The quality of apparel has consistently dropped.
  • Disposable fashion is not a savings. Customers spend more buying several cheap items than if they bought better quality, longer-lasting garment.
  • Over-production generates a strain on resources and an increase in waste; about 80 percent of the apparel made ends up in landfills, according to the Environmental Protection Agency.
  • The race to the bottom is not helping anyone. No investment in product development is possible. When the only thing that matters is price, people stop investing and trying to make better things.
  • Whenever we buy something that has a price too good to be true, we know that someone along the supply chain was not paid a living wage. Nobody really wonders how some companies can possibly sell so cheap, and nobody really cares enough to ask the right questions.

The only strategy I can think of that would really change that state of affairs would be a radical change in values. I don’t see that as forthcoming even from those who express so much concern about the environment. It’s not a question of priorities but one of subpriorities.

11 comments… add one
  • bob sykes Link

    Our values also have a genetic component, and it is much larger than we believe. We, like all animals, have a complex set of instincts, which we like to call values.

    You can change genetics if you are willing to impose a very stringent set of selection pressures. Judging from the Russia fox experiment, which domesticated wild foxes, it takes about 20 generations of severe selection to get what you want.

    What did you get in Chicago this weekend? 72 or 73 shot, 13 or 14 killed, included one female cop. You are worried about people buying cheap stuff?

  • You are worried about people buying cheap stuff?

    They are not unrelated. If we were producing more of what we consumed, it would change the equation.

  • Andy Link

    Perhaps in related news, I needed to by new toner for my Canon color laser printer. Going with Canon OEM toner cartridges would be $251 on Amazon. Going with a third-party brand with 1000+ 4 and 5 star reviews is $48.

    Do I think the cheap toner is as good as the OEM canon? No, and some of the reviews suggest the amount of toner is less than what is in OEM cartridges Do I think the OEM canon is worth paying 5x the price? Also no.

    Like many things in modern society, the middle is lacking.

  • PD Shaw Link

    My understanding is that clothing has good scrap value; at worst the thread can be reused for alternate purposes. I’ve heard this through one of the local goodwill store managers, which has encouraged me to donate some of my old clothes unfitting for the most in need. No underwear though, no tax break is worth the indignity of the exchange to all involved.

    Anyway, I think a lot of recycling efforts do involve items that end up in the landfill anyway because of lack of demand. I’d like to know if clothing recycling is something that would be useful to encourage, even if it disrupts Dave’s desire for yesterday’s quality.

  • Drew Link

    Are we too intellectually weak to observe the obvious? 90+% of consumers will buy on price, no matter their other stated intentions or preferences? Only luxury goods buyers don’t. They will consider performance, quality, status signaling and so forth. Corporations will respond out of survival instinct.

    If people cannot come to grips with this reality, all related debates are rendered moot.

  • Grey Shambler Link

    For those of us with limited means, buying new confers status.
    Even cheap new.
    Plus, there is the sheer joy of acquisition, the genius of the dollar store.
    Everything in use shows wear, colors fade.
    Lasting quality is not always the best bargain, a home full of outdated, perfectly operating appliances confers an aura of age to the occupant.
    My parent’s 80 year old Kelvinator freezer humming quietly away, lonely, outdated, and perfectly operational is a case in point.
    I doubt they made poor quality appliances in 1940, that required competition, and scientific advances in “just how thin can we make this component and get away with it.” Spray on a shiny coat of paint and turn the page, designing next years updated, must have model.

  • Drew Link

    I think those are interesting comments, Grey, but I wonder.

    For some status is important. For others not.

    Let’s take just one example and juxtaposition. I drive a $130K 911. Is it for status? No. If I wanted status I’d buy a Ferrari, Bugatti or the Turbo version of the 911. The issue is that a straight 911 is a marvel of engineering design and drives accordingly. Its fun. And you can’t do anything remotely legal that would push the Turbo to its design limits, so what’s the purpose in buying that? These cars have not been cheapened in any way. You buy not on price, but on performance and style.

    Now lets juxtapose commodity, staple items. People do buy on price. And they will buy foreign in a heartbeat, no matter their statements otherwise. Sellers understand this and have this quirky desire to stay in business. So they cut costs everywhere they can. It is not axiomatic that poor design or materials is cheaper, but its a general rule. Knowing what drives the consumer’s buying decision, they act accordingly. To avoid this, (that is, to move up in price point and retain product integrity) gets you forced into niches. That’s a change in the basic business model. As another example, think Airstream RV’s vs, say, Jayco.

    Now apply this to just about any product you can imagine. People think businesses call the shots. No, buyers call the shots.

  • steve Link

    How do you deal with the cognitive dissonance of the market is always correct and the market is stupid (will buy on price, no matter their other stated intentions or preferences)?

    OT- Dave- Did they find out which gangs the two cop shooters belong to? Not seeing the follow up stories.

    Steve

  • No word on that yet. There are three gangs active in that neighborhood—their membership in one of them is practically certain.

  • Drew Link

    “How do you deal with the cognitive dissonance of the market is always correct and the market is stupid (will buy on price, no matter their other stated intentions or preferences)?”

    The market is not always “correct.” Correct is subjective, but markets are most assuredly better in almost all cases than wise (snicker) planners. And they retain liberty. You completely missed the point on price buying. Most people say they want to buy American, even if at higher prices, because they want to appear virtuous. But they don’t behave that way. What they really want is low prices at any given level of quality, reliability or any other product attribute. And, further, are often willing to trade off various product attributes. That’s not stupidity, that’s consumer preference.

    But thank you for your feeble attempt.

  • steve Link

    Didnt miss your point. I think you missed the point of the article. If people were actually price conscious they would buy the better product as it ends up costing less. People are just going for new. I guess you could also call that consumer preference, but markets usually involve some kind of price evaluation.

    Steve

    Steve

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