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Originally Posted by DMcCunney
Offshoring isn't the problem. Pretty much everything is offshored these days. Everyone wants to reduce costs, so manufacturing moves to where it can be done cheaper.
Merely having devices made offshore doesn't mean poor quality. The Asian manufacturers are perfectly capable of building quality devices. The problem is that quality costs, and people don't want to pay for it.
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No no no, I'm sorry if you (or anyone else) got the impression that this was a protectionist rant because that's not what I meant. Of course everything is offshored these days, it's the only way to stay competitive price-wise (I expect a backlash any minute now but that's a story for another day). Prices still came down in the tech field pretty much across the board as a result of China getting the manufacturing aspect of the business; these same gadgets we as a society have started taking for granted would have cost a mint before offshoring became the rule and not the exception (and might have stayed that way depending on precisely where the offshoring ended up). My dad had a cell phone in the family car (back when cell phones couldn't leave the car) when he was a rep for a long-defunct company in the mid-'80s and costs were sky-high, in the thousands of US$. Even as recently as a few years ago, cell phone carriers wanted hundreds of dollars for a deposit unless you had a credit rating north of 700. Then of course offshoring, economies of scale, blah-de-blah-blah, we all know how the rest goes. Prices came down and that explains the majority of the personal-device market proliferation; we don't have a squillion cell phones in the U.S. because they built more but because they cost the consumer less (at least up-front). As a result of prices coming down, however, demand has come up, and production has ramped up accordingly. Probability dictates that there will be more manufacturing problems as a result but you're right: the public won't tolerate a higher price unless they get what they
perceive to be a better deal. That better deal is usually an order of magnitude more than the increase in price would reflect, which brings me back to my original point: We expect the retailer/manufacturer to be liable for everything today, even if
we do it. If you and I each buy the same hard drive and mine dies right after the warranty runs out, does that mean the retailer/manufacturer is at fault? If that's the case, I see capitalism taking a big hit in courtrooms all over the country. Sure, it's nice when a company takes one for the team and give you a new one, but that's up to the retailer; if you've already gotten what you paid for, you don't get to expect a do-over.
The problem isn't always the product; many times, it's us.
Quote:
Originally Posted by DMcCunney
If your purchase decision is ultimately determined by lowest price, well, you get what you pay for...
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Everyone has a price. If Brand X is slightly more than Brand Y but the difference is in product name only, we'll consider Brand X. If it's twice as high, probably not. Furthermore, it all hinges on what we as individuals perceive as necessity versus discretionary, or as I like to say: Need a car, want a Corvette. Mac desktops are a good example: Somewhere between 10% - 15% of the desktop market thought they were paying for something better, and technically they may have been right, but were they "right" enough to justify a 50% price difference? The hardware is the same, the OS is mostly open-source. You and I can do (and have done) that for not only less than an Apple but less than anything at Wal-Mart. We got more (to us, anyway) but paid less. So no, it should never be
just about price, unless price is the only difference.
Quote:
Originally Posted by DMcCunney
Amazon is customer centric. They're a catalog retailer. In any business, 80% of your incremental revenue comes from doing more business with your existing customers, so it behooves you to keep your customers happy so they'll come back. This is especially critical in retail, where the customer has lots of choices about where to buy.
So no surprise Amazon is doing something like replacing a failing Kindle. It keeps a customer happy, and is good PR for them, as the happy customer is likely to tell his friends about the good service, and maybe some of them who aren't Amazon customers will become one.
For Amazon, this is all enlightened self interest.
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Completely agreed. In addition, like I said they'll most likely get the defective Kindle back, fix it, and sell it as a refurb, which would be something like a 90% profit margin.