Everybody likes to get a great price on goods and services. When we do, we occasional use the phrase, "it was a steal." And when the price is a steal, we should wonder a bit on the victim was. Over at Naked Conversations, I've been shooting darts at two companies known as low-price leaders--Wal-Mart and Dell.
I got a comment from Daneca Vail, telling me that people who do not like Wal-Mart "suck. Wal-Mart is the right place to go shopping when you do not have a lot of money." And she most certainly has a point. Wal-Mart and Dell gained their positions by offering the right goods at the right price. But to accomplish that Dell is now accused of providing shoddy service in support of increasingly shoddy products. Wal-Mart is accused of screwing their own employees and the communities where they have bullied their way in at the expense of local merchants and aesthetic charm.
I won't even go into the issue of the working conditions of people who make some of these products. I have no first-hand knowledge and I can only speculate as to what overseas manufacturing facilities look like.
Yet other companies seem to be able to make shoppers happy without squeezing profits from their own infrastructures and the costs of goods sold. Costco, has great prices and over 100,000 employees who have full health and labor benefits and you feel their job satisfaction when you shop the warehouses, and they continue to ignore Wall Street complaints that they are too generous to employees. Honda, Toyota, GM (Saturn) and Ford (Taurus) make reliable products that are affordable if not downright inexpensive. Target has a shopper fan blog and an amazingly stable workforce for a retail chain.
My point is this: There is a point where low prices erode from values to cheap. And when we buy cheap, we are often paying for abuses in the supply chain, in quality control and in having courteous, qualified employees. In the short run, we get our "steals." In the long run, I hope it proves to be bad business for companies like Dell, Wal-Mart and a list that is all too lengthy.
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