Why are small bussiness willing to pay more for lower quality?
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@dafyre said:
All things being equal if your SMB isn't looking to grow, then buying local in that situation works. But if you are looking to become the next Lowes or Home Depot, your business will always be looking for a better way to do things -- even if that means taking your business from a local joint to some place down in a big city nearby.
"Works" is a grey area here. If the goal of the business is to "exist" rather than to "make maximum profits" then this works. But if the goal of the business is business and to make money, even if it is not to grow in size, then this doesn't really work.
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We have a butcher in our village and I used to buy all my meat from him. It's about a hundred yards from my house. But then a rather good supermarket (Waitrose), opened up a mile away. The problem is the meat from our butcher isn't actually that good, and I prefer the supermarkets, so I've been buying a lot more of my meat from there instead. I always feel really guilty whenever I run into the butcher in the village. The butcher knows I'm buying my meat elsewhere.
I feel bad because he's a decent bloke and I feel bad because supermarkets are taking over the country and we're running out of independent butchers.
On the other hand, his meat isn't that good, so it's not my fault.
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@scottalanmiller Agreed. Why would anyone open a business that is just existing? That sounds like really, really bad planning (if any at all, lol).
If I open a business, I plan to make money with it. I may not become a competitor for HP or Dell, but my goal would be to head in that direction.
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@Carnival-Boy said:
We have a butcher in our village and I used to buy all my meat from him. It's about a hundred yards from my house. But then a rather good supermarket (Waitrose), opened up a mile away. The problem is the meat from our butcher isn't actually that good, and I prefer the supermarkets, so I've been buying a lot more of my meat from there instead. I always feel really guilty whenever I run into the butcher in the village. The butcher knows I'm buying my meat elsewhere.
I feel bad because he's a decent bloke and I feel bad because supermarkets are taking over the country and we're running out of independent butchers.
On the other hand, his meat isn't that good, so it's not my fault.
That's what we found back home. In the "big" village near where I grew up a Walmart moved in, which is awful. Except that it provided us the ability to buy good products at good prices for the first time and it treated its employees legally and with respect. It raised the wages in the region and for the first time low wage earners got healthcare and vacations (the US protects small businesses and does not require them to provide for basic employee needs.) So the quality of life shot up for everyone, shoppers and employees.
Everyone still complains that they aren't local. And I appreciate the value of the local store but if they are using the fact that they are local to not bother doing a good job.... that's the risk. And lots and lots of them abuse it.
Food and retail I think are a bit different (but the effect still applies to some degree) because it's not about business, it is about consumers and price and quality are definitely not the only factors.
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I've tended to get better service from SMBs than big companies, so that's one reason for preferring SMBs to be our partners/vendors. And it can be harder to connect with non-local SMBs, simply because they don't tend to operate or advertise outside of their locality. So that's one of the reasons why a lot of my vendors are local.
I also prefer to deal with people I know, so will often engage with local companies that are owned by or employ friends of mine. That's not because they're in the same golf club, it's because I trust my friends more than strangers and trust is the most important thing. That makes it more likely that they're local, although I'd employ NTG because I'm kinda friends with @scottalanmiller and @Minion-Queen and they're 6000 miles away. So it's not a local for local sake thing, it's just that most of my friends are local.
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@dafyre said:
@scottalanmiller Agreed. Why would anyone open a business that is just existing? That sounds like really, really bad planning (if any at all, lol).
If I open a business, I plan to make money with it. I may not become a competitor for HP or Dell, but my goal would be to head in that direction.
Something that we at NTG found when trying to deal with lots of local businesses was that nearly half (@Minion-Queen and I literally went to every business in our local county that could be found, knocking on doors, walking the streets, etc.) had no interest in making money. One even said "If I have to use a computer to track the finances, I'd rather go out of business", and almost immediately he did (hardware store.) Many were just wives running a tax shelter for their husbands, it was a hobby and had zero hopes of ever making a penny, that wasn't the goal. Some were there to make money, but only just enough to get by.
So while I make a point of "what's the point of business", there truly are lots and lots of "businesses" that exist for purposes other than being a successful business and would not be legally able to operate as a public corporation because they aren't trying to make money.
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@Carnival-Boy said:
I've tended to get better service from SMBs than big companies, so that's one reason for preferring SMBs to be our partners/vendors.
This I agree with, in many cases. Don't avoid companies based on size, generally, or only within reason. But I think that's part of the whole "focus on business factors" argument. Don't seek out SMBs, but don't avoid them either.
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@Carnival-Boy said:
I also prefer to deal with people I know, so will often engage with local companies that are owned by or employ friends of mine. That's not because they're in the same golf club, it's because I trust my friends more than strangers and trust is the most important thing. That makes it more likely that they're local, although I'd employ NTG because I'm kinda friends with @scottalanmiller and @Minion-Queen and they're 6000 miles away. So it's not a local for local sake thing, it's just that most of my friends are local.
We are "local" in the digital sense
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Argh, I hate that I have to constantly switch between these two browsers while working. So confusing.
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@scottalanmiller said:
Many were just wives running a tax shelter for their husbands, it was a hobby and had zero hopes of ever making a penny, that wasn't the goal. Some were there to make money, but only just enough to get by.
Very jealous of this.
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@scottalanmiller said:
This I agree with, in many cases. Don't avoid companies based on size, generally, or only within reason. But I think that's part of the whole "focus on business factors" argument. Don't seek out SMBs, but don't avoid them either.
There are three things I find attractive about SMBs.
- They often don't employ salesmen. So when you initially engage with them you often talk directly to a technical guy (who often owns the company). I don't really get on with salesmen, for whatever reason.
- We are often a big customer of theirs. This gives us leverage. If we're a $100k a year customer, an SMB will often work hard to retain us. But for a big company, we're irrelevant, and often get treated that way.
- They seem to have a lower level of staff turnover. At big companies, I seem to get a new account manager every 6 months, at small companies I have often been dealing with the same people for 10 years.
The exception is buying IT hardware. I buy from big companies because they carry stock and benefit from economies of scale. And a box is a box. It really doesn't matter whether that box is coming from next door or from Scotland, it will still arrive at the same time in my factory.
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@Carnival-Boy said:
We have a butcher in our village and I used to buy all my meat from him. It's about a hundred yards from my house. But then a rather good supermarket (Waitrose), opened up a mile away. The problem is the meat from our butcher isn't actually that good, and I prefer the supermarkets, so I've been buying a lot more of my meat from there instead. I always feel really guilty whenever I run into the butcher in the village. The butcher knows I'm buying my meat elsewhere.
I feel bad because he's a decent bloke and I feel bad because supermarkets are taking over the country and we're running out of independent butchers.
On the other hand, his meat isn't that good, so it's not my fault.
The question is... Did you tell him why you don't shop with him anymore? It's possible that if he drastically increases his quality, even if his prices are higher, he'll have a better, more profitable business.
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@Carnival-Boy said:
I've tended to get better service from SMBs than big companies, so that's one reason for preferring SMBs to be our partners/vendors. And it can be harder to connect with non-local SMBs, simply because they don't tend to operate or advertise outside of their locality. So that's one of the reasons why a lot of my vendors are local.
I also prefer to deal with people I know, so will often engage with local companies that are owned by or employ friends of mine. That's not because they're in the same golf club, it's because I trust my friends more than strangers and trust is the most important thing. That makes it more likely that they're local, although I'd employ NTG because I'm kinda friends with @scottalanmiller and @Minion-Queen and they're 6000 miles away. So it's not a local for local sake thing, it's just that most of my friends are local.
This is kinda funny after my situation yesterday, where my friends, who are both IT types were telling me to waste money keeping an expensive solution simply because it's cost was nothing compared to our gross profit... yeah Keep friends as friends, and trusted information sources as trusted information sources - sure there can be some overlap... but not always.
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@scottalanmiller said:
@Dashrender said:
Not being a video guy - I agree with CB, they look fine to me.
And I agree with everything else CB mentioned.
I'm not a video guy but they look like low budget late 1990s infomercials to me.
This is honestly lower quality then you'd get from good Highschool interns.
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@thecreativeone91 said:
@scottalanmiller said:
@Dashrender said:
Not being a video guy - I agree with CB, they look fine to me.
And I agree with everything else CB mentioned.
I'm not a video guy but they look like low budget late 1990s infomercials to me.
This is honestly lower quality then you'd get from good Highschool interns.
But it works.....
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@IRJ said:
@thecreativeone91 said:
@scottalanmiller said:
@Dashrender said:
Not being a video guy - I agree with CB, they look fine to me.
And I agree with everything else CB mentioned.
I'm not a video guy but they look like low budget late 1990s infomercials to me.
This is honestly lower quality then you'd get from good Highschool interns.
But it works.....
That's the problem with a lot of business things.... "it works" for things that are highly subjective isn't really a qualifier. If the question is "does the video play?" then yes, I believe that it does. If the question is "was this a good decision to use this guy" or "does this drive the intended business" then you have to dig in a lot more and we can't really answer if the final result "worked" or not.
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Darn it, again!
