Value Of Products

I don’t know if this has ever been written or theorized about. Perhaps it’s basic economics 101. However, I don’t think most people see a relationship that I’ve noticed for years.

There is an inverse relationship between the value of a product transaction how much effort is put into it’s sale.

Am I saying all advertising is an indication that a product is not a good deal? Not at all, however, I am saying an excessive amount of advertising of a product might be an indication that the cost of the product is much more than it’s value.

An extreme example would be a timeshare. Your not going to find any financial counselors who will recommend a time share as a purchase with high value. Most people who own them are sorry they every purchased. A critical look at the cost of “maintenance” fees would show for the amount of these fees you could probably buy a similar vacation each year anyway. If you look to buy a time share from an individual, you find they sell for about 10% of the original price down to free. People are anxious to get rid of them. How are they sold? GREAT effort where you are one on one with a high pressure sales person for hours. This is an example of a product with minimal value, maximum price and maximum effort required to sell.

A pencil is another mater. You walk into the store, nobody is going to twist your arm, urge you purchase, tell you 50 reasons why the pencil will make your life whole, health, improve your personal life. Nobody cares. You’ll never see a pencil commercial. You buy it or you don’t.

Think of popular TV products. It’s occasional fun to watch the info-commercials for me as I enjoy watching the salesman work. I like listening for the hot buttons, how he makes you want the product. I recently watched a commercial on the Ninja Blender. Hey, I would like to have that, or should I say, I’d like to have what I saw in the infomercial, the enjoyment and fun of the smoothies and ice drinks. If you buy this blender, the promise is you can have the healthy food, the pleasure and enjoyment of quick and each healthful food. What could be wrong with that? Notice however, the infomercials are 10 minute to 60 minute long sales pitches. Those infomercials don’t come cheap. When you buy that product, your paying for the commercial, the harder a product is pushed or advertised, the more of a gap must be between the cost of manufacture and the retail price of the product. For this statement not to be true would assume the company selling the product is doing it for a loss. In other words it assumes there is no profit motive and without a profit motive, nobody does anything. Look at the impoverished history of Russia where socialism demanded that very little of what a worker did was for his own benefit, nearly all of his effort was taken away to give to others. People set their tools aside and did as little as possible. Shortages of everything ensue. What proposes to have a “classless society” value ends up with a great devide between the rulling class and the poverty stricken working class. Ok, I’ve gotton off topic….

I will occasionally look one of the products up on Google. In this case, the blender is sold for about 3/4 the price (about $150) from retailers and mail order suppliers. If you respond to the infomercial, the price is about $200. So immediately we see the infomercial, (big sales effort) has a higher immeadiate price. We must also understand that because of many people that view the infomercial and are sold the idea the product is worth $200, the price does not need to be alot lower than that to sell in the store. It’s perceived value is $200 but hey, Joe’s Appliances has it for $159. It’s a great deal! We’ll, maybe, maybe not. Without the Infomercial, it might sell for about what most blenders do, $40-$100. I don’t know for sure, but it seems obvious to me.

We’ve all heard of supply and demand economics. Just remember that producers and sellers of products to some degree and for a short period of time are able to play with the supply and demand equation. Remember the oil embargo? Oil was held back from the USA in order to drive up prices. Supply was altered for a period of time. Altering demand is not hard, you can create demand if you have enough expected profit in the product to advertise it strongly. Temporarily the demand will be higher. Remember Ginsu knives and Ron Popeil’s Pocket Fisherman? These are products past their advertising driven temporary demand period.

The value of a product has an inverse relationship to the effort put into selling it.

Happy Shopping!


Tuning Static Out of Modern Communication

 Thomas Nast's most famous drawing, "Merry Old Santa Claus",
Thomas Nast’s most famous drawing, “Merry Old Santa Claus”,
I received an email forward recently from a familiar and friendly source. It really took the cake. It claimed that Snopes (a well known site for investigating Internet rumors and chain email claims) was a left wing Democratic/Communist group funded by George Soros. While it’s true that George Soros is a left wing commie, the linkage to Snopes was just another fabrication used to trick somebody into forwarding “Information EVERYONE Must Know!”.

Please avoid participating in forwarding these chain emails. They are part of a greater hobby similar to those that write computer virus programs. It’s all about getting you to forward their viral email fiction all over the Internet so they can see how far and wide (how viral) they can spread a story they wrote. We would all do well to avoid stuffing the Internet and your friends mailboxes with items you’ve not bothered to look up and verify for yourself. Just because somebody you trust sent it to you, does not make it trustworthy. Remember, whoever they are, they once believed in Santa Claus and the Tooth Fairy. They are not evil, just fallible and they have fallen prey to a “Fairy Tale” like belief that everything they see on the Internet is true.

The letter I sent follows:

Every viral chain email that mentions Snopes as a form a credibility or non-credibility is at least 95% certain to be non-credible.

Here is the About-Snopes page:

About Snopes Info Page

The purpose of these outlandish emails is to try to get viral status and see them come back to you from all over the world. It’s part of the virus hobby. They write these to get you to forward them. They are almost all 100% hogwash. It’s not unlike an important part of the HAM Radio hobby, who’s purpose is often to make as many contacts all over the world as possible. Viral Email’ers are creative writers of fiction for sure, yet they contribute only static. It’s not much different from unwanted telephone sales calls.

When I check these forwarded emails, I find only one or two per year that are true. They tug at your heart strings on one level or another so you feel compelled to forward them. If it urges you to forward to all your friends, you won’t hardly ever be wrong if you just assume it’s a fabrication and delete it.


Do your own research at: Snopes
Another great site is: Urban Legends


Seeing To Fly

Peter A. Van Houten, MD
Peter A. Van Houten, MD

Some of you who know me are aware I gave up soda pop because I wanted to avoid all artificial sweeteners and particularly Fructose.  These products have been out of my life for a couple of years now. I may post about the reasons why in the future. At Joe Nal this past week, I met Dr. Peter Van Houton who is an avid modeler and practices at East Carolina Retina Consultants.  While we spoke the subject of soda came up and he told me of his long study of it’s effects on the retina.   He can see how many soda’s you consume each day by examining the specific type of damage on your retina.  This information is imporant to consider for all those wishing to extend quality of vision as long as possible.  He explained to me that he felt it is the primary driver of diabetic eye problems.  Check out his posting on this subject here: Drink Water Not Sodas.