Are You Price Desensitized?

I think Americans are price desensitized. I hear people say “it’s only $10…” Obviously it depends on what your talking about, but many items are overpriced. I really try not to use the phrase “it only costs…” for anything.

You still need to weigh what something costs to a couple of factors: value and your time spent earning the money. Ask yourself the following questions before you buy something:

  1. Is it good value? In other words does it add true value to your life? Or are you buying something because you are bored or trying to impress someone?

  2. How many hours did you need to work to earn the money you are spending? If you had to work 10 hours to buy that shiny object calling to you at the mall, was that worth it? Maybe or maybe not.

A few years ago my wife and I flirted with the idea of starting an online business. One where we would basically buy a product from China in bulk and resell online, you know the American way. What surprised us was how low the per unit cost to produce many things was. That cookware you just paid $50 for probably cost $1 to produce. The $100 jacket probably cost $3, that bowl or cup you paid $10 for probably was a couple cents to produce. Items that people would pay $5 or $10 would routinely cost 5 cents each to make! I understand one has to factor in shipping, marketing, overhead, etc., but this still seems like an incredibly high mark up. And it happens to us on everything. So keep in mind the basics when shopping. Try to utilize thrift stores as much as possible as well as garage sales. Try and think in terms of value and how many hours it takes you to earn something. And do not forget to take care of what you own so it’s useful life is long.

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