Our lifestyles depend on the inflation rate. Inflation is an indicator that reveals the true value of our money. When the inflation rate increases, the value of our money decreases. Why? Increased inflation results in price increases. The more prices rise, the less we can buy for the same amount of money.
The inflation rate is officially calculated, controlled and published. However, there is another type of inflation – when the price stays the same, but product quality decreases. This type of ‘hidden’ inflation has a negative impact as it causes us to dig into our pockets more often to repair or replace poor quality items. We get what we pay for, right? Therefore, if we can afford it, we are willing to spend that much ‘extra’ for a good brand. Some large companies have come up with a way to save money by moving their production to low-cost countries.
Unfortunately, this strategy is not always successful. Billion-dollar companies, often well-known and trusted brands, increase their profit margins by outsourcing production to cheaper manufacturers in low-cost countries resulting in low-quality products. By paying for such brands, consumers enter a “high inflation world”, where they pay more for less. As a matter of fact, this means that consumers become poorer by constantly replacing the poor quality product they purchase over and over again. One way of avoiding paying more money for poor quality products is to support start-up and ramp-up companies.
What are Start-Ups and Ramp-Ups?
Start-ups are started by an individual or individuals who want to create a repeatable or scalable business model. Start-ups are launched to fulfill a need in a market. Ramp-ups refers to companies that drastically increase their production output to meet the demands of a specific market. For example, a ramp-up company manufacturing women’s clothing may research their market and learn that inferior quality T-shirts are being sold resulting in unhappy customers. The ramp-up company can then choose to increase or ramp-up its output of T-shirts.
So, Start-up and ramp-up companies thrive in conditions that are more challenging compared to high-end brands. They have to keep a competitive price and ensure they manufacture products of the highest quality to gain their market share and win over customers.
How can Start-Ups and Developing Companies Manufacture High-Quality Products and Help You Save Money?
They would have to improve existing processes, create new technologies, innovate and invent. In this way, start-ups and ramp-up companies create good quality products of real value and sell them at reasonable prices.
Hence, when customers buy products manufactured by new or developing companies, they enter into a “low inflation world” where they pay less money for better quality products.
What does this mean for customers? It means that novel and developing companies help customers save money by selling products that last longer. Customers do not have to replace products as often. Based on market trends, it is clear that start-ups and ramp-ups offer customers the best value for money products. If you are willing to see past a popular brand name, you will save yourself from the expense of replacing poor quality products.
Do not pay more for brands; buy products from start-ups and ramp-up companies because the start-ups will make you rich. Based on the inflation impact, brands make us poor, while start-ups and ramp-ups make us rich.
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Павел
February 15, 2019
Толя, финал статьи – !!!
Anatoly
April 11, 2019
Many thanks, Pavel.
Michael Nikiforuk
March 28, 2019
I found this article most insightful – It never fails to amaze me how people buy “the Brand” as much for pure status as anything else. Sacrificing their purchasing power for “a label” something that can demonstrate the purchasers perceived or desired status. How many times have I seen somebody drive by in a low-value sedan with a stolen Mercedes emblem glued to the hood or trunk – that’s just ridiculous!!! That example is probably a bit off topic – but nevertheless – it comes to mind when I think of the points being illustrated here.
The wise person will look for the start-up that is competing to carve out market share – working so much harder and diligently to build that reputation and earn people’s trust – going that “extra mile” and delivering extra quality.
Human behavior is very interesting – the marketing / advertising companies (service providers) have built their business on studying these human dynamics and sell this knowledge to the (Brand) manufacturers to consolidate market share. Start Ups lack the financial capacity to “play” this game – and compete thru product innovation and quality offerings.
Anatoly
April 11, 2019
Michael,
We appreciate your excellent analysis of the post. Great. You pointed on the statements we proposed to discuss.
Thank you,
Anatoly
Yair
June 13, 2020
Consumer should demand and expect higher quality and longer lasting products from brand and well established companies as well.