Responsible buying

Becoming a Rational and Responsible Buyer
A Guide by GL1TCH3D

It happens all too often when people say "it's his/her money, he can buy whatever he/she wants". While this is true, we can't force that person to do that you say, you'd still like to see them as responsible buyers. Think about the democratic system. Let's assume there are two different parties, party X who has a very logical and sustainable long term plan that in theory should work perfectly. Then you have the PQ as the other party that just goes "Lol lower taxes raise spending and borrowing". That's not a very logical way of doing things because you'll have to eventually raise taxes A LOT more. But this appeals to people who don't know any better because they don't realize that taxes will have to increase a lot more in the future. They think "Oh, well we get more services and taxes are lower!" and they go and vote for the PQ. You can't force them to vote for the more rational or logical party, it's their vote, but their voting for the PQ has a negative impact on you. Purchasing is the same concept. If the majority of people buy inferior products and services, companies will have less incentive to produce higher quality products regardless of price.

The purpose of this text is to ideally persuade you, the reader, to be a rational and responsible buyer when it comes to normal, everyday purchases. But what is a rational buyer? Essentially the rational buyer makes the purchase that benefits him/her the most. The idea of benefit (in economics it's known as utility) is tricky since it's based on preferences which will be discussed later, but in simple terms it's what the word means, how much better off you are buying it. Eating a nicely grilled steak will bring you higher benefit than a McDonalds burger because it will taste better, have more sustenance and nutrients. If the steak and burger were the same price, the rational choice would be the steak, right?

While the steak would be a better choice if they were priced similarly, what if they were priced according to their quality? Here's where the law of diminishing returns comes into play. Diminishing returns says that the more input you put in, the less marginal output you will receive. This applies to purchasing with input being money and output being the benefit of the product you are receiving. Let's say 100 is the max benefit you can ever have from a product (meaning the best product of what you want will give you 100 benefit), the jump from 90 benefit to 100 benefit will likely cost more than the jump from 0 to 90 benefit. Here's another way of looking at it if I didn't make sense. Let's say product A gives you 50 benefit for $50, product B gives you 85 benefit for $500 and product C gives you 100 benefit for $5000. For product A, you get 1 point of benefit per dollar. For product B, that falls to a measly 0.17 benefit points per dollar and finally to 0.02 points per dollar on product C. This is diminishing returns, you get less and less back per dollar spent, but you do get more back. It's important for a buyer to decide the ideal point to stop spending money and accept the benefit that he or she currently has. For some people it will be product A, others B and for the rest, C.
Another topic I would like to discuss is the idea of post-purchase rationalization. This is the phenomena where people rationalize their terrible purchase in order to make themselves feel better. A good example would be using watches. All your friends are watch enthusiasts, they have $20,000 worth of watches. They convince you to get yourself a nice Breitling watch for $5,000. Now you're not much of an enthusiast but they really convince you that it's worth the $5,000. You buy it and a week later you realize that you don't care much for expensive watches, you're fine with a $30 digital watch. Now you just blew $5,000 on a watch and you're feeling down. This is where post-purchase rationalization comes into play. Your mind will rationalize the purchase so that you feel good about it. You might come up with things like "Oh, well since it's an automatic movement I won't need to replace the batteries and since it's a good brand it probably won't break. It also looks a bit classier so it was worth it". Now the problem is when this happens with inferior products. Let's say there's brand ScumBag that charges $400 for a bag made out of garbage bags. Some poor lady buys it, realizes it was a huge mistake but rationalizes the purchase to make herself feel better. Next, she wants to further push that rationalization so she goes online and posts great reviews of this bag from ScumBag so that other people see how "good" this bag is because if other people buy it then it can't be that bad right? For the sake of others, try not to fall into post-purchase rationalization. It happens to everyone, it's happened to me but avoid listening to these types of reviews and avoid posting them.

Now, being a rational buyer takes work. It means learning about a product before you buy it and this can seem like a waste but if everyone was a more discerning buyer, the quality of products would definitely improve with decreasing prices.

I talked before about benefit which is based off preferences. Here I will define preferences quickly and how to identify preferences within yourself so that you can make good purchasing choices. What are preferences? Based from the root prefer, preferences are for a person or group a quality. This could be preferring to have a console over a computer or a hybrid car over an SUV. Now identifying them seems like a simple task, and it is, but mixing them with your budget and diminishing returns is another story. First, consider what you want from the product. If it's a mouse you obviously want it to work. Attach a price to that. For a basic mouse that just works, two buttons and roller ball, I would pay... $10? Then what about for a laser or optical mouse, and you keep going like that covering all your wants. Maybe you want something made in your own country, how much more would you pay for a similar product made domestically? And you continue like that. Diminishing returns comes up a lot the more wants you have for a product. Make sure to identify how much you're willing to pay for something with X features or qualities.

Searching for products that fit your wants can be difficult. There are so many sources of information and reviews whether it be on consumer purchasing websites (bestbuy.com, amazon.com, etc), forums, blogs and celebrity/professionals in the field from sponsoring. How do you decide what to listen to? Most of the random consumers posting reviews are just like you. Though they bought a product without any knowledge or very little knowledge on it. Now they're posting reviews. Do they have any point of comparison? Not really. If they do it's very limited. I end up avoiding reviews on sites like BestBuy and Amazon because I never see any intelligent reviews on sites like that. Most of the time it's something along the lines of "Yea, I bought this and it works well". Well compared to what? Next you have sponsored celebrities / professionals using a product as well as the company themselves talking about how good their product is. I'm fairly certain most people reading this know how bad Internet Explorer is, well, Microsoft still thinks it's the shit. That IE is the best browser possible. Should you believe that? Most readers will know that's a plain lie or misconception. Why should you believe any other manufacturer/company when they say their product is the best? People sponsored to use a product will have less wants. Let's take Razer as an example, they sponsor lots of pro gaming teams and give them gear to use. If the pro gamer's Razer mouse breaks, Razer just hands them a new one. So price and durability are no longer issues to deal with which is not the case for you, the normal consumer. That's where enthusiasts come into play. Enthusiasts are people who really enjoy learning about a specific product or set of products. Most people here know me as an audiophile, that's an audio enthusiast, someone who cares about the sound quality produced by various audio products with a very discerning ear. As a source of information and comparisons, you won't get much better than enthusiasts. They spend hours and hours reading up on products, the technology and materials that go into a new product and all of that. There are enthusiasts for almost any set of products imaginable. The most common ones being car enthusiasts, audio enthusiasts, watch enthusiasts and computer enthusiasts. Though, there are groups dedicated to products like high quality tea and pens (both of which I am also a part of). Finding enthusiast reviews can be a bit difficult sometimes with the mass of information. I search for forums relating to the product in question. When buying my first audiophile headphones I stumbled upon Head-Fi, a forum dedicated to audio discussion. Most of the reviews I read are from Head Fi because the people there have a deeper understanding of the product and have more points of comparison. There's nothing like a normal consumer blatantly stating that X product is the best of its type with no point of comparison. That leads to misinformation and misconceptions. Though this happens around us daily, even here on HF, and it's what marketers want.

The power of marketing is great and should be ignored for the most part. A marketer's job is to get you, the consumer, to want and ultimately buy a product. They go through this in many ways. Beats by Dre headphones took the world by storm. They started with Monster signing Dr. Dre for a contract to have his name on the headphones. They use cheap materials, make them look shiny and attractive, pay celebrities to wear them and putting them in every store. Consumers walk into a store and wow, beats headphones are the most expensive ones there, they must be good because quality = price, right? Wrong.
Next they turn on the TV and they see LeBron or someone else wearing them. If a pro basketball player wears them they must be good right? Wrong. Next they go online and read reviews from people who have only ever tried beats headphones and say they're good so they must be good right? Wrong. Monster played off the popularity like no tomorrow. They spread misinformation and once the trend set in the misinformation spread everywhere to the point where they had 50% of the market share. Any enthusiast will tell you they sound terrible. But just the sheer amount of reviews online from ignorant, irresponsible consumers saying they're good is overwhelming. This brings us the conclusion that popularity does not mean quality. Just because a bunch of your friends by a product it doesn't mean it's the right product for you, be careful of peer pressure!

Another common way for marketers to promote technological products is with gimmicks. It happens all around. In the audio world we have gimmicks like virtual surround sound on headsets, high end audiophile cables that supposedly make the sound better and these are just a few things. With phones you might have something like infrared transmitters.
Marketers will always look for gimmicks to put in a product to make them seem better but in the end they function the same and just end up costing more without any benefit to quality or utility.

I'll update more marketing techniques here later.

In conclusion I hope I've convinced you to be a responsible buyer. That means reading about a product before making a purchase to make sure you're getting what you want from it at a reasonable price. That also means being cautious of the information you receive regarding a product and avoiding spreading of misinformation due to post-purchase rationalization. I hope you'll start looking at advertisement techniques with more skepticism.

Thanks for reading, GL1TCH3D