As I was thinking of hidden costs, low prices and high levels of service I couldn’t help but remember when my wife and I purchased a living room set and a stand for our TV. We were offered the opportunity to save even more money if we purchased a dining room table and six chairs. My wife and I are all about saving money and we could afford the additional purchase, so we agreed. Last step in our purchase was to finalize some details and sign the paperwork. We quickly learned about a delivery charge. Because of the large amount of items purchased it was an easy decision to pay the delivery charge. We were asked if we live in the city limits, and our delivery charge was cheaper and now all we had to do was pick a delivery date. After we determined a date, we were informed the TV stand was not available for delivery on our date but would be available one month later. I asked if the company would make two separate deliveries to our home. Our salesman nicely responded “no” but here are some other options you can chose. Our options were pick up the TV stand ourselves at a separate time, pay another delivery charge for two deliveries, or wait another month and have it all delivered at one time. Who wants to wait even longer for such a big purchase? Despite the amount of money we just spent and my negotiating skills they would not budge and make two deliveries. I was quite disappointed.
Hidden costs also remind me when I worked in the restaurant business. I was what they call in the business, in the back of the house (kitchen), cooking the food. The creativity of some orders was definitely exhaustive and in my opinion a big reason why the markup. When the menu is pretty clear what the ingredients are in the selection, and people stray from the menu and want to add extra ingredients, a markup has to be expected.
Where do I fall on this line of hard costs –internalized versus externalized costs? I consider myself to be pretty handy and don’t mind the extra time required to put something together if I can save money. The extra money needed for an already assembled item depends on the item. I can put together some IKEA items, but I certainly would not remodel my kitchen. I purchased new carpet for my living room. I found an excellent price and brought home the carpet. I had no idea how to install carpet. I called a good friend who owns his own home remodeling company. He explained the process what so hard, he contracted a carpet layer when needed. If I tried it could take me all day, but if I hired a professional it would only take about an hour. It was an easy decision to have the carpet installed professionally. To pay for installation was a no brainer.
I do not offer any services or products professionally, but I do expect a high level of customer service even if the service will cost me extra. Every service provided is going to cost money and the bigger and better the service will without a doubt cost more money. Products will certainly cost less if you have to “assemble or put together.” One could certainly expect to pay more for products if “installation or remodel” is needed. I am willing to pay money for a service I can’t do and I don’t expect the cost of a product to cover the cost of service also. A company may advertise the price of service is included in the purchase price, but we all know the hidden cost in that purchase involves the service.
Where does price stop and value start? I would say that is to be determined by whoever is spending their money. Everyone has their own idea of value and if money isn’t hard to come by, why would one ever do a DIY project? I sure wouldn’t, and those who can just throw money at any type of project or service most likely aren’t buying their goods and services from Wal-Mart or IKEA either.