Does the phrase “you get what you pay for” still stand the test of time?
The quick answer is yes, the more educated answer is no.
There are many products and services that obviously sustain a high level of quality design and thus receive their warranted premium price on the market.
On the other hand, many products today (think Dre Beats) get away with the bear minimum while charging exorbitant pricing.
“Beats began to sell its sleek, bass-heavy headphones in 2008 as an alternative to the lightweight earbuds that Apple included free with its iPod players. And even at prices of up to $450 apiece, they quickly became fashion statements. The company’s headphones have fat profit margins. Headphone designers estimate the cost of making a fancy headset is as low as $14.” – NY Times
In terms of the retail product market, this is simply because the cost of branding, advertising, paying for factory and storage, shipping and packaging the product, and employee wages (and these only tend to get higher if you source locally in countries that have minimum wage).
That being said, this product retail market is still far more regulated than the service industry, where it’s more of a Wild West situation and a free market. It requires trial and error, and getting screwed by a service provider often means you’re suspicious the next time around and really fine-tune your search to make sure there are protections in place for you.
It’s incredible how many complaints we see from customers online about various service providers, and specifically relating to those of us in the marketing industry.
The truth of the matter is, websites such as Upwork, Elancer, and most importantly Fiverr have created a landscape where North American and developed countries are able to buy services that used to cost ten times more several years ago when these platforms were not available.
For example a logo designer in the states can no longer afford to charge $500 – $1000+ USD for a brand logo, because overseas talent have the same tools available to them (photoshop, illustrator, etc.) and online tutorials through YouTube where they can be self-learned in this art and provide it at a much cheaper rate due to the weakness of their local currency.
Companies can read reviews and are protected by these platforms to ensure that they receive a high level of quality; on top of it, you’re provided multiple revisions by free lancers while getting the best bang for your buck (great quality and a low price).
Unlike products, many service providers today can work from remote locations such as coffee shops and their homes and use their skills digitally for companies.
Thanks to the Internet, this new model and globalization really demolishes the notion that you need to pay a high price to get the best quality.