Forgot your password?

the best way to buy

By Edited Nov 13, 2013 0 0

How to buy anything


A contract is formed whenever somebody offers a product at a particular price, and that is accepted.


This Article looks at the various points that make up a successful purchase.


There are three main points that are relevant in all purchasing, regardless of all other factors.  These are 1) Price, 2) Risk and 3) Value.  If you put these together you will have what could be determined to be the Total cost of ownership. 


If you were to look at a pair of trainers which cost £10, and another which cost you £30, as a Buyer, you would probably be tempted to say the £10 trainers were fit for purpose, so they represented the best value for money (or VFM).  If we added another couple of conditions to this, and looked at the quality of the trainers and the longevity needed, we would find out that the £10 trainers were of poor workmanship, and at a push would only last for 3 months, while the £30 trainers were of much better quality and could easily last 12 months, the £30 trainers would look the much better investment.


Only by combining a number of factors do we truly build up a picture of what could be considered as VFM.  Price in this example would only be considered towards comparing trainers and the Total cost of ownership.  The risk is plain, as nobody would want to spend money on anything if they knew that it was substandard quality…


There is a time when that very thing does happen.


I worked in central government for a time, and one of things I used to buy was ‘stores equipment’.  This consisted of differing items – from nails, to secure doors.  One of the items I was tasked with buying was toolkits.  The cost of these were around £50, which In the grand scheme of things was not very expensive.  The government went through 1000’s of these toolkits per year, so I suggested that we get a better set, and they would last longer. This in principle would have been a great idea, but the bigger picture showed that this was not to be the case.  The technicians wanted the cheapest toolkits, as they were flying all over the World, and once they finished the job at Post, they would leave the toolkit there, or just bin them.  The reason being that the toolkits were so heavy, that it would cost 100’s to bring them back on the plane.


I was always taught that Total cost of ownership could be considered like putting roof conversion in.  You can get a quote for the roof, but then you need to get quotes for the heating, plumbing, the bricks to increase the height of the roof, the electricity etc etc.  So a job that you thought could be achieved with a budget of £1000 rapidly turns into much more due to what is known as the ripple effect.  Yes you can raise the roof higher, but to make it livable in, you also require a number of different things to ensure that it meets all the regulations.


In summary, to buy anything, there is one anagram that is very helpful and you should look at this everytime you think you are getting a good deal.  It is easily remembered as SWOT.  This stands for Strengths (the longevity of the £30 trainers), weaknesses (the poor quality of the £10 trainers) Opportunities (can we look at purchasing this in a better way – such as the toolkits) and Threats (are these trainers going to fall apart due to the bad quality).


By taking all this on board we can know and recommend what would be a good purchase and would not be, regardless of how much it costs



Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Lifestyle