Worse on Purpose – How Corporate Greed Killed Product Quality – Worse on Purpose

I did a little research study back in 2003 where I went to various grocers and purchased the same product at these grocers and compared.

Walmart has larger boxes, and less contents, universally, for pretty much everything in a box, and they charge 1/3 more for their 2/3rds of what you get everywhere else. They make nearly 50% more profit from that little slight of hand. And try discussing this with any shoppers and they will say "but the box is bigger", <- actual statement from a CS PhD, demonstrating how it does not matter your education, once outside of that specialization you're an idiot.

There are Chinese machine manufacturers who use fake German brand names because for a long time Germany was selling the manufacturing machinery to China and they have a good national brand image.

I'm pretty sure that this sort of thing happens for stuff in big box home improvement stores like Home Depot and Lowe's, too. Things like plumbing fixtures that appear to be identical to counterparts in smaller stores will have off-by-one or suffixed product numbers, and are made with cheaper plastic internal parts than when purchased elsewhere.

Yes, I've heard of this effect in marketing. If you make any reference to Switzerland, it's instant sales bump, even if you hold everything else equal. This is also how you got "Häagen-Dazs" ice cream brand. It's fully American, but the name sounds vaguely Scandinavian, so it has to be better, right? Well, customers sure do think so, and are willing to pay the premium.

That might be an outdated accusation. There was a time when a touch of research or “caring about quality” was enough to avoid the pitfalls of garbage products, but I don’t believe that to be a fair statement anymore. The website details the history of some examples, but the implication is between the lines: the only reason you used to know a product would last 20 years is because that specific product with those specific parts has already lasted 20 years. Don’t take advice about living to 100 from a 32 year old, don’t trust a warranty that’s longer than the company selling it has existed, and don’t trust that model XB5 is the same as your grandmas XB1.

How can you possibly know if you’re getting a quality product when the reviews you’re reading are for a model that doesn’t exist anymore, or are meaningless generalizations about a mega conglomerate? Saying “Brand X sucks/wins” only has the potential to be meaningful when it’s a single company in a single area and that has made that exact model in the same way for longer than your warranty on it. “Whirlpool sucks/wins” is as meaningless as reading “Water tastes good/bad” from everyone on the planet.

Agree, but there’s also an element of consumer irrationality. Lower price + lower quality means you can buy more of what you want now, even if it means that you’ll end up with net less of what you want in the long term.

Most consumers, me included, are not making purely rational decisions based in price and quality, even in domains where they are qualified to judge quality.

Why do I no longer have any reliable signals for quality? Price, brand, materials, and word of mouth are all you really get, but price and materials are meaningless and brand and word of mouth stop mattering as a company starts to coast on its reputation for higher margin. Genuinely don't know how customers are supposed to choose quality when they want it. I always want it.

The market for lemons is always bustling, I guess [1].

[1] https://en.wikipedia.org/wiki/The_Market_for_Lemons

Chasing eternal profit growth isn’t a fact of life, notwithstanding the mythology of commodification. Neither are all investors motivated purely by profit. Neither is it clear that everything can be improved upon (much less that outsiders can improve on it better than the incumbent). Sometimes “do a thing, do it with excellence, make a modest living from it” is enough.

One thing I like about Mr. Sapp’s work at Worse On Purpose here—he (or perhaps his LLM, or perhaps he’s LLM) gives considerable attention to firms that don’t do it that way. Where:

> Quality, ownership, and stewardship all check out. […] Most of these are family-owned, trust-owned, employee-owned, or publicly traded with a long track record of not selling out.

It’s useful to have actionable alternatives, and I put more stock in his organizing thesis given how well its brand preferences line up with my own.

https://ledger.worseonpurpose.com/status/approved

https://ledger.worseonpurpose.com/methodology

Once a product becomes so big it cannot increase in market share the only way to increase the total amount of profit it generates it by reducing the cost to produce the product or increasing the price.

And what if I do care about quality? As the consumer, I do not even have that choice to make 99% of the time. This is very much a false equivalency and it isn't even close.

Companies get to choose what products or product qualities to make. If I, a consumer, want or need a product, I can only choose between what is made available to me by the companies.

It certainly doesn't help that it's nearly impossible to tell what is or isn't a quality product before or even after you buy it. What am I supposed to do when I buy a new power tool? Rip it apart and inspect all the parts to determine if it's "quality"? How am I supposed to tell if it even is "quality"? I'm not a manufacturing or engineering expert. Even when you think you're buying quality, it's not most of the time. Companies sell shit products at premium prices all the time because almost no one can tell the difference.

I think this is the wrong take.

If this was really the truth, the brand names wouldn't matter. But instead the brand ends up as the sole desirable target in the corporate sales.

I think the more likely answer is that being an expert judge on a product's quality is just very hard.

More so when you have to buy it before you can use it.

So people tend to trust brands they've had good experiences with, or heard others having good experiences with.

The greed here is in leveraging that trust to sell a shitty updated version of the product.

Yeah. Nobody is innocent here.

Someone linked to The Market for Lemons below. This is exactly right. We now live in the World of Lemons. Everything is lemons, because we can only properly judge quality for the tiny number of things we truly care about. For everything else, we just buy the cheapest thing, because by definition we don’t care enough to do otherwise.

The only possible solution is to buy less stuff, to the point where you have the capacity to care more about each thing, and enough money to pay for these things, which will inevitably cost more.

But then that means making peace with the idea that not having a thing can be better than having a crappy thing. It’s a tough sell to the consumption mindset.

That's certainly part of the problem e.g. with airline seats. But there's also the issue that quality attributes can be difficult for casual customers to discern.

Ethical attestations about treatment of workers, animals, and environment are not always honest. Design flaws may not become apparent until the product has been in use for some time and longevity may only become apparent after many years of use, by which point the newer iterations may be qualitatively different.

It used to be that one could invest time in identifying quality brands, but many brands now are simply a temporary asset to be quickly squeezed of value.

Consumers seeking a deal could be a symptom of affordability problems as wages stagnate while inflation keeps prices going up.

One could also blame corporate greed here as well, choosing to keep those extra profits or distributing them at the executive level, rather than increasing wages for employees to maintain their buying power.

So instead of more money to buy better quality items, we get things like Temu as the answer, selling trash and framing it as “shop like a billionaire.”

There is also a demographics angle to this. People who grew up poor and now are middle class tend to favor larger quantities of goods over quality. And this is exacerbated by immigration.

It's completely possible to go high quality and low price - it's precisely how China is pretty much taking over every single industry in existence. But in the US you tend to pay low prices for junk, or unreasonably high prices for ostensibly high quality. I think that's largely because of implicit collusion between companies in most industries, particularly those with high barriers to entry.

So for instance see the Phoebus Cartel. [1] It was a cartel in the US (and Europe) including General Electric, Philips, and others that engaged in a wide-ranging conspiracy to exploit the market for lightbulbs. They intentionally lowered the quality of bulbs, driving planned obsolescence and thus increased sales, and even engaged in spot [un]quality checking of cartel members to ensure that nobody's lightbulbs would last too long.

In modern times I don't think companies would usually be so overt, but there's nothing illegal about unspoken cartels doing the exact same thing. For instance even in the video game domain, up until the PS4 era major players used to subsidize game console hardware to a wide degree. Then with the PS4 Sony stopped stopped doing that, and simultaneously so did Microsoft. In a competitive market that's exactly when you'd go subsidization to the extreme, to clinch the market to yourself. But so long as both companies agree to stop subsidizing hardware, then they both stand to make a whole lot more money. And that's exactly what happened. In the end, the consumer ends up with worse hardware, pay more for it than they would in a competitive market, and companies make way more money. I think that makes it fair to blame corporate greed.

[1] https://en.wikipedia.org/wiki/Phoebus_cartel

Companies organize and consumers can't. Seems pretty obvious.

Exactly this. Oh no, these airline seats are cramped and miserable and were backed in like sardines, what’s wrong with these airlines, but I’ll buy whatever ticket is the cheapest.

It makes sense to ask WHY this is hard. People can disagree endlessly on why. But a big part is, that antitrust/monopoly legislation has been almost completely dismantled and detoothed within the last 35 years, starting back with Reagan, and accelerating through the 90's when Clinton was at the wheel. The tiny bit that is still left, is only enforced either when parties fail to pay the bribe, or are bribed to enforce it, by other actors. Once you allow markets to consolidate into a single monolith, any new competitors will only be allowed to live, until they become big enough for the established incumbent to notice and then squish, with their unlimited access to resources. There is little incentive to start a competing business, if you know the trajectory is "IF SUCCESS THEN SQUISH".

I think it's just human nature, people that are ruthless with buisness are more likely to stay afloat compared to the moral alternative that always on the edge of collapsing

The legal and regulatory obstacles to starting a business probably don't help but IMO the bigger issue is trying to break into markets that are dominated by massive global players who benefit from economies of scale and access to funding that newer companies don't have.

The other side of this is that consumers don't have the information required to properly differentiate between competitors. If I'm shopping for a new TV I have no idea where or how it is made which is why so many people default to brand names as very rough proxies for quality. That information asymmetry is exactly what websites like this are trying to combat, but it's clearly an uphill struggle.

I don't think you can just say the market would decide when it is so easy to hide corner cutting and sell the thing cheaper.

Thanks, I hate it

Looks like that’s one factor. A number of brands I expected to be marked as Avoid based on who owns them were indeed marked as such. Pleased to see a few of my chosen brands were marked as good. Shame that basically no sun glasses company is good.

This is why independent review organizations are so important in the market.

The definition of “viable” matters

Not quite. "Getting worse" is discussing a mechanism where a product first has a good reputation, for good reasons. It's not "minimum viable".

And then the company proceeds to exploit that reputation for all it's worth, by making the product cheaper to make, while keeping the sale price the same, knowing that it takes a long time for the reputation to catch up. But eventually it does and the brand is basically defunct. Used up and discarded, being drained of reputational value.

The "minimum viable product" is part of the development process. If you are already at a certain quality and choose to make it worse, this is something else. Enshittification or just greed come to my mind.

Its because of monopolies

It's just crapitalism - make thing as cheap as possible and charge as much as possible.