When you think about saving money, you probably don’t picture yourself paying full price for anything. On the contrary, you’re likely to think about finding deals, discounts, and promotions to pay less than the full retail price for everything you need.
While there is a time and a place for coupons and deals, there are a handful of reasons why spending more is actually the key to saving money in the long run.
A higher upfront cost often reflects better quality
Although a high cost doesn’t automatically mean something is of high quality, there is a correlation simply because high-quality materials naturally cost more. Anyone selling a high-end version of a product should be charging more to account for their higher production costs.
There are always options to choose from, and in many cases, you’ll need to pay more for the high-quality version of whatever it is you want. For example, dry-type transformers carry a higher upfront cost than liquid-cooled transformers, and it’s because they are built differently. Some applications require a liquid transformer, but when there’s a choice, many people choose a dry-type because they last longer and pose less of a fire risk. After all, oil is flammable, and it’s harder for air-cooled transformers to catch fire.
When you buy a dry-type transformer from a reputable manufacturer, you’ll pay more, but you’re getting a quality piece of equipment. For example, the best dry-types are hand wound, which eliminates the common winding errors made by machines. If a transformer is wound wrong, it will impact its function and longevity.
Good manufacturers also use superior insulation materials that aren’t cheap, like pure copper and Nomex. Since the insulation is what dissipates the heat, you don’t want a transformer with poor-quality insulation because it will fail prematurely.
Anyone who buys an inferior transformer can expect it to fail at some point, causing catastrophic damages, including extended downtime for their facility. That operational disruptions alone can cost millions of dollars.
Higher prices can buy a performance guarantee
Sometimes, it’s worth spending more money to get a performance guarantee, like a manufacturer’s warranty. Without a guarantee of some sort, you’ll be on the hook for all repairs. If a company offers a warranty, it’s a sign that they stand behind their products and are willing to eat the cost of sending you a replacement if it malfunctions.
Sometimes, you can get a warranty on lower-priced items and services, but they’re generally shorter and don’t cover as much. For example, really cheap office equipment might come with a 3-month warranty, but common issues won’t be covered. Some manufacturers even offer warranties that coincidentally expire right before most people start to experience problems.
In general, the longer and better the warranty, the more you’ll pay upfront. However, that money will not only buy you a better product – it will provide you with peace of mind.
Higher prices sometimes come with better customer support
Often, you’ll find that higher-priced items come with customer support options you can’t get with cheaper options. This is common in the SaaS industry, where you need to have a certain account level to get live support. Without official support, you’ll waste a lot of time trying to figure things out on your own, and this could lead to productivity loss and missed deadlines.
If the item or service you’re buying will be an integral part of your business, then it makes sense to pay more to get better support.
The expensive option is often more durable
Although there has been a significant overall decline in quality over the last 20 years, the cheapest items usually don’t survive more than a few uses. If you want something durable, you need to pay more.
You’ve probably bought something at a dollar store that didn’t last as long as you had hoped. For a dollar, you can’t expect much. However, if you only needed that item for one or two uses, it probably wasn’t a bad deal. On the other hand, if you need something that will last for a while, getting it from a dollar store to save money won’t help.
Going cheap is more expensive
At the end of the day, if you always buy the cheaper option, you’ll have to replace it sooner and more frequently than if you buy the high-quality option from the start. If you’re trying to save money, remember that you might save a few bucks initially, but it costs more to be cheap in the long run.
