Summary: Too many consumers use price as a proxy for quality in deciding between products, rather than doing a little internet research or even relying on their own direct experience.

For example, all infant baby formula sold in Australia is strictly regulated such that there is no real nutritional or quality difference in the product content between like-for-like brands. Yet, some consumers will pay 250% more for an expensive option like Bellamy's or A2 rather than the cheapest option: Aldi's Mamia.

Five minutes of internet research will readily answer most quality queries. And there are plenty of opportunities to use direct experience to determine whether cheaper products are of sufficient quality or suited to your needs. Relying on price is always unnecessary and a lazy, inaccurate method.

Everyone can appreciate that "you get what you pay for" is obviously false for some things - like electricity. But price turns out to be a poor indicator of quality for many products and services. Hence, consumers can save a lot of money by assessing quality, utility and effectiveness directly.

Gain: ~$500 per year saved on buying value-for-money products rather than expensive ones.

Details:

1. Why do some consumers pay 250% more for brands that don't differ in quality?

 All infant baby formula sold in Australia is strictly regulated such that there is no real nutritional or quality difference in the product content between like-for-like brands (e.g. 0-6mnths, Gold). Yet, the prices differ considerably:

> Mamia Infant Formula Starter Step 1 (Gold) 900g - $13
> Nutriforme Gold Step 1 Infant Formula  900g - $15
> S-26 Gold Step 1 Formula Starter from Birth  900g - $23
> Bellamy's Organic Step 1 Starter Formula  900g - $28
> A2 Platinum Premium Stage 1 Infant Formula  900g - $34

So why does anyone purchase A2 and Bellamy's? In most cases, the reason is very simple: they are too lazy to investigate any worthwhile nutritional or quality differences and presume that more expensive products must be better quality otherwise they wouldn't be more expensive. No doubt this presumption is aided by the use of words like: platinum, premium and organic.

See:
> Infant Formula: Choosing baby formula
> Mum Home & Baby - Baby Formula Review: Which baby formula is best?

Even when products are clearly different, price is almost never the best indicator of quality when you can rely on your own direct experience (trying the various options out) and research other consumer's opinions online.

For example, Aldi's Mamia nappies are around half the price of the most expensive brands. Yet, most consumers who try them find them to be of comparable and sufficient quality. Many even prefer them.

See:
> The Bub Hub: Reviews - Nappies - Disposables

There are many other examples of every day products where there is enormous variation in price that has little to do with the quality, utility or effectiveness of the products.

The price-based proxy for quality is usually false and if you extrapolate these potential savings across many products where the same applies, the annual savings can easily run into the hundreds of dollars.


2. Don't forget to assess the full cost of using a product not just the initial outlay

Remember, in making proper value-for-money decisions, it's important to consider the full lifecycle costs not just the initial outlay.

See: The Checkout - Buy now pay forever


Further Info: