This can be applied to kitchen appliances, washing machines, space heaters, power tools, and more, but hand tools are a good example. Lets look at a $5 vs $25 tape measurer (HDX vs Milwaukee @ Home Depot). It may not be worth to buy cheap and upgrade when it breaks.
For example, suppose someone makes $50K/yr. Assume that's for a standard 2,000 hour/yr job. That means their time is, at minimum, worth $25/hr.
The $5 tape breaks (spring return, or gets bent, etc), you drive to get a new one, you wait in line, you come home, you've probably spent an hour of your time. That's $25 of your time lost (Opportunity cost is always a real thing). You saved $15 on a tape measurer in the long run (assuming the second one doesn't break)? That is outweighed by the lost time, plus now you're afraid of the second one breaking too!
If you buy the $25 one in the first place, (or lets say $75 for a set of tapes sized for different jobs, including a good ruler/straight edge) you get a warranty and also ease of mind knowing that professionals rely on these things, so they probably don't break often, and when you need it, you know it will be there and you won't have to stop in the middle of a project to go to the store for a basic tool.
March 08, 2017 at 02:16PM
