Making physical goods low quality, cheap, and therefore disposable is the equivalent of rent seeking.
Instead of growth and innovation, it’s how can the Company get recurring revenue after first sale.
The balance for the Company is finding a quality to price point ratio where either 1) the customer doesn’t care if it breaks because it was cheap and they know it’s cheap or 2) it’s cheap and breaks but the utility of it to the customer warrants (or with some goods, necessitates) them buying a replacement.
In the second case, the trade off would also include brand risk, but in the world of Amazon and TEMU, you can just sell the same thing under a new random name, there is no brand identity.
Instead of growth and innovation, it’s how can the Company get recurring revenue after first sale.
The balance for the Company is finding a quality to price point ratio where either 1) the customer doesn’t care if it breaks because it was cheap and they know it’s cheap or 2) it’s cheap and breaks but the utility of it to the customer warrants (or with some goods, necessitates) them buying a replacement.
In the second case, the trade off would also include brand risk, but in the world of Amazon and TEMU, you can just sell the same thing under a new random name, there is no brand identity.