Tuesday, August 26, 2008

Water Heaters, Economics, And Headaches

On the phone yesterday. I had been looking at the website of one of those "big box" home improvement stores, the orange one if you must know, for a solution to a hot water problem. The guy at the Danville store told me he had a 2.5 gallon "point of use" water heater for 199 bucks, and a 6 gallon unit from the same maker for 193 bucks.

I was curious, so I asked, "Why is the smaller unit priced higher than the larger one?" "Oh", he answered, "since there is a much smaller demand for the 2.5 gallon unit, and we sell so few of them, we have to charge more".

I'll wait a moment while that sinks in.

I tried to explain that his logic flew in the face of all known economics, supply and demand and all that, yet he still insisted he was right. OK. I'll accept it. It's still wrong. But as long as he wants to believe that, who am I to try to convince him otherwise.

I've always been one to continue to pound my head against the wall in order to stop the headaches, so I ventured down another path with him. "Why", I asked, "does this same unit cost 30 dollars less on the website?"

"That's the price before shipping charges", he replied.

"OK, but you do stock this item in your store, correct?"

"Yes sir, we do".

"Then can you explain the 30 dollar difference between the store price and my price if I ordered it from the website?"

"I did, sir, that's the price before shipping charges". (Gotta give him credit, he was very polite. Stupid. But very polite about it.)

OK. This tiny little water heater, delivered to the big box store as part of a full truckload of other stuff, warrants a 30 dollar shipping charge added to the customer who drives to the store to pick it up. The same 30 dollars I would pay if I had a big ol' truck bring one single unit to my front door.

Damn. My head hurts.

There's a meaning here. I don't know what it is, but there's certainly a lesson here somewhere.

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