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Is This Ethical? Yes Another One!!!

by Mike Bogowski
21 replies
Righto,

This is a little social experiment and a bit of fun for those for and against paying $2 an hour for outsourcing services... Personally, I'll pay $2 an hour, hell i'll pay 50cents an hour if someone is willing to do the job for that price. I also pay bonuses for jobs well done but thats another story.

- An LCD TV retails for $1000 in the USA
- You can buy it from eBay direct from China for $500
- Ignore your own personal preference for shopping online vs. bricks and mortar.

Now, which one would you buy? To me this is exactly the same thing. The big US retailer makes a huge markup on the TV because he needs to to make a good living. The guy in China doesn't need to make as much money, because the cost of living is low.

I am interested as to how people react when the transaction isn't so personal. Or maybe you see this situation as completely different.

Thoughts?
#ethical
  • Profile picture of the author Steven Fullman
    I'd go China. Personally, I care less about the retailer's profit margin than my ROI.

    As long as the seller has a decent reputation.

    Steve
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  • Profile picture of the author Steven Carl Kelly
    It depends. In some cases, I'll pay more to buy something from a particular seller because of my past experience with them. However, based on the parameters for your query, I'd go to China, because I wouldn't pay DOUBLE.
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  • Profile picture of the author Clark
    When the horse is dead, dismount.

    Seriously, you're not going to change anyone's human conditioning through a forum post.

    I have no problem focusing on my ROI above all else because I report directly to my family and their needs.

    Do what makes you feel comfortable with you and block out the noise.
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  • Profile picture of the author tomw
    It'll probably cost around $500 to get the individual TV shipped from China, if not more. No economy of scale etc...

    There are more factors involved in higher prices than simply greed on the part of the Western retailer. One of which is the high labout costs in the West in order to do the simple task of actually selling you the product, to name but one of the countless additional costs.

    This is not personal on the side of the retailer either. In fact, sometimes the margins are so low (even negligible) that some rely on upsells or cross sells of expensive warranties to address potential deficits resulting in an averaged profit based on volume metrics as opposed to a per unit profit.

    Things are never black and white.

    Thomas
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    • Profile picture of the author Steven Fullman
      Originally Posted by tomw View Post

      It'll probably cost around $500 to get the individual TV shipped from China, if not more. No economy of scale etc...

      There are more factors involved in higher prices than simply greed on the part of the Western retailer. One of which is the high labout costs in the West in order to do the simple task of actually selling you the product, to name but one of the countless additional costs.

      This is not personal on the side of the retailer either. In fact, sometimes the margins are so low (even negligible) that some rely on upsells or cross sells of expensive warranties to address potential deficits resulting in an averaged profit based on volume metrics as opposed to a per unit profit.

      Things are never black and white.

      Thomas
      Blimey, Thomas. That's a bit "thought-provoking"

      I just went for the cheaper option (there was no mention of a stealth delivery charge)
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      • Profile picture of the author tomw
        LOL! There never is!



        Thomas

        Originally Posted by Steven Fullman View Post

        (there was no mention of a stealth delivery charge)
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  • Profile picture of the author Uncle Dimitry
    you could get your TV full of radioactive crap inside, because China has no regulations about that. US products have to pass numerous tests, that's why Chinese stuff costs less (because it is garbage)
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    • Profile picture of the author Chris Lockwood
      Originally Posted by Uncle Dimitry View Post

      you could get your TV full of radioactive crap inside, because China has no regulations about that. US products have to pass numerous tests, that's why Chinese stuff costs less (because it is garbage)
      Where do you think the TVs sold in US stores come from?

      They aren't made in England.

      I'm pretty sure there no longer are any TVs made in the US.
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  • Profile picture of the author Allen Graves
    I think it is different because you're talking about a purchase from a large/successful company that sells $500 televisions.

    $2 an hour is WAY less than minimum wage in the United States, and I'm sure in most other countries. Less than minimum wage doesn't sit right with me. I'd feel as if I was doing something wrong.

    All things being equal, I would purchase the $500 TV set.

    JMO,
    AL
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  • Profile picture of the author Evita
    I just outsourced my first job.

    I didn't go with the least expensive offer. I went with the offer that was reasonable, and where the person seamed to be adequate for the job and had great feedback.

    In the end, sellers will sell at a price they feel is either justified, or what they can get, according to the market conditions, buyers will purchase what they perceive to be a good value...

    A good value is in the eye of the beholder. Not necessarily price alone.

    Such is a free market.

    Evita
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    • Profile picture of the author Steven Fullman
      Originally Posted by Evita View Post


      I didn't go with the least expensive offer. I went with the offer that was reasonable, and where the person seamed to be adequate for the job and had great feedback.
      I went for the cheapest TV, because it was the same TV wherever it was shipped from.

      Human talent, as you say, needs more careful weighing-up. Hence ROI.

      Steve
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  • Profile picture of the author polimedia
    Banned
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    • Profile picture of the author Steven Carl Kelly
      Originally Posted by polimedia View Post

      In short, hireing is not the buying of an employee.
      Also, I would point out that when you outsource work, you're not hiring an employee, either. You're entering into a contract with an independent contractor.
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      • Profile picture of the author Allen Graves
        Originally Posted by faxinator View Post

        Also, I would point out that when you outsource work, you're not hiring an employee, either. You're entering into a contract with an independent contractor.
        Good point -

        But we live in Tampa. I just couldn't do it. Even if the person was from China or wherever - I'd have to pay them what I feel is fair to me.

        $2 an hour making them rich? Then they'll have a crap party in their pants when they get the $10+ an hour that I'd pay if they gave me the consistent quality.

        AL
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        • Profile picture of the author Steven Carl Kelly
          Originally Posted by Allen Graves View Post

          Good point -

          But we live in Tampa. I just couldn't do it. Even if the person was from China or wherever - I'd have to pay them what I feel is fair to me.
          At the end of the day, you naturally have to do what you feel is right.

          Personally, I don't outsource much, but when I heard that high school teachers in India make less than $1.20 USD per hour, I felt like outsourcing some articles to India and pay $5.00 a piece. If they could turn out two in an hour, they'd make in one hour more than a high school teacher makes in a day.
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    • Profile picture of the author Mike Bogowski
      Originally Posted by polimedia View Post

      I don't see how the TV example stands.

      Suppose the only reason I'm buying the TV is to smash it with a hammer. That's perfectly fine, it being MY TV. But if the only reason I hired people was to smash them with a hammer, that'd be quite not so fine.

      In short, hireing is not the buying of an employee.
      The TV is not the person

      The TV is the article that you're paying $2 for vs. paying a US worked $10 for
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  • Profile picture of the author Bev Clement
    You've missed out a lot of factors in your OP. The large company have costs and overheads which the direct shipping from China doesn't.

    I can go to China tomorrow, and buy a TV which is cheaper than it would be in the UK/US but that is because I am not shipping it to the company in the UK/US and having to pay my staff wages.

    The other problem is that people tend to use these examples ($2 articles) and use the standard of living in the US. My problem is expecting a person in the US to write for $2. The cost of living in most of China is far less than in the US, so people don't need to have higher wages. The argument is circular in that you talk about sweatshops etc, but the bottom line is they exist around the world. People in good jobs in the US are being abused by their employers. But, the average person in China who doesn't have a job, couldn't afford American prices for their basic everyday food.

    We lived in Mainland China and rented a 1500 sq ft apartment for about $200 a month. Our utility bills were around $30 a month, and if we spent $100 a month on food then we were eating like kings and buying lots of imported food. We now live in HK and a 600 sq ft apartment costs $5,000 (US), utility bills are around $600 and food shopping you don't want to know.
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  • Profile picture of the author Li Weng
    Don't think it's got to do with ethics. It's leveraging competitive advantage.
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  • Profile picture of the author Floyd Fisher
    I guarantee you'll end up paying almost the same after import duties and shipping. Try it yourself and see.

    PS: Did I forget to mention it also has zero warranty? I hope you're super handy with electronics god forbid you got a bad one.
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