- Common Law of Business Balance
The Common Law of Business Balance is a meditation on price attributed to John Ruskin. It reads as follows:
- "There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person's lawful prey. It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money -- that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot -- it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better."
This is a classic quote on the possible folly of automatically choosing low cost as the best way to make a purchase decision. It appeals to those who believe, or who want to persuade others to believe, that price is a possible indicator of quality.
The common Law of Business balance should also involve and embrace the seven P's of marketing a business, product or service identified: product, price, place, promotion, people, packaging and positioning. For without such how can any business, institution or organization claim to be "balanced". It is also fair to say, do not forget the "balance sheet" another good example of the common law and general practices of balance. [Paul Branson - InfoGurushop.Com]
This is one of the basis used in evaluation of prices in bidding situations by Purchasing and Supply Chain Management professionals and used as reference in one of the Modular Learning System from the ITC United Nations Conference on Trade and Development.
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