We all love a cheaper deal. Getting a product a lower cost than usual increases it’s apparent value. And that is why bargaining came into existence. But negotiating for a lower cost isn’t always necessary to get something at a cheaper rate.
A basic principle of economics says that where the supply is comparatively higher than the demand, services or products are cheaper than normal. For example, if you are thinking of buying crude oil – and you are confused where to buy it from? You can buy it from the US but it costs 50$ per barrel in the states. That isn’t the best deal. And you’ll probably find a similar rate everywhere else in the world. Except for Saudi Arabia, where the oil is available in plenty. Hence, oil sellers are comparatively higher than those in the US. In the US you would have to compete with other buyers to get a lower price. But in Saudi Arabia, the oil sellers would have to compete with other sellers and hence the prices would be lower. And this is the reason why the rate per oil barrel in Saudi Arabia is 49$ – a complete dollar less than the rate in the US.
This was an example, but this phenomenon can be used for any product, service or commodity you want. If you want cheaper art, buy it from where there are plenty of artists. If you want to buy cheaper electronics, buy them from a country where there are a lot of large-scale electronics factories eg. Taiwan.
Recently, I’ve been looking for musicians for a short film I’m doing. I looked in India and found that the going rate for a 5-minute score was about 100$. That amounts to about 20$ per minute. Then I started looking abroad. I got offers from musicians in the US that were willing to do a score at 5$ per minute. That’s 4 times less than in India. The reason for this is that while there are excellent established musicians in India, there are comparatively few struggling musicians than there are in the US. Hence new musicians in the US are willing to do music at a comparatively lower price so that they can stay ahead of their Indian competition.
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