Running a small business, we're constantly aware of "opportunity costs" of making decisions. To define opportunity cost, here's what I found on Google:
"the loss of potential gain from other alternatives when one alternative is chosen."
So, for example: If I decide to drive to California for a business meeting instead of flying, I may save some cold-hard-cash when it comes to buying fuel instead of a full-on plane ticket. Maybe it costs $200 in gas instead of $450 for the ticket. Great!
But, what have I lost in exchange? Well, it's pretty simple. There's 40 hours of lost productivity in there, because my round-trip journey took (at least!) 10 times as long as flying would have taken. Not to mention... I can work when I'm flying. Not when I'm driving.
So - the next step: Let's try to fathom just how much those 40 lost hours are worth to my business.
- Let's say in my hypothetical world that I pay myself $20 per hour on average. I'm worth much more than that if I want to be profitable. Let's say double. Let's say I'm worth $40/hour. So - $40/hr x 40 hours = $1600! Add that to my cost of gas, and I'm already $1350 over the cost of my plane ticket.
- Now let's consider that I'm way more tired after driving than I would have been by flying. That will cause my work in California to suffer. (Costs me more $$)
- I didn't get to relax on the beach at all, so I'm CRANKY and I don't want to think about my work I have to do in California. (work will suffer more, costs me more $$).
Anyways - you get the point. Unless you value your worth at $6.25/hr or less, flying is by far the better choice.
So, how does all of this apply to bagpiping? Well, opportunity cost exists all throughout life, not just in business. We believe (and have THOUSANDS of testimonials to prove it) that this concept comes into play in a significant way when it comes to the art of delivering bagpipe products to customers. This is the main crux of this post.
When you play your pipes, there is a definitive value to your time playing, and the level of enjoyment you derive during that playing time. A lot of us can only allocate an hour a day to piping (if that), due to life constraints. If you want to know the truth, I’m in this boat more than ever myself, what with a business to run and all. I have 1 precious hour each day maximum, and no more, to get the pipes out, play, improve, enjoy.
How do you value the time you have to play bagpipes? Do you dare try to calculate the monetary value? It exists! What is the monetary value of taking time away from work, family, and other commitments to focus on an arguably-trivial instrument? On the flip-side of the coin, factor in how much less happy your life would be without your 1-hour-a-day with your pipes - What’s the value of that? How much would you pay to avoid giving it up? How much would you pay to maximize the enjoyment and productivity of this time?
We’re often criticized by friends, family, colleagues, and customers because our prices at PipersDojo.com are “too high.” But, we believe (and have the happy customers to back that belief) that the slightly higher prices we charge relative to some “price-war” companies offers a far greater overall value in exchange. Even though most products we sell are “exactly the same” as these other companies, there’s the ever-so-important “bagpipe opportunity cost” that needs to be factored in addition to the simple product itself.
Consider that the average improvement-oriented bagpiper spends $500 per year on bagpipe supplies. The “thrifty” piper might get as low as $450/year by price-hunting (which takes time by the way…which has a value...) while the Dojo passion-driven piper might be “forced” to spend $550 per year (max) to stick with their favorite company, because we’re so “highly priced.”
But, now let’s do our math.
For the price-war company, here’s some of the potential problems we are GOING to have (it’s just a matter of when).
- Products might not ship in a timely manner. (Sacrifice Valued Practice Time)
- Product might not be right for you. (Sacrifice Enjoyment of Valued Practice Time.)
- Returns are really cumbersome and take forever. (Sacrifice Valued Practice Time)
- Chanter Reeds aren’t selected well (or have the wrong strength), so they need to be returned.(Sacrifice Valued Practice Time)
- Drone reeds aren’t the right selection for your bagpipes.(Sacrifice Valued Practice Time)
- Bagpipes aren’t set up well. (Sacrifice Enjoyment of Valued Practice Time, and likely pay for a lesson to remedy the situation.)
- So on and so forth…
What would you be willing to pay over the course of a year to avoid any of these problems? I’d pay well over $100 (the difference between Dojo and price-war companies).
Now, on top of that, consider the Dojo benefits:
- Products consistently reach you within 1-2 business days. (Increase Quality of Valued Practice Time)
- Products are always right for you, thanks to our educational resources and consistent, abundant support. (Increase Quality and Enjoyment of Valued Practice Time)
- Returns and easy, timely, hassle free.
- We offer free access to our educational materials and seminars with each and every purchase.
- We take extra special care, with your valued practice time in mind, to send you the right Chanter Reeds.
- We know what drone reeds work for which pipes.
- We always have an expert set up new bagpipes to make sure we’d play them ourselves.
- And so on, and so forth.
What is the monetary value ADDED to your yearly bagpipe supply expenses by working with the Dojo? I’d say at least another $100. If you’re clever, you’ll see that the Dojo actually SAVES you $100 per year, if you factor in what we call “bagpipe opportunity costs.”
If you choose to calculate opportunity costs, you can easily see why playing the price-war game in bagpiping (your hobby that you’re passionate about, but don’t have nearly enough time already to devote to) is NOT in your best interests. Here at the Dojo, we help you make your hobby/passion more fun, more accessible, and we actually VALUE your hard-earned time to play this instrument.
Don’t forget to factor that in the next time you need to purchase bagpipe supplies. As you can see here - you can't afford not to!