Saturday, June 14, 2008

How To Deal With Door To Door Salesman

When a salesman comes to your door he benefits - he has the chance to sell you goods, if you don't want to buy it hasn't cost him anything. He has no renting costs and he has direct access to the consumers. On the other hand the homeowner invariably loses out. We have the cost of answering the door to an unwelcome visitor. The cost here is in terms of time wasted, and disruption to our leisure time.

This is an ingenious solution to this problem of market failure. - Pay a dime to ring the bell.


If the caller is a friend they get the dime back. If the caller is a nuisance - salesman or canvasser, they don't. This means that the unwelcome salesman has to pay you something equivalent to the cost of you having to answer the door. In this case you can't lose. If the salesman is unwelcome at least you have been compensated for your inconvenience. It also forces the salesman to think whether they really want to knock on the door. If they have really attractive goods, they may be willing to pay the entrance costs because they think they will recoup them. However, if they goods are mostly useless they may be unwilling to pay the entrance fee - the rent and therefore not bother you. This means an unnecessary transaction is avoided increasing market efficiency.

Problems
  • What if your friend has no cash on them?
  • Cost of buying the box
  • It makes you look a bit tight
  • I think the principle is not so much about money but the fact you get your own back on the irritating salesmen.
  • Rather than ringing the bell they may just knock very loudly.

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