Some big words there, but for average consumers like me, I would simply define ‘Cost of Ownership’ as the real cost of owning a service or product for the entire lifespan of that service or product.

Hmm…if that definition is too hard to comprehend, then a simple scenario is in order.

The cost of Laser Printer A is RM600 per unit, and it can last 3 years. Original toners is priced at RM250 per unit. In the 3 years of owning Laser Printer A, I estimate to use 6 toners.

Hence, my cost of ownership of Laser Printer A for 3 years is:

RM600 + (RM250 x 6) = RM2,100.

So, on a yearly basis, the cost of using Laser Printer A is RM700.

The cost of Laser Printer B is RM1,300, and it can last for 8 years. Original toners is priced at RM350. Since it prints more pages per toner than Laser Printer A, I used 10 toners for the whole 8 year.

Cost of owning Laser Printer B for 8 years is: RM1,300 + (RM350 x 10) = RM4,800.

On a yearly basis, the cost of using Laser Printer B is RM600.

In fact, a lot of buying decisions are quite similar. We are often perplexed by the choices of similar products that comes in varying pricing strategies, and it’s likely we opt for the cheaper alternatives. This might work for products that doesn’t have a long lifespan, but if we are going to be stuck using it for a long time to come, it pays to do a little homework. As the saying goes, “Cheap things are no good, good things are not cheap”.

No rocket science here, but just a thought for you when you are tormenting yourself over a buying decision where price is the decisive factor. Yes, sometimes we justify with the rational that buying 2 lousy products that is half as cheap means we can use twice as long than buying a good product that last about the same time. But think of the frustrations that the lousy product ‘delivers’, is it worth it?

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