Business
Switching to a new manufacturer is expensive, so the supplier who lands the first order holds the advantage. Suppliers bid very low to win the contract. Once the buyer has relaxed and the orders are secure, they raise prices bit by bit, sometimes abruptly, and cheapen the quality.
When buyers test for one sign of quality, dishonest suppliers learn to fake that sign rather than supply the real thing. Watered-down milk was caught by protein tests. Suppliers then added a toxic industrial chemical that registers as protein, so the goods looked top-grade in the lab while being second-rate or dangerous.
The author argues that the slow decline in quality is more than ordinary corner-cutting. He ties it to a wider cultural comfort with counterfeiting: making something look like the real thing while delivering less. Denying that any problem exists is part of the same pattern, so he says reform must come from the bottom up, not be imposed from the top.
A supplier can deliver excellent goods at first, then quietly and gradually swap in cheaper materials once the buyer stops watching closely. The point is to widen profit margins. Because the decline is slow and secret, each batch looks almost like the last, and the slide goes unnoticed.
A supplier loses little when a demanding buyer refuses a shipment, because the same goods can be sold in countries with weaker inspection. That exit makes it cheap to gamble on quality and safety. Rich-country buyers are also less central to the supplier than they assume; one large market took no more than a fifth of exports.
The factories that dare not play games with quality are the poor ones with few other options, and they end up making the better product. Established, comfortable suppliers have the leverage to cut corners and get away with it. Bargaining power, not skill, decides who stays honest.
A buyer who stays loyal to one supplier gives that supplier room to let quality slide. The strongest buyers keep quality up by switching suppliers regularly and using their size as leverage. Only the savviest can keep both prices low and quality high.
Workers on the factory floor often notice when something has gone wrong but do not speak up. With nowhere else to go, they cannot risk their jobs, and the author says they can hardly be faulted. Problems known to insiders therefore stay hidden from buyers until they surface as failures.
Shoppers do not choose freely among the world's products. The importers who control distribution decide which goods reach shelves and how hard their quality is checked. Their vigilance, or their lack of it, effectively sets what consumers end up buying.