The Cost of High Regulation – Guest Writer
Recently, I wrote about the high cost of living?a twist on the common phrase of the high cost of dying. Eventually, I will discuss the high cost of regulation in the funeral industry but for now, I?ll introduce the concept of regulation within the funeral industry.
Funeral prices are highly regulated in the funeral industry by the Federal Trade Commission (FTC). The prices are not set by the FTC, however, the description of the prices is critical and an infraction could yield a $10,000 fine. We are not able to increase prices within the General Price List but discounts are always acceptable. Funeral prices are a constant issue in our discussions with others but I think of them often when I dine out knowing I can perform the same function for a whole lot less.
I love to eat at nice restaurants in Albuquerque. One of my favorites is Antiquities in Old Town because the atmosphere is incredibly romantic and their menu always features southwestern ingredients that enhance the traditional steak meal. We are treated to the wonderful service and ambience and presented with menus that detail any delicious choice. However, when my husband and I were there recently, we ordered a bottle of wine. It was appropriate for the meal but it made me think of Costco caskets and now with Wal-Mart entering the scene, I am compelled to write about the comparison.
I know I can buy the bottle of wine my husband and I shared at Costco for probably one-half the price of what we paid at Antiquities. Did I complain? Of course, not! We were celebrating 25 years of being married and enjoying a beautiful chateaubriand without the wine was not an option. So how come the FTC is not regulating the price of wine and the description of the price in fine steak restaurants?
I?m not going to bore you with details about the FTC and their regulation of the funeral industry but consider this?I wonder if the gym where you have a membership would offer a discount if you brought your own towel? Do you think the beauty salon operator would offer a discount if you could bring your own bottle of hair color to the salon? I know I can buy an entire bottle of acetaminophen for the price of what the hospital charges so would I be offered a discount in the price of my hospital stay if I brought my own acetaminophen? If the price of jewelry could be reduced by bringing your own jewelry box, would that revolutionize an industry?
A casket is a large item that must be shipped to the funeral home and its quality must be verified by a family member. It could delay the funeral if it is delivered with any damages and most funeral homes will not allow service details to be finalized without it. With all the other details involved, why would a family want to be bothered with another aspect in the funeral process? I know what the critics will say, ?To save some money.? The cost savings is minimal compared to the overall costs of the funeral and most funeral homes offer low-cost alternatives for caskets (we offer a casket for $599.)
Back to my favorite steakhouse?Antiquities does not receive chain discounts like their bigger competitors with established corporate vendor relationships and for this reason we know we are paying more for the personal, smaller business aspects. In comparison, Costco and Wal-Mart are able to establish vendor relationships that give them deep discounts compared to the local smaller businesses that compete with them. They still enjoy profit margins because of the larger quantities they purchase. Their shareholders guarantee it. As a small business owner, I know the challenges small businesses face when confronted with the behemoths of Costco and Wal-Mart. Nonetheless, I am still going to enjoy my clean towel at the gym, my hair colored by my beautician, and the beautiful silver necklace in an exquisite jewelry box after a nice bottle of wine at my favorite local steakhouse!
Gloria is the proud owner of a funeral home/mortuary. After being married to Louis for 25 wonderful years, she feels like she has more years of experience in the industry than her resume would show. The Salazar family has been in the funeral industry since the early 1900?s and so he has been raised in the business just as his own children have. At Reflections, Louis and Gloria serve families that God has brought into their lives.
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