Sunday, February 22, 2009

Getting a Good Deal

I love to get a good deal. What most people don't realize is there is a lot of work involved to get a good deal. You may think that you are getting a good deal, but unless you have done your research, you just got what looks like a good price.

So how do I get good deals? First, I have to identify what is worth getting a good deal on. Milk may be $2.99 at WalMart but only $2.29 at Aldi. With that kind of minimal price difference, I am not going to go out of my way just to save 70 cents. On the other hand, a dining room set may be $1200. If I can find something equivalent for $800, then I have found a good deal. Finding a good deal starts with knowing what is worth looking for the good deals.

Second, you need to figure out what a reasonable price is and what you are willing to spend. These can be two separate things. For instance, $200 for a Wii Game System is reasonable. On the other hand, I am not willing to spend more than $100 since I wouldn't play it enough. Hence, I don't have a Wii. Reasonable prices can be found by shopping (not buying). Stores, internet, and classified ads can all give you an idea of what things are selling for. The key here is to remember to factor in all of the costs (shipping and taxes). After seeing what a reasonable price for something is, it is now time to do the emotional decision and decide what your willing to pay.

Third, now the fun part begins. This phase could take a day or years, depending on what you found in step two above. A good deal should be at least 25% less than what you are willing to pay (which hopefully is less than a reasonable amount). A lot of people stop when they find something less than the reasonable amount and buy it then. Really, you should hold out for the good deal. Patience is key. While you made an emotional decision about what you are willing to pay, at this point emotion should no longer be a part of your decision

Some may say that I am being stingy by trying to get such a low price. Actually, I am doing a net benefit to the economy. For one, by spending less money on each item, I am able to buy more, thereby spreading my dollars to more establishments. Second, a lot of the good deals happen on closeouts/inventory reductions/slightly damaged/etc. By me buying them, I am helping to clear out their inventory and giving merchants the chance to stock newer items.

One of the great things about getting a good deal is you get to hear more sales pitches than ever before. I love salesmen, they have a job to do and their goal (in spite of what they may tell you) is to get you to buy as much as possible. Because of this it is always funny about some of the things that are told to you to "close the sale."

When we were shopping for a piano, the music store salesman told us that they were the "17th largest music store in the nation." I guess if you are in the 148th largest city in America, then this might mean something. Honestly, how "big" you are doesn't matter. What matters is price. I don't shop at WalMart because they are the largest retailer in the nation. I shop there because they have the right price for the things my family buys.

In looking for a hotel I am amazed that the rooms will be advertised with such amenities as a hairdryer or marble sink. The other thing that I laugh at is seeing them "brag" about their 250 thread count sheets or even 350 thread count sheets. I'm sorry, at home I sleep on 650 thread count sheets (and I don't want to go back to anything less). If your business is going to brag about something, be sure that it is worth bragging about.

The last part of finding a good deal is to make sure you check the non-traditional places. Ebay & Craigslist are great resources. I once sold a pool table on Ebay for $350. It came with the house I bought and was really worthless to me. The person that bought it probably would have paid $600-$1000 for a new one. He got a good deal. I got it out of my house. Both of us were happy with the transaction. Another place my wife and I have found good deals is at Aldi's. We bought a breakfast nook (seats 6) for $170 (we had budgeted $700). I found out it is renamed from another company's brand which sells it under their label in department stores for $450-650.

Shopping just to shop, I can't stand. Finding good deals while shopping I can handle.

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