[ONLINE SHOPPING] Is it Really a Bargain?

Category: Shopping

Every shopper loves a bargain, but how can you tell when you really have one? The games that sellers play with prices are as old as commerce itself. Bargain-hunting is particularly confusing online, where prices from all over the world are available. Here are some tips for sorting bogus bargains from real deals...

"Only Suckers Pay List Price"

My first shopping tip, whether it's online or in a store, is to ignore “list prices,” “retail prices,” “MSRP,” and anything else that purports to be the standard price that only suckers pay. Once upon a time, “list price” meant something; but as the NY Times explained, it’s now just a number that sellers pull out of thin air to make their actual, everyday selling prices look good.

Many shoppers compare online prices (plus shipping cost, if any) to what brick-and-mortar stores charge (plus sales tax). Too often, they ignore the cost of going to and from a store: gas, vehicle depreciation, and the value of one’s time. The main value of inspecting goods in person lies in subjective evaluations of quality. “Showrooming,” the practice of shopping in stores and then buying online at lower prices, is the bane of retailers’ existence. (Here's an interesting video which discusses the ethics of visiting a retail store to inquire about an item you know in advance you'll purchase elsewhere.)

Store prices may well be lower than online prices now and then, particularly when you are shopping for mass market items at a mass marketer. Walmart in-store prices are generally lower for the same products than the prices of Amazon Marketplace sellers, who are mostly small businesses with small purchasing power.

How to find the best prices online

Price comparison services like Google Shopping seem ideal for bargain hunters. But sellers pay a fee or percentage of each sale for referrals from such sites, and that cost is likely factored into the price you pay. Comparison sites may not show you the lowest price first, instead filling the first search results page with sellers who pay the highest referral fees.

Whenever you see a comparison site offering a freebie if you buy through it, you can be sure you’re paying for that gift in the form of higher prices for goods. That doesn't mean you shouldn't use price comparison sites -- just keep your eyes open and shop around. Bizrate, Pricegrabber, and Pricewatch can be helpful tools, epscially if you're shopping for a high-ticket item.

Smoke and Mirrors?

You may have heard that Amazon sometimes shows different prices for the same product to different shoppers, based on factors such as the shopper’s location, search history, and Prime membership. An item might be priced at $10 plus $4 shipping for non-Prime shoppers, and $14 plus “free” shipping for Prime members.

When I shop for the lowest price (which may not always be your top priority), I often start at eBay or another auction site. I want to know what bidders have actually paid for a product, so I look at “sold” completed listings. If I can find a price elsewhere that’s comparable to the lowest winning bid on eBay, I’m pretty sure I have a good deal.

Of course, there’s an old saying among auction losers: “The winner of an auction is the one who pays more than anyone else thinks something is worth, for something the seller didn’t think was worth keeping.” But that’s just sour grapes, right?

Bonus Tips for Online Shoppers

TIP #1: Various tools are available to help you find lower prices when shopping online. See my article on Price Busters For Online Shoppers.

TIP #2: Online reviews can be helpful, but sometimes they're bogus. See Can You Spot A Fake Product Review? For tips on how to read product reviews.

TIP #3: Have you seen the commercials where people brag about how they bought a 55-inch HDTV for $30? See my article Penny Auctions: Scam or Legit? to see why these "Penny Auction" sites are to be avoided.

What's your strategy when going shopping online? Do you always head for the same website, or do you employ online tools to compare prices? Your thoughts on this topic are welcome. Post your comment or question below...

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Most recent comments on "[ONLINE SHOPPING] Is it Really a Bargain?"

Posted by:

06 Nov 2017

So true. Been following a particular item on amazon ca for couple of weeks now. Listed as "sold by Amazon" not another party. It changes prices 3-4 times a day. I first started looking when it was $87 then it went to $152 then $114 then $132 then, well you get the idea. And then the ones that go up 2c then down 5c then up 7c in the space of an hour.

No way to tell what is real. Can only decide when you know what it's really worth by checking elsewhere and then hoping it drops in price at the right time of day.

Just a big game. Can only hope the consumer comes out the winner.

Posted by:

Kenneth Heikkila
06 Nov 2017

I live in a relatively remote area so travel to a brick and mortar store is often a huge factor in my purchase making decisions. I am also retired so time for research is not, though time for delivery sometimes is. I spend a lot of time researching prices and sometimes product reviews. I realize reviews are usually subjective and sometimes motivated by other things than trying to help a fellow shopper. I use the Honey browser extension and can not only see if I have the lowest price on Amazon, but the history of price changes like the ones Leo mentions. I also check EBay, Amazon, department and hardware stores with online presence. I use Amazon Prime when it is advantageous- a lot more often than one might think, but I don't often pay significantly more for the convenience of two-day shipping.

Posted by:

06 Nov 2017

Staples is one place where you might be able to save some money when buying online. I needed a new back pack and saw the one I wanted on their web site. I was near the store and it had them in stock, but noticed the in-store price was $25 higher. I pointed that out to the cashier who said they price matched on line prices, including their own web site.

Posted by:

06 Nov 2017

The other reason for lower prices is that the product is about to be replaced with a newer model and they need to get their inventory down before announcing their latest and greatest. Ask yourself is the offering been on the market for a long time? Can you be satisfied with last year's model?

Posted by:

john silberman
06 Nov 2017

Not sure if I would trust ebay as the lowest price indicator. More often than now I find better prices on Amazon than ebay.

Posted by:

06 Nov 2017

Check with Consumer Reports to get an unbiased evaluation before shopping.

Posted by:

Jonathan Skrine
06 Nov 2017

Not only is Amazon usually cheaper than ebay but Amazon is often cheaper than Amazon 'lightning deals'.

Groupon deals are often found cheaper on ebay and Amazon.

I wonder how people who buy goods in bricks and mortar shops survive.

In the UK we have a more advanced system of home delivery groceries than in the USA. The big supermarkets deliver to our doors for often as little as £1.

It is the way of the future.

The downsides are also there.

Price comparison sites are at best misleading. I have never found an item on one that I couldn't get at a better price elsewhere.

Reduced prices mean absolutely nothing it's the price including delivery that matters not what percentage one has 'saved'.

Google is completely useless for shopping and has been for a good few years.

I recently bought a specialist wood filler gel at the manufacturer's retail website at £11 full price. On one of the sites it was £24 reduced from £36 on offer.

If buying from a foreign supplier the duty free limit is only £15 after that there are taxes and clearance fees. In the UK I have been told that only one in four containers of post is checked and most passes of the Chinese usual 'Gift value $0.50' or similar but every so often we end up paying more than we would for a gold plated UK version.....

Caveat Emptor rules, but it's all good fun!

Posted by:

06 Nov 2017

I began online shopping in earnest when I broke my shoulder and discovered how wonderful it was to have heavy things like dog food delivered to my door. Now that I'm retired, the main criteria for online buying v. shopping are price, weight of the product (which affects my being able to wrangke it into my home) and product availability.

I price check among several online retailers until I'm sure I've found the best deal. I always read reviews and have gotten fairly adept at spotting the fakes and overlooking those reviewers who are too dumb to live.

Posted by:

Warren Ngo
06 Nov 2017

Hi Bob, here's my take on a very niche market for the elctronics hobbyist. Most electronic supply houses in the U.S. and Canada do not really cater to the electronic hobbyist. So if one doesn't need mil spec., I've found that for certain components like I.C's., connectors, transistors, eBay from China or Asia can't be beat. For example, 100 type 2N222 transistors for 99 cents and shipping is free. (Don't buy rechargeable batteries though, I was burned on that item)

Posted by:

06 Nov 2017

Don't forget in-store discounts. I'm a veteran, many stores have a veterans (or other group) discount. As an example Home Depot had a slightly higher price than Amazon for a generator I recently bought. But with my veterans discount they took 10% off and they helped load it. I shop online but always check locally (if I can find it) before I order.

Posted by:

Lady Fitzgerald
06 Nov 2017

I do most of my shopping online because I have problems finding things locally, despite living in a megalopolis. Brick and mortar stores have been cutting back on the variety of merchandise they carry.

Except for e-books, I stopped shopping at Amazon almost two years ago because of their lousy customer service, poor order filling (sometimes, they couldn't tell the difference between white and black), even worse packaging (such light bulbs thrown loose in a box with a few token air pillows or strip of paper), and their positively abysmal AMZL delivery company (don't even get me started on those morons!).

Amazon hasn't been the low price leader in a long time. More times than not, I could do a little research and find another vendor that undercut Amazon's prices and still have better customer service. I have a few default vendors I go to first but I usually shop around before buying once I select a product using the search engine, Start Page (Google is too snoopy and tends to be biased at times).

eBay was doing pretty good for a while but, for the past year or so, it's been overrun with arbitrageurs (mostly Chinese), Amazon Fulfilled Marketplace Vendors (they should be required to disclose that their merchandise will be filled and shipped by Amazon since it would be cheaper to order directly from Amazon), and more and more outright crooks. It's now more of a last resort vendor.

I have nothing but contempt for the practice of "showrooming". If you need to physically see an item before deciding whether you want to buy it or not, unless the markup is really outrageous (in which case, the vendor deserves to fail), it's only fair to support the vendor who provided you with the opportunity to view the item first. They have to pay for their overhead plus, if everyone "shopped" at their store but bought online, the store would go out of business quickly.

Posted by:

06 Nov 2017

WOW, I must be the ONLY person on the planet who shops on line, so I can see what's available and read reviews, then BUYS at the brick and mortar.

I like the idea of supporting the local economy and when I need service or advice the guys right down the road; and let's not EVEN mention the hassle of having to return something you bought on line!!

Posted by:

06 Nov 2017

I would advise people to avoid eBay like the plague now.
As a member with a 100% feedback rating for over 10 years, I watched it become a behemoth that cares little about any scammers and unscrupulous buyers and sellers, despite what they want you to believe.
Over the years, I've sold and purchased over 600 items, some costing mere dollars and others costing thousands, but over the last year, I've seen 3 of my last 4 transactions go belly up. No more for me. I shop Amazon now.
You've been warned.

Posted by:

Jay R
06 Nov 2017

I buy very little on line with the exception of knives. When I receive an email telling me how much buying a knife can save me, I am immediately suspicious. But. If I like it, I will look at 3,4,5, or more other sites. Often, I can find the same item at about the same price.The attraction frequently drops in a precipitous fashion. When it actually is a great deal, I often succumb to lure of purchasing. I have even had one on line retailer price match another one when there was over a $20 price differential.(I called them on the phone. They actually went to the other website to see if I was a honest person.) It makes me wonder what the retailer's purchase price is.----I have become more and more leery about eBay and Amazon because of the possibility of fraudulent merchandise. I did buy a couple of DeWalt 20V Li ion batteries from Amazon over 6 months ago because the price was good. They still work well and they looked authentic when I examined them.

As always, I'm a big fan (not an A/C) of what you do, Bob. Thank you!

Posted by:

Danny G
07 Nov 2017

Google 'Amazon vs. Costco' for great comparison.

Also I find Amazon prices are good, but sometines Bed bath and beyond can be almost and sometimes better that Amazon with their paper coupons that they accept even if expired. You can order online and pay in store with the coupons. Buy you do have to pay sales tax.

Posted by:

Daniel Wiener
07 Nov 2017

I buy thousands of dollars worth of stuff each year from Amazon and Costco, and lesser amounts at Wal-Mart and eBay. The reviews on Amazon are especially important for filtering out the crap and finding the best quality/price combination on products. Here are several tips:

1. Many if not most brick and mortar stores will match prices on identical items. Several times I've found the exact item I wanted at an excellent price on Amazon, printed out the page, and then gone to Best Buy or Lowe's or Bed Bath & Beyond to buy it at that price (rather than their higher price) based on the price match. It's the opposite of "showrooming".

2. I use CamelCamelCamel.com to track the prices on items I periodically buy from Amazon. Prices fluctuate substantially, and sites like these allow you to catch sudden (and temporary) drops with email notifications.

3. Last year I used H&R Block's Tax Cut program to prepare my taxes and file them with the IRS on line. Before the end of 2016 I made sure that I had sufficient withholding and extra tax payments to generate a refund of a couple of thousand dollars, and this year I'm doing the same. Normally it's a lousy idea to be getting a refund and thereby give the government free use of your money during the year. But H&R Block has a deal where you can take your refund in the form of an Amazon gift card, and get a 10% bonus.

Posted by:

07 Nov 2017

There was a time a couple years a go online shopping was were you went to get the deals....
Not any more, And little by little it will be the
down fall of it, And it's becoming a place were
venders are shipping there junk defected items
seems like 75% of my things I order on line has to go back, Or it's taking so long to ship it.
It's becoming not worth it fast......

Posted by:

08 Nov 2017

Shopping...FOR ME...First I go to ConsumerSearch.com for reviews...

Second I go to Amazon and let Firefox add-on "Invisible Hand" find me the "BEST" price on the internet...

Posted by:

14 Nov 2017

I don't think there is a single retailer that has consistently the lowest price. And I rarely base a shopping decision on website product "reviews" unless there are a large number of them. It's important to shop around. The best price may be at a store you rarely or never visit.

For example with musical instruments Reverb has pretty much replaced eBay for the place to go. Better policies and more respect for the customer. It probably helps that it only deals with music gear.

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