Over the past couple of weeks I have felt like much of my advice on saving money has been to tell you to wait, that prices will drop soon. Five weeks ago I told you to have patience when it comes to buying all of Junior’s back to school items. Many of which would drop in price in early September (although I was at Target last Wednesday and there were great sales already). Two weeks ago I told you to hold off on booking a vacation; that most vacation destinations drop their rental and hotel rates starting in September.
So when I sat down today to write this week’s column I realized that my recent advice about waiting to buy at the right time might be a beneficial in a more general sense. Patience is perhaps the most underrated savings tool we have at our disposal. When a new product hits stores, the price is at its peak, selling at the manufacturer’s suggested retail price (MSRP). Then after a bit of time, when the excitement begins to wear off and sales start to lag, a store may drop the product’s price.
Finding that sweet spot when stores run sales or manufacturer’s cut prices to boost sales is no easy task. There is no secret formula that stores or manufacturers use when deciding to drop the price of a product. It can be done after only a couple of months or take until the next generation of the product is released.
I certainly don’t want to pay full price for anything I don’t have too. There are a few products I’ve figured out how long I have to wait to buy it on sale for.
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Long time readers know I have quite a passion for reading. I’ve talked about my love affair with my iPad in the past. I am constantly looking for new books to read. But I hate when I find a newly published book and its $14.99 or higher. When a new book is released it’s only available in hardcover and they charge a premium for it. I try to wait for the paperback version to come out, but that can take up to a year to hit the market after its initial release. Thankfully the timeline between the hardcover and paperback release has been getting shorter; sometimes I only have to wait six months. Waiting can save you as much as 50 percent off the cover price! E-books tend to follow the lead of their print counterparts. The prices for E-books drop when the paperback comes out.
You don’t have to be quite as patient to get discounted pricing on kid’s video games. If you buy new games on Amazon, prices drop after only a few weeks. The trick is to wait till the second price drop. The first time they drop the price it’s only a few lousy percentage points, but the second one will save you 10 percent or more of the original MSRP. You can also get discounted games only a few weeks after their initial release at second hand retailers like GameStop.
Prices for new DVD releases drop in a similar time frame to video games. It takes just a few weeks of patience before you can get a deal on new DVD’s, with one notable exception. The price of DVD’s actually INCREASES slightly in the days after it is released. My guess is that retailers use DVD’s as loss leaders to get customers into their stores. Then after the weekend and the initial rush they raise the price to the original MSRP. Wait two to four weeks after the initial release to get a good price on a new DVD.
A lot of people are buying clothing this month for back-to-school. Retailers try to fool us consumers into thinking they are discounting jeans, jackets, shirts and shoes with advertisements and false sales. The truth is no clothing is on sale right now. If a store is claiming that they have dropped the price of any piece of fall clothing they are either outright lying or using trickery like raising the MSRP to sell below that number. To get a good deal on fall clothing you’ve got to wait a bit longer. Clothing is very much a seasonal item and therefore seasonal pricing applies. To get really good deals on clothing you’ll need to wait about three or four months after it appears in stores. There will be small sales here and there in between that time but the truly significant price drops come in the months after it hits the shelves.
For example, you see sandals and lighter weight t-shirts being stocked in March. So you can expect the price for these summer staples to slide starting in July, continuing on till they hit the clearance racks in mid-August. You should note that this pricing strategy doesn’t apply to high-end clothing. The manufacturers of these items usually don’t discount their wares at all so as to protect their brand image.
If you are in the market for a new TV this year, you are going to need a lot of patience to get a good deal. You won’t see the cheapest prices again till next spring. March is when retailers drop the prices of last year’s models to make room for next year’s models which debuted at the Consumer Electronics Show held in January each year.
If you are waiting for a specific model to arrive and price is not your most important concern, wait till about a month after it debuts, you might see a slight drop in price at some retailers. Never ever purchase a TV in February. Blame football fanatics for this one. Retailers roll out splashy ads and claim they are selling TV’s at a discount during the month of February. But it’s all for show to get people to purchase new TV’s for the biggest sports event of the year, the Super Bowl.
Probably the easiest item to predict a price cut for is cell phones, specifically smartphones. Sales for these cell phones have fallen into a regular pattern over the past few years. iPhones always start out at the same price ($199) with a new two year contract and remain that price until the next version is announced. A new iPhone is released every year so when the announcement comes, the price usually drops to $100 with a new a new two year contract.
Android phones are just as predictable, but drop in price WAY sooner. There are a lot more choices in the Android market. New Android smartphones hit the market every other month or so which causes retailers to drop prices much quicker. Most Android phones will get marked down by 30 percent after a month on the market. If you’re really lucky, the price of the phone you want may get a markdown in only 10 days after it hits stores.
There are three times a year you can get a good deal on a new computer or laptop. The first is in late January/ early February. This is because new models have just been announced at the Consumer Electronics Show in early January. Next year’s show is being held in Las Vegas, January 8-11th. Immediately following those dates you can expect all 2012 models to get a sale sign attached to them.
The other time of year you can get a good deal on a new computer or laptop is just before back to school season. In May and June kids are graduating from school and there is very little demand for new computers at that time. Retailers typically hold sales these months to help boost sales.
At this point you are probably a little pissed because you’ve obviously missed the first two times of the year to get a good deal on a new computer or laptop. If you absolutely have to get a new computer this year, hold off until after Black Friday in November. Electronics are important sales items for retailers during the holiday season. There will be door busters and sales galore on these items leading up to Christmas. The deals won’t be quite as good as other times in the year, but still cheaper than paying full price.
Finding cheap entertainment is all about knowing where to look, but it’s also about patience. If you can, hold out and buy your tickets second hand. Generally, prices for sporting events and concerts go up until right before the show. To save the most money wait until the last minute and buy tickets the day before or day of the event. Just make sure you have enough time to meet up with the person selling them before the event. You can also use seatgeek.com to predict when prices will drop. Seatgeek is a free website that analyzes ticket sales for events and makes predictions as to the best time to buy in the resale market.
If you want to go to an upcoming concert that you are sure will sell out, then second hand sellers won’t be the cheapest way to get tickets. The only way to save money in this instance is to try to order your tickets directly from the venue hosting the show. This will cut out the ridiculous fees and service charges Ticketmaster imposes on consumers who order online. Most larger-sized music venues have a box office you can purchase tickets from directly.
Predicting price drops on items is best left to the professionals. A lot of my knowledge about this topic comes from using two websites. Camelcamelcamel.com provides free Amazon.com price drop alerts along with price history charts. And Decide.com, a site that charts pricing trends and advises consumers when to buy and when to wait to get a good deal on thousands of items. Check both out for information on other items you are interested in purchasing right now.
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Keeping Money in Your Pocket,