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Strategic Shopping 101 #3

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  • Monday, January 3
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  • aSpoonfulOsugar
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  •  Let us focus on the questions that you need to know to shop strategically.  They are:
    1.       What is the rock bottom price? 
    2.       What is the maximum price?
    3.       What is the pricing curve?
    4.       Which stores have the best bottom line –take home price for your item?
    5.       Do you have coupons for the item in question?
    6.       Is there any rebates or buying programs for this item?
    7.       What is my usage of the item during its cycle?
    What is the rock bottom price for an item? 
    The rock bottom price for an item is the lowest attainable price (not counting clearance or manager special) that I can purchase the item at.  What I am currently working on for 2011 is a log of the advertisements over the first six to eight weeks of the year so I can determine what the rock bottom prices are going to be in 2011 for the items that I purchase.  As an Accountant by training, I am putting my information into an excel spreadsheet so that I can update it routinely  ((I will post this in mid to late February and will keep it updated quarterly))…you can do the same thing with a simple notebook and paper.  A word of caution though…you have to be aware of the market that you are shopping in as the rock bottom prices can shift based upon market conditions.   What I do is I don’t purchase anything that is not rock bottom price unless I am out of inventory of it, cannot find a substitute, AND have a coupon (that is going to expire)… in other words… I have to have it at that time.   But I have tried everything to not buy it yet… the key to not getting yourself in that situation is to have a good stockpile of products that you use and to pre-plan your menus.
    What is the maximum price for an item?
    The maximum price for an item is the non-sales price.  You may ask, why you need to know this…well I use it to determine whether or not I am getting a good deal when I am buying something that is not rock bottom pricing.  I won’t purchase anything unless it is 60 to 70% of the maximum price… that way even when I am not purchasing an item at rock bottom price… I am still getting greater than ½ off.
    What is the pricing curve?
    Most products go on sale either seasonally (like fruit and vegetables) or they are on a six week to eight week cycle.  Seasonally, we will discuss in another post.  Let us focus on the cyclical nature of product pricing.  For the majority of the items that you purchase in a store, the price will fluctuate between the maximum price and the rock bottom price over a six week to eight week time period. The goal is to know what the high’s and low’s for the pricing of the items that you routinely purchase in a six to eight week time period.  Knowing the pricing curve for your standard items enables you to not only know the rock bottom price, to know the percentage of the maximum price that a sales price is, but also an estimate of when you can expect to see the rock bottom price which helps you in the decision of whether to purchase an item at non-rock bottom price and how much you need to purchase to cover your needs until you can purchase at rock bottom prices.  In some cases, if you are at the low end of the curve …you may want to change your need (ie… change what you are making that requires the item) till you can get the item at the rock bottom price. 
    Which stores have the best bottom line –take home price for your item?
    Knowing the stores coupon policy will enable you to determine if you want to purchase an item that is on sale at multiple stores.   For example… if toothpaste is on sale at Target for  $1.50 and on sale at Krogers for $1.00  and you have a manufacturers coupon for 75¢ where would you purchase it at?  The quick answer is Krogers as you would get it for 25¢ instead of 75¢ at Target…however, if you know that Target has their own coupon and go to Targets website and find a Target coupon for $1.00 on this toothpaste.  Then where would you purchase it at?  Still the same answer for now you would use the Target coupon and still it would be 50¢ at Target versus 25¢ at Krogers.  BUT if you know the Target coupon policy then you would know that Target coupons can be used at the same time as the Manufacturers coupon  (this is called stacking)…now where would you buy it at?  Target for you would get it for free ((and some stores even would apply the 25¢ against your total purchases – that is what is called a “money maker”…I don’t believe Target does that though)).  Therefore knowing the various stores coupon policies is essential to shopping strategically and it is essential to couponing successfully.
    Do you have coupons for the item in question?
    Coupons are essential to strategic shopping.  Buying an item without a coupon when a coupon is available is essentially throwing your money away.  This is to be avoided if at all possible.  A strategic shopper will change their need for an item prior to buying it without a coupon if at all possible.  Sometimes that isn’t feasible…like for example…milk.  My son is at the age where he drinks a lot of milk daily…milk is an item that rarely has a coupon so how do I purchase it strategically?  I look for milk on sale and freeze it.  My goal is to cover our milk consumption needs until it goes back on sale.  I will go further into couponing on my posts labeled “coupon 101”.

    Is there any rebates or buying programs for this item?
    Keeping knowledgeable about rebates or buying programs has a strong impact on your final impact to the family income usage.  Rebates are where the manufacturer or store refunds back to you a portion of the item price based upon either the dollar amount purchased during a time period or quantity purchased during a time period.  A buying program for an item is one where the Manufacturer offers either additional access to coupons or other products as a “reward” for purchasing the item.  Taking advantage of rebates and buying programs is like the “cherry” on top of the strategic shopping sundae.  First in the case of a rebate, you buy the item on sale and with coupons then you get paid back a portion of the pre-coupon price …this can be a real money maker (see my example below).  And in the case of a buying program, can have long term benefits to your family income (also see example below) as a buying program can get your name and address on a manufacturer’s mailing list for coupons and special offers.
    An example of this impact is a Proctor & Gamble had two different programs running through December last year that I just participated in with my toiletries purchases.  The rebate program was receive a rebate of $20 for a total purchase of select P&G items of $50 whereas the buying program was spend $50 on P&G items and get on the P&G mailing list for the next coupon program which offered over $110 worth of coupons. At that same time, P&G had a coupon that offered a free Oil of Olay body wash with the purchase of Secret deodorant.  And a coupon for $1 off on Secret deodorant…this coupon did not limit the deodorant purchase to “not” trial size.  So I purchased trial size Secret deodorants for $1.29 used the $1 off coupon on the Secret deodorant and the Get Free coupon on the Oil of Olay body wash (price is $8)…my net out of pocket was 29¢ plus tax.  But for the rebate program and the buying program’s purpose I purchased $9.29 worth of product.  Doing this transaction five times plus buying one shampoo with a coupon (net price 49¢) resulted in an out of pocket of $1.94 plus tax yet enabled me to file for a rebate of $20.  This is a money maker of $18.06.  If I had the fore thought I could have used the items for both programs by simply asking for a duplicate receipt…Now I did not have the fore thought to request duplicate receipts.  Take my word for it, in the future I will always ask for duplicate receipts.  But I did have ten of these coupon series so I am ending up with $18 in cash, $100 in product, and $110 worth of coupons to use on future items.  THAT is what I call strategic shopping and a money maker…plus it is all items that I use…I won’t buy deodorant in 2011 but it doesn’t expire and I have all ready given away quite a bit to a local charity.  Next time P&G offers such a deal… I will do shampoo or toothpaste or toilet paper… also items that if I have more than my six week usage, I don’t mind.
    One note… No!  I am not a hoarder …I do not buy anything that I don’t have either (a) a standard six week usage quantity, (b) a set charity that I give to and that has zero impact to my family budget, or (c) the positive dollar impact to my family make it worth my while to stock up greater than my standard usage.
    What is my usage of the item during its cycle?
    The total quantity that you use during a cycle of six or eight weeks can be difficult to determine in the beginning.  What I did was look at my weekly usage on toiletries and tried to find old receipts to determine if my “guestimate” was accurate or not. I think looked at how much I had on hand before I bought anything.  I was amazed by how much I had in the house that I did not even realize was there…too busy buying.   It was strange to see where the amount that I used did not match what I bought in the past. 
    On grocery items, I planned out my weekly menus utilizing the sales papers and purchased the items I needed.  Then on standard inventory items like tomato sauce and tomato paste if they were on sale at rock bottom price and I had a coupon, I bought whatever quantity I had coupons for.  In this way, I did buy more than the six to eight week cycle but it enabled me to reach into the pantry without having to run to the store for “emergency” purchases like I used to have to do all the time.  Emergency purchases are always the costliest shopping trips because I usually go without a list and end up buying one or two bags worth of impulse buys that I just had to have.  Shopping without a list is just plain throwing your money away in my case.

    Strategic Shopping 101 #1  What is Strategic Shopping?
    Strategic Shopping 101 #2  How to shop strategically?

    Strategic Shopping 101 #4 How to shop strategically?
    Strategic Shopping 101 #5 Why shop strategically?


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