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Thursday 5 March 2009

How to save money on online orders: diginomics






£££ €€€ $$$ !!!

“Just say no!”

Less cryptically, there’s a simple tip embodied in that statement which may help you save money when you order over the internet. And certainly in these *credit crunch times of economic recession, so many things are so expensive that every penny or cent (or euro!) can make a difference.

It’s a truism that sellers want to charge you the maximum they can - so they’ll try to make you pay the most that you’re willing to pay. It’s simple market economics, supply and demand.

Which, taken to extremes, means that suppliers will charge different customers a different price for the exact same product (or charge the same customer a different price at different times) - if they can figure out that the customer is willing to pay more for it.

And, with the power of the Web / internet, they can figure that out, because online they can compute things very quickly, live, in real time.

This differential pricing is just an application of diginomics, indeed a very sensible application as far as the vendor is concerned, because it helps them make the most money that they can - and, after all, it’s their profits, their bottom line, that they really care the most about.

So, what can we poor consumers do? Why, figure them out, and use their tactics to our own advantage, of course!

Below is a suggested counter-strategy for consumers when shopping over the Net.

Now note that this doesn’t work with all (or indeed many) websites, but only with the ones who apply differential pricing to different customers or at different stages of the shopping / ordering process, it really can make a difference. An example of a site which does this is business cards site VistaPrint.

Also, note that a site could apply different types of discounts at different times, as they change their pricing strategies, so you'll need to keep trying at different times.

With those points in mind, here are the suggested steps:

  1. First, check the original prices. In the shoppingcart, at the start add everything you’re planning to buy, in the quantities you ultimately want.

  2. At the end, just before you have to enter your credit card details or confirm anything that makes your order irreversible (e.g. if you have stored credit card details on that site – not a good idea for security reasons even if it’s convenient), just tot it all up, including shipping / delivery charges. Make sure you’ve got a note of the price per item of each kind.

  3. But then don’t buy anything – instead of completing the order make sure you cancel everything, empty your basket etc. (And don’t blame me if you don’t, you have to watch it all very carefully)!

  4. Now, go back and start again. This time, make sure that, even if you want to buy several of the same item, or some other kind of multiple order (e.g. renew a domain name for 2 years instead of 1), you start out with an empty cart and then add the very minimum you can. In other words, reduce the quantity to 1 item (or 1 year, etc) even if they defaulted you to 2 or you really wanted to buy 5, and so on. And add just 1 product in the shoppingbasket to begin with.

  5. Then carry on with the ordering process, and check if at subsequent stages they come up with offers of discounts for multiple items – or discount on any other items – or free or cheaper postage costs. That kind of thing.

  6. But, just keep saying “No” to the various offers, and see whether the special offers get better and better at later stages (obviously, make sure you keep track of the price per unit of the same type of goods at each stage so that you can compare them; and if an offer goes away as you proceed, make a note of the last stage when the offer is available).

  7. And again, at the end, just before you commit yourself to the order, cancel everything and empty your cart.

  8. You may need to repeat the process but just add different quantities or different products a different stages just to see if it makes a difference to the ultimate unit price per item (or rather the whole basket of goods that you really want, in the quantities of each kind of goods that you want, including shipping costs). Just experiment, use trial & error etc, but again make sure you don't commit yourself to a purchase yet.

  9. Now, after all your tests, you can start shopping again - but this time you know exactly what offers will be made at what stage, and you can now increase the quantities in your shoppingcart at the right time, and also maybe add different “related” products to your basket if they’re offered at a better price – i.e. where, if you ordered that amount or those products at the very first stage when you added things to your basket, the item would be at a higher price. And you can finalise your order. (Do make your definitive purchase soon after your testing, because as mentioned the shopping sites do change their offers and pricing techniques from time to time, so what worked best one day to give you the best prices on one particular aggregate shopping basket may not work another day.)

And that’s it.

If you found that this tip worked for you, please leave a comment saying so, and list the names / Web addresses of theonline shopping sites it worked for!

2 comments:

no.good.at.coding said...

I can't confirm your method but I did notice (once) with GoDaddy, that if you put something in your cart but don't complete the purchase, they'll mail you the next day and try to sweeten the deal by giving you some sort of discount. And while GoDaddy discount coupons are pretty easy to find, this might be something to keep in mind (if you don't mind taking the chance of possibly losing a domain name! But if you're renewing, then it's a different story)

Improbulus said...

Good point, thanks for your comment ngac!