Ways to Save Money
By Steve Gillman
To save money it helps to know how the market works and how
to make it work for you. This is certainly true in the case of
product life cycles. Understand this cycle, and know where a
product is in it, and you can save a lot of money.
Most products have a somewhat predictable life cycle. There
is the birth of the product, the popularization, and then the
common distribution. Once the distribution of a product is common,
it is often much cheaper than when it was new. We have all seen
this with VCRs, DVD players, futon couches and other things.
How do you take advantage of this to save money? The primary
way to save is to wait if you can. The price of a product that
is in the "mature" phase of its cycle can be as much
as 80% less than when it is new. Consider that the quality and
functionality of a $59 Walmart DVD player is about the same as
that of one that cost $600 when they first came out. That's a
90% drop in price.
Fortunately, life cycles seem to be getting shorter, meaning
you might not have to wait as long as in the past for prices
to bottom out. With some new electronics, waiting a year can
mean paying half as much. If you can afford to wait, watch for
the time when most people who want the product have it. This
is probably when manufacturing costs have hit their low and competition
is at its greatest - in other words, when the price will be at
To really take advantage of the life cycle of a product, wait
until it is a mature product and a new version is being
introduced. With some products, you may need to the new version
for functionality, but with others the change is more one of
style. In any case, the old version often gets really cheap as
it is cleared out. For example, if a new style of running shoe
comes along, the existing one may get really cheap, even though
it does essentially the same thing.
Pricing Cycles and Secret Codes
Some retailers have their own pricing codes that can be deciphered.
"Price hackers," are those who try to break the codes
and determine where things are in the pricing cycle. For example,
some of them claim that when a price ends in "8" ($3.88,
$7.28) at Target stores, the product price is beginning its descent.
If it ends in "4" it is as low as it will go.
If you notice clues to these codes, you might figure them
out. Of course, if the store you are in doesn't use such price
codes, you'll be doing a lot of investigating for nothing. A
simpler way to determine what the prices mean is to ask a friendly
employee, who may be happy to help you and show off his or her
insider-knowledge. In fact, learning how to identify and talk
to friendly employees may be one of the better ways to spend
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