It's not a secret that you can find the same item -- or very similar items -- for different prices at different retailers. For example, you might find a book on the shelf at your local bookstore for $20 and see it listed on Amazon for $10. You might see a shirt at a high-end clothing retailer for a high price, then see the same shirt at T.J. Maxx or Marshalls for a much lower price. It's a phenomenon that nearly all of us have experienced at one time or another.
Many people take advantage of the price discrepancies and save money by comparison shopping. They'll see something they want in a store, and then wait to buy it after checking online shops or another store or two.
However, there's stronger strategy you can apply that affects the price of almost everything you buy. I call it the "shopping hierarchy" strategy.
It's a simple strategy: Whenever you go to a store to buy an item, always start at the store with the lowest prices. If you do this every single time, you're bound to pay low prices for everything you buy.
For example, when you're buying groceries, you might want to start shopping at Aldi or Fareway to take care of most of your grocery list, then move up to a somewhat higher priced chain such as Hy-Vee or Publix. Leave higher-end stores like Whole Foods for the food items you didn't find elsewhere.
What about clothes? Start shopping at Goodwill, consignment or other secondhand stores for clothes that you might need, then move up from there. For example, when my children need clothes, I'll shop first at a secondhand store like Stuff Etc. and then fill in the gaps with a store like Target and then only fill in any remaining gaps with other retailers.
What about electronics? I always start with a discount electronics retailer like Newegg.com and then move to other retailers from there.
There are a few simple rules I use to make sure I'm always happy with what I take home.
1. If you don't like a particular version of an item, don't buy it. If I've tried the bananas from Aldi and I didn't like them, I won't buy them from Aldi again. I'll buy from another grocer. If the pizza at Fareway has an ingredient list that doesn't make me happy, I won't buy that pizza any more. If I don't like the shirts at Stuff Etc., I'll move on to another clothing retailer. I'm looking for the lowest price on items that actually meet my needs.
The point of this strategy is to make sure I always look at the low-cost retailers, not always buy from them. If I go in the low-cost retailers with my eyes wide open, I can usually check off at least some items from my shopping list.
2. Always be willing to try the low-end version of an item. Sure, you might find out that it doesn't meet your needs, but if you do, it's not a big deal since you didn't invest a lot of money in it. You'll now know that you should wait for other retailers to offer that item, or you should choose a different version of that item at the cheap retailer.
For example, you might try the low-end garbage bags, only to find out that they really don't do the job for you. A garbage bag that breaks isn't worth anything, even if it's super cheap. Next time, buy better garbage bags if they're not suiting your needs.
3. Don't be snobbish about retailers. No one knows -- or cares -- that you bought your shirts or pants from a secondhand shop. No one knows -- or cares -- that you buy most of your groceries from a cheap grocery store. No one knows -- or cares -- that you don't have a bunch of name brands in your cupboards or in your closet.
4. Don't panic over little mistakes, like buying from the low-end retailer without the lowest prices. It's not always a guarantee that the low-end retailer has the least expensive items. Sometimes you'll find a few items where other stores have lower prices, or you might miss out on a sale.
If that happens, don't worry about it. There are always sales or items that undermine the shopping hierarchy on one or two items. However, the shopping hierarchy wins when it comes to the grocery and household items you buy every week or the clothes your children need. When you save on 95 percent of your purchases, the other 5 percent aren't worth stressing about.
A smart shopping hierarchy will save you money on almost every item you purchase in a given year. Even if it's just a dollar here or two dollars there, that adds up surprisingly quickly, and can turn into thousands of dollars saved per year.
Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.
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