The Information Magazine

 Photo by Gexydaf

To prepare for the onset of winter, I decided to get my boots resoled and reheeled. I have vowed not to buy a new pair of boots this year as the ones I have - 3 pairs in all - are still in good condition despite their worn off soles and heels. 

So off I went to the nearest suburb which is bustling with activity. There are two malls in the suburb – one with just one shoe repair service which I found out later.  Let’s call the shop ‘Store A’ which is a private shoe repair store with a few outlets in Australia. I wasn’t happy with the overall price offered to me so I left and scoped out for another outlet in the hope of getting a better price. So I went to the second mall that had two shops offering shoe repair services.

Here was where my discretion and judgment came into play. One was an independent shoe repair shop (Let’s call it ‘Store B’) and the other a franchise outlet (Let’s call it ‘Store C’). Common sense would take me to the latter as the service would be cheaper.  And true enough, the service to get one pair of boots reheeled and resoled and another 2 to be reheeled in Store C was way much cheaper than that offered at the independent store Store B (by a whopping $100). In comparison to Store A at the first mall, the service was $80 cheaper at Store C.   

So I walked out of Store C happily having gotten a good deal after doing some comparison shopping. I rationalised the price economics of the three stores and here are my findings:

1.              Prices at franchise stores are cheaper than that in independent ones

·         Franchise stores have bigger buying power for marketing and advertising and therefore a bigger pool of customers. 

·         Franchise stores have systems put in place and brand recognition of franchise stores converts first time customers into loyalists.

·         Prices offered by franchise stores are USUALLY set and even a difference in price offered in locations with marked socio-economic status is slight.

2.                   Prices at established and highly saturated franchise outlets are cheaper than the ones at private store with few branches

·         Prices at private stores are not fixed so tradesmen can mark up prices as and when they see fit depending on the time of day, shoe type and season.  

·         Private stores have smaller buying power for marketing and advertising depending on funds hence a smaller pool of customers than franchise stores. 

·         Private stores also mark up their prices if there are a few or no competitors within the same premises.  Store A is the sole shoe repair store at the mall.

The above price economics holds true of franchise stores offering other services such as food, cleaning and alteration. Their marketing and advertising power penetrates the very core of the consumerist society that many of us are drawn to such franchises again and again. Brand recognition indeed holds supremacy in the consciousness of consumers. However, when it comes to uniqueness, exceptional quality and superiority of craftsmanship, the independent stand-alone store may be a winner as it has to stand out amongst their competitors.       

Picture courtesy of guardian.co.uk

Thought you’d grabbed a good deal for your pair of topaz ear rings or silver hand cuffs at your local store? You’d be shocked to find a similar item elsewhere for a fraction of the price you bought yours for. Shocking it is but true. In the retail game, the least middle men are involved in the selling process the better. In most cases, the items are manufactured at the factory in a particular developing country for a cheap price. The items are then sold in bulk to suppliers at a price slightly higher price. Suppliers then sell them to retailers at an even higher price. If these items are bought and then resold to another retailer or buyer the price is marked up even further. Get the picture?

1.                  Wholesalers vs retailers

Items produced at the source are the cheapest. Buying items wholesale are even cheaper as they price is discounted. In short, mass produced items are cheap. The clothes you buy at Country Road or bag you bought at Coach cost so little to produce. In actual fact, the $150 price tag has been marked up to 80-90% its cost of production or cost sold by suppliers. Another shocking truth is that I found out first hand from online research is that jewellery items sold at group buying sites cost a few dollars at wholesale factories. The ‘shambala’ bracelet sold at well-known group buying sites costs a mere $3 wholesale. If you pay $29 for it, imagine by how much it has been marked up by retailers? In the area of fresh food, the apples you pay for your local supermarket cost 60% more than those sold at the wholesale market. Retailers will hate me for disclosing this shocking truth but it is a fact.

2.                  Online stores vs brick and mortar stores

The next time you fancy the pair of shoes or bag at your local store, think twice. Do your research online on similar products. You will be surprised that the item you have been eyeing all these while costs so much less on line. Online stores including eBay offer items whose prices are way below retail price. One of the reasons for offering cheaper prices is that online stores have the privilege of not having to pay rent. However, check shipping prices of online items and make sure the total cost of the item including shipping cost does not exceed retail price.

Picture courtesy of  catholicdadsonline.org

3.                  Franchise outlets vs individual specialty stores

Items sold at specialty stores cost way much more than at franchise outlets. For example, vegetables and fruit sold at Woolworths or Coles cost much less than at Allen’s Fruit Mart in your suburb. Furthermore, prices at franchise outlets are fixed while those at individual stores are not.

4.                  Mass produced products vs one of a kind items

Commercialised items such as bread sold at supermarkets or shirts sold at Targets are mass-produced. This drives the prices down. One-of-a kind items such as hand-crafted jewelley or artisan bread sold at Baker’s Delight or any family managed bakery costs much more.

In this globalised world, we are spoilt by a wide variety of goods made available. It’s up to us to make choices depending on how much we are willing to spend on a particular item. It helps to know that the same item you fancy or one that is within close proximity costs so much less elsewhere. We customers have the right to make choices on what and where we buy depending on our budget, shopping preference, lifestyle, values and attitude towards spending.    

If you realise that you are overspending resulting in a depletion of your savings account, it’s time to keep your spending in check. It takes a lot of discipline to stick to your financial plan. However, keeping to a financial goal is not that difficult if you start with the basics. Fortunately, there are effective strategies you can adopt to make sure you follow through on your good financial intentions.

1. Be specific

Be specific about what you want to achieve out of your financial plan. Decide how much you should save each month or how you should pay off your credit card debt. For example, specifying $200 as the sum you should save each month will help you to visualise and reach that target instead of simply saying ‘I’d like to save some money per month”. Likewise the motto ‘Cut down on grooming expenses’ sounds vague and less concrete. How about turning it to ‘Spend no more than $100 each month on grooming’? This puts your goal into perspective.

2. Avoid shopping as an extreme emotional outlet

Many of us are guilty of spending when we are stressed, bored or depressed. Yes, no one can deny that shopping gives us momentary satisfaction and happiness. This perk-me-up feeling will wane as the novelty wears off. One way to avoid shopping during times when there is an extreme emotional surge is to enjoy the simple pleasures in life such as catching up with a friend over a cup of coffee, cooking a new dish for the family or having a picnic in the park.

3. Buy time

Buying time is essential and effective strategy to avoid impulsive shopping. I shamefully admit that I tend to surf the net from time to time for luxury items like accessories. From experience, I’ve learnt that impulsive shopping will lead to regret. Once the novelty of the item wears off, I realise that I don’t really need the item as it is never or rarely used. Buying time helps to put my spending in check as it gives me time to rationalise and weigh out the pros and cons of the item I have been eyeing.

4. Reward yourself for achieving your goals

Once your saving goal for the month is reached, reward yourself with something small such as a trip to the movie or simply buying scones for afternoon tea for the family. It is essential to acknowledge your achievement, no matter how small as this will motivate you to maintain the good savings habit.

Cutting down on expenses is not an easy task. It takes a lot of discipline and will power to achieve results. As Helmut Schmidt quotes ‘Whoever wants to reach a distant goal must take small steps’. A small consistent achievement goes a long way in realising your long-term financial goal.

Thinking of making money online but wondering how to? There are numerous websites that offer opportunities for making extra income in your spare time. If you have a hobby and are good at creating things or have a skill that you can offer, there are hundreds of people out there who are looking for your services or products you can offer.

Below are some ideas on ways to make money and websites you can tap on:

1. Sell your crafts

If you are good at art and craft, there are lots of opportunities to sell handmade wares online. As a member of Etsy (etsy.com), you’ll have your own online store to showcase your items. It’s free to become an Etsy seller, but you’ll pay a fee of 20¢ to list an item with up to five photos for four months. When the item sells, you pay a 3.5 percent commission to Etsy. There’s no limit to how much you can charge, and what you earn is based on how your crafts sell.

At Jewelry Wonder (jewelrywonder.com), sellers must have at least 30 items to open a free online store. There’s no charge to sellers — no setup fee, monthly or transaction fees, or listing or hosting fees. And sellers set their own prices, so the sky’s the limit.

ArtFire (artfire.com) is the home of artists, crafters, suppliers and media creators from around the world. Sellers can choose either a basic free account that includes unlimited listings with four pictures per item plus the ability to sell directly from your blog or website, or a Pro account for $15.95 a month with 10 pictures per item plus a customizable “store” and promo features. There are no transaction fees on ArtFire, so you keep what you make. The site also offers online training in merchandising and marketing.

2.    Write, edit, proofread

3.   Design graphics and websites

Elance (elance.com) works like an online marketplace, setting up designers and computer programmers with companies that need their services. Companies post jobs and freelancers bid on them, listing their experience, portfolio and the price they will charge for the job. If your bid is chosen, you’ll pay Elance a commission of 4 to 6 percent of what you earn.

4. Tutoring

 If you have a college degree or are currently enrolled in college and think you have the skills to tutor math, science, English or social studies, tutoring online might fit you perfectly. Check out Tutor.com, where tutors work as independent contractors and earn around $10 to $14 per hour based on the subject and hours worked. Very active tutors can earn anywhere from $800 to $1,600 a month.

5. Give advice

If you have substantial content knowledge on a particular subject like health or car repair, JustAnswer (justanswer.com) is a paid question-and-answer site with a growing community of experts in the medical, legal and financial fields, as well as in other specialties like car repair and home improvement. Registered customers ask a question and then name the price they’re willing to pay (usually from $10 to $40) for an expert answer. The expert usually responds within an hour, and once the customer accepts the answer, keeps from 25 to 50 percent of what the customer pays. How much experts earn depends on how many questions they’ve had accepted by customers. Experts are vetted through a fairly grueling process, with credentials, education and background verified.

6. Give your opinion

The above are some ways in which you can make some dough on the side. Don’t expect to be a millionaire overnight but putting in consistent working hours on top of your day job with bring in extra cash that can be siphoned into your savings while making the most of your hobby or skill.

Picture by KeyAnna68

Group buying is becoming a fad in today’s consumer society. It is a great way to save money for products and services you’d normally have to pay full price for anyway such as dental treatment, hair treatment or dining out. A daily deal that is sure to grab your attention is available and you’d be spoilt for choice due to a wide variety of products, services and holiday accommodation offered at irresistible prices.

Despite the huge savings offered in group buying opportunities, one must be discerning when choosing the array of products, services and travel accommodation available. Here are 8 factors that you should look out for before jumping on a deal that takes your fancy:

1.      Need Versus Want

There may be a time when you get tempted by a deal on a product or service because of its attractively low price. That sinfully delicious artisan chocolates cost just $49, a 71% discount off its retail price. Now, you could either treat yourself to the whole chocolate package or keep it for a friend’s birthday. Now, do you really need to get that chocolate? Can you do without it? Are you sure you’re going to buy it as a gift? If you weren’t planning on buying it anyway don’t buy it for the sake of buying.

2.      Be prepared to be swarmed with emails

Once you’ve signed up with a group buying site, you’d be swarmed by emails. These deals are updated daily so that means you’ll receive daily emails notifying you of new products. This product notification is a form of advertisement on the part of the group buying company, giving its clients exposure in the hope of widening the consumer base.

3.      Block out dates for holiday accommodation

If you intend to purchase a holiday accommodation offering massive discounts at a dream location, ensure that you read the fine print. Some dates or days are blocked out such as Fridays to Saturdays and public holidays as well as the peak season. Purchase only when your leave from work is flexible.

4.        Be prepared to pay for your own airfare

That tempting holiday accommodation offer does not include airfares. Do consider your budget when you include airfares and transport transfer from the airport to your intended accommodation.

5.         The urge to jump on a deal

Since the deal for a product or service is on for only a short period of time, a decision to purchase must be made quickly.  Any impulsive shopper can be lured into this consumer trap as the deals are hard to resist and is available for only a short time. Also many shoppers can be addicted to group buying when they keep on purchasing one product or service after another as the offers seem too good to be missed.

6.       Deals of products or services are not always of the best quality

The deals advertised always claim to offer the best food, product or service. However, this may not be the case as different people would have different tastes and expectations. My advice is to always perform a Google search of the businesses offering the deals and look for the retail price offered. If you are looking up a restaurant, checking out its reviews will be helpful to get an idea of the quality of food served and its services.   

7.         Be prepared for an addiction to a certain lifestyle

Group buying can be addictive as you may think that you are making huge savings each time you jump on a deal. Bear in mind that you are NOT making any savings if you don’t intend to purchase a particular product or service on offer. If you have had a good experience with a particular service on offer, you’d want to experience another similar service or try another service. For example, you may be satisfied with a hair treatment service that cost you just $69 and would love to try out a facial treatment this time since you can be treated from top to toe using group buying for a steal. You may tend to notice that you have gradually adopted a different lifestyle from before, preferring pampering service which was considered to be a luxury prior to your group buying experience. Purchasing a product or service which you don’t really need is an additional expense that can take a toll on your wallet.

8.         Be prepared to be harassed by sales representatives

Group buying benefits consumers as well as business in the sense that the former gets what appears to be a good deal while the latter hopes to get leads that may translate to loyal patronage. With this in mind, be prepared for a sales pitch after your service. I have had the experience of trying out a deal that led to the sales representative talking me into signing up for a series of sessions for a ‘good’ deal.  This isn’t considered a good deal if paying for a series of sessions have not been on the cards anyway. It just means additional expenses. Also be prepared for upselling of related products after the service. This is just part of business tactics to make some profits and to secure loyal patronage.

Group buying is indeed a way of making huge savings if you use it to your advantage. However, be mindful of the above-mentioned pitfalls of group buying. Not all that glitter is gold. Be an informed and discerning shopper and take advantage of good deals the next time you see a deal on a product or service you’ve been looking for.