Tammy writes in:
How does a person “shop around online”? I understand that you can buy things on Amazon and other web sites. Do you just go to different sites and look at prices and see what is cheapest? What about online rip off sites? How do you shop around online for things like car insurance?
Tammy is asking a bundle of things here but they all come down to one core question: how exactly does a person “shop around” online? It’s a skill that many people have learned over the last decade or so, such that it’s often assumed that people just know how to do this, but I actually couldn’t find an article online that discussed, step by step, how to actually shop around.
For some of you, this article is going to definitely fall into the category of “personal finance 101.” Here’s the thing to remember: everyone needs a “101” article sometimes on a particular area. In just the last week, I’ve read incredibly “newbie friendly” articles and watched videos on a few basic things that probably seem comical to most people; I’m glad that such “101” articles exist even if I don’t happen to need them and I just move on to other articles if I don’t need the ideas in those basic.
So, let’s start off with the very basics. The idea of “shopping around online” simply means that you go to a number of online retailers – or to the websites of stores in your area – and find the price on a particular good you’re looking for. Then, you use that information to make the best buying decision. That doesn’t always mean going for the absolute lowest price, mind you.
There are a number of different variations on this, depending on what kind of shopping you’re doing and how you intend to use that information. So, let’s start with some basic examples.
Shopping Around Online for Basic Supplies
These are items that people typically pick up in local stores, but more and more people are gradually moving to the internet to buy such items. These are items that you’d typically find in a “super” department store – one that combines a grocery store with the typical goods you’d find in a department store like Target or Wal-Mart.
Typically, this process starts with the customer having some specific item in mind. Maybe you’re going to the store to buy socks, or maybe you need a new blender, or perhaps you need some resealable containers. I’m going to assume you already have a sense of the brand that you intend to buy, perhaps because it’s something you’ve already bought before or because you’re following a recommendation from Consumer Reports.
You have this fairly standard type of item and you know what you want. How do you shop around online for it?
The best approach is to simply visit a handful of well-regarded online stores, as well as the websites of department and discount stores in your area. For example, if I’m shopping around for a blender or for resealable containers, I would probably check out Target.com, Walmart.com, Amazon.com, SamsClub.com, and Costco.com. These are the websites of brick-and-mortar retailers near me, along with Amazon, which provides a great general price check for most items.
If your item is in a bit of a specific niche, you might want to look at some online specialty shops related to that item. For example, if you’re looking at office supplies, you’d probably want to check Staples.com and OfficeDepot.com. If you’re looking at electronics, you may want to look at BestBuy.com or NewEgg.com. For clothing, Macys.com might be worth a look. For hardware items, you may want to check out HomeDepot.com or Lowes.com.
In short, for starters, you should simply look at the websites of whatever retailers you might visit in the course of buying the item, along with Amazon. That simple step alone allows you to check out most of the retailers in your area.
When you go to each site, all you need to do is look up the item and see what the price is, but you don’t want to necessarily buy immediately. If you’re already checking out one retailer, it’s usually worthwhile to check out several before you make any decisions. I typically check out at least four or five different sites for every purchase over ten or fifteen dollars.
There are tools that do some of this work for you and allow you to search a bunch of sites at once for prices. PriceGrabber.com seems to be the best option amongst these, though Google Shopping also seems to work pretty well. These tend to pull in prices from a bunch of different retailers at once, though the exact retailers tends to vary a lot from item to item. I do use these, but I usually check the “big” retailers myself because they’re sometimes missing from these “price aggregators.”
Another thing I look for is each retailer’s price matching policy. You often have to dig around for these policies, and some sites and retailers don’t have price matching at all. The easiest way to find their policy is to simply use Google and search for RETAILER price matching where RETAILER is obviously the retailer of your choice. So, you might search for Walmart price matching, which will quickly take you to Walmart.com’s price matching policy. This works pretty well for almost every online retailer.
One more tip: I don’t always go with the lowest price. There are some advantages to actually buying items at a brick-and-mortar retailer. For one, you can visually inspect the item before you buy it so that you don’t wind up with a beat-up item delivered to your house, which does happen if you order from an online retailer to have it shipped to you. For another, returning items in-store is usually easier than returning by mail. Yet another advantage is time – when you’re searching the site of a retailer, you can often check to see if the item is in stock at a local store and then go pick it up immediately, sometimes with the item already being held for you at customer service. With online shipping, you have to wait for a while.
On the other hand, you’ll often find that online prices are lower than those in the store, so if you can get free or extremely cheap shipping, the total price you pay online may be less, and that’s a better option if you don’t need it immediately.
My usual strategy is to find the best price online and then try to match it in-store with a store that has a great price-matching policy. Of course, this is only true if the specific item I want is available at a nearby store, which does cut down on the selection a bit – while a Super Target may carry a lot of things, they don’t carry everything.
Doesn’t this take time? It sure does, but once you have all of these sites bookmarked and know what the price matching policy is at many of them, you can usually find the best price on the item you want from a reputable retailer in just a minute or two. I usually save enough on items above $10 to make the process worth it, especially on items I don’t need immediately.
What about local retailers with minimal online presence? Honestly, I usually check them first. For example, there’s a nice little hardware store about a mile from my house that I visit first when I have a hardware need, and unless the item registers in my head as being overly expensive, I’ll just buy the item locally. If I do feel the need to price check, I’ll do it on my phone while shopping in the store, with anything close in price going in favor of the local retailer. Local independent retailers add a lot of value to the shopping experience, especially since many of the people working there tend to actually care about the products being sold and are glad to help. The service of many local stores is worth a small premium to me, as is the sense that a healthy portion of the money I spend there stays local.
Shopping Around Online for Hobby Supplies or Niche Supplies
Things get a bit more challenging when you move onto physical items that aren’t typically find at big box retailers. When you’re looking for specific niche items or you need specific hobby supplies, part of the challenge comes from finding retailers that specialize in those niches.
So, your first step is to find trusted retailers that operate within your niche. You can start with Amazon here, as they tend to offer quite a few supplies in a lot of different niches and hobbies, but you need more than that to actually “shop around online.”
My preferred method of doing this is to find online communities devoted to a particular hobby or niche and look for the trusted retailers in that community.
For example, I have a passing interest in good pens, so outside of Amazon, some of the trusted retailers include Jet Pens, Goulet Pens, and Van Ness Pens (these are ones I’ve happily used in the past, which is why I chose them out of a longer list of ones I could have mentioned). I found these retailers by looking for online pen, pencil, and stationery communities and finding out what their recommended retailers were.
Another example, also drawn from my hobbies, comes from my interest in board games. I can quickly identify retailers like Coolstuffinc, Funagain Games, and Miniature Market that do a great job of directly serving the tabletop gaming community simply by poking around board gaming communities online.
As with the more mainstream retailers in the previous section, I bookmark all of these in my web browser, but in this instance I put all of those bookmarks in a single bookmark folder. Here, I might mark the folder as “pen retailers” or “board game retailers” and include links to the above ones and a few more. That way, I can open all of their pages quickly and search for the specific item I’m looking for.
That way, when I do decide to buy, say, some new ink cartridges for a pen when it’s running low or a new board game I might be interested in, I can quickly check a bunch of trusted retailers for the best price on those cartridges or that game.
What about loyalty programs? Many retailers in niche markets (like stationery and pens, for instance) tend to offer pretty strong loyalty programs. As opposed to more mainstream retailers, after all, they’re chasing after a smaller number of customers and loyalty tends to be even more valuable. I find that many niche retailers have very strong loyalty programs, which you do need to incorporate into your calculations when shopping around online. Thus, it makes sense to bring up loyalty programs here.
In general, when I realize that I’m going to be buying regularly within a niche, I tend to fixate on one retailer after trying a few, then consider purchases from that retailer to have a bit of an additional discount that isn’t reflected in the compared prices. Thus, if prices are close at all, I favor a particular retailer with a good loyalty program that I have experience with. This is similar to my logic of buying local from above.
In other words, loyalty programs do count for a bit and should nudge you toward a particular retailer when it’s close, and you’re typically better off just maximizing a single loyalty program.
Shopping Around Online for Services
What about when you’re shopping around for services, like insurance or banking? What’s different when you’re shopping around for those things?
Perhaps even more than with the niche retailers, “shopping around” for services like these centers around identifying the actual places to compare. For insurance, for example, identifying a number of insurance companies to compare and get quotes from is perhaps the most important step in the process.
For this, I generally turn to trusted independent reviewers such as Consumer Reports and Morningstar in order to compare service providers. For specific services where I’m comparing numbers, I turn to comparative online listings, like The Simple Dollar’s own best bank listings.
The goal with such a listing isn’t to just have that reviewer tell me which service to use, but to figure out a handful that are generally considered to offer quality products. For example, I might deduce from The Simple Dollar’s comparisons and a few other tools that Ally and Discover Bank are really good options that are consistently near the top of comparative reviews. Never, ever wholly trust one source’s viewpoint – get a bunch of options by looking at a bunch of viewpoints and collecting the ones that are near the top in all of those viewpoints.
Once you have those options, again, go through and check into the offerings of each service provider, one at a time. Get a quote from each one and compare those quotes, then go for the one that offers the best service for the buck. If you get similar offers, trust the comparative reviews, but you’re generally in good shape choosing the best priced service from among that handful of top service providers.
This process takes a bit longer than the others, but you’re generally doing this only once in a great while for each type of service that you use. Once you start using a service, you’re likely to stick with it until there’s a compelling reason to leave that service, at which point finding and comparing service providers should be done again from scratch.
Shopping around online is something that should simply be a part of everyone’s buying habits these days. The availability of the internet makes it easy to quickly compare prices amongst many stores and find the best bargain on the items you’re buying. Even if you choose not to shop at a certain store, knowing what prices they’re offering and taking advantage of such things as price matching can save you money elsewhere.
Right now, it’s worth your while to identify and bookmark some good general retailers for many of your everyday purchases – things you might buy at Target or Walmart – as well as some specific retailers for any niche areas that you might shop. This is a great first step you can take immediately to prepare yourself for convenient online comparison shopping.