contrarian view: don't shop around

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contrarian view: don't shop around

Postby squished18 » Tue Apr 17, 2007 9:43 am

It is "common sense" that if you want to get the best deal, you should shop around. However, people also want to maximize their happiness and satisfaction with their purchase. I remember seeing some some media reports on a study that indicated there was a negative correlation between the amount of time spent evaluating a purchase and overall satisfaction. This research seemed to imply that by spending more time shopping around for something, you are actively decreasing the total satisfaction you will have from your eventual purchase. There are a lot of details that I'm missing here, but I'm interested in others' perspectives on this philosophy.

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Postby JerichoHill » Tue Apr 17, 2007 9:50 am

I shop around using the internet. For instance, when I bought my new Rav4 (STILL the lowest price on CarBuyingTips for 4 months running, woohoo!), I used the web to get about 15 different price quotes, haggled over email, and then went to the dealer down the street, told em the deal, and I got it.

So, the costs of shopping around I believe are alot lower now with the internet at our disposal.
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Postby brad » Tue Apr 17, 2007 10:25 am

I know a guy who was forever running out of gas because he compulsively shopped around for the lowest prices at the pump, and would drive by gas stations even when his tank was nearly empty because he thought they were too expensive. That's going too far.

I only shop around when I think there's a chance that the money I save will outweigh the time and hassle I put into shopping around. (Here in Canada we don't have many of the easy internet based price comparison tools that are available in the US) If I'm only going to save $15 or $20 on a $200 purchase, it's not worth it to me; I'd rather spend my time doing something else. If I might save $50 or more, then it would be worth the effort.

But I haven't personally noticed the reverse relationship such you describe. My girlfriend shops around more than I do, and if anything she is more delighted with items she gets at a lower price precisely because the discount plays into her satisfaction. "I love this sweater, and it only cost me $15!"

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Postby squished18 » Tue Apr 17, 2007 11:02 am

JerichoHill's and brad's responses brings to mind one finer point of this discussion:

There are at least two different reasons for shopping around. You can shop around for the best price, once you know exactly what product you are looking for. You can also shop around to compare between similar, but competing products or services. For example, JerichoHill mentioned shopping for the best price on his RAV4. However, there was likely some "shopping around" to figure out that the RAV4 was the car he wanted, as opposed to a Honda CRV.

I believe the research I originally referred to was talking about the second type of shopping around: comparing between competing products or services.


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Postby RJ » Tue Apr 17, 2007 5:15 pm

I really only shop around under two circumstances. The first is if I'm planning a major purchase and don't quite know what's out there or what features I want. The internet is helpful to get a sense of features, but for some items--such as a digital camera--it's helpful (for me) to see various models, hold them, use them, and get a sense of what will really work for my interests. I don't shop around exhaustively for these purchases, but I do enough to figure out what I want to get vis-a-vis similar items.

The only other time I really bother shopping around is sometimes when I'm doing some major grocery shopping. Two grocery stores are up the street from me, so I'll stop into the closer store (more of an upscale place) and see what's for sale and what other prices are. Then I'll go to the farther (more of a midscale economy store) and buy whatever they have at a lower price. On my way home, I'll stop at the first store, buy whatever is lower-priced there, and then I'm on my way.

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Postby onebigmortarboard » Wed Apr 18, 2007 8:55 am

If this is about "choice paralysis," then I suspect the theory works in fairly limited circumstances (such as grocery stores offering several minimally-differentiated items). In that case, sure, pick some key criteria (price, nutrition facts) and move on with your basket.

For major purchases, however, I think I'd be more likely to reduce my satisfaction if I failed to do a decent amout of market research and didn't know what I was getting. The ease of comparing things on the Internet makes that research something less than burdensome.

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Postby squished18 » Wed Apr 25, 2007 2:11 pm

I remembered a bit more about what this research said. It mentioned that when it came down to simple decisions (e.g. which chocolate bar to buy, which shirt to buy), humans do well if they conciously think about the decision. However, when it comes to more complex situations, the people that made their choice without as much conscious thought seemed to fair better when it came to satisfaction with their purchase. Examples of complex choices would be things like cars, computers, or houses.

I've only had experience buying two cars and a few computers.

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Postby Long Way from Home » Mon Apr 30, 2007 4:44 pm

I have been using for nearly one year exactly because they offered a $25 back on $125 in kitchen stuff that is now 4 for 3 which if done right is closer to 25% off than the 20% off of the previous deal. Mind you, I hadn't bought any kitchen equipment for 40 years except for pennywisepoundfoolishly buying replacement outdated pots on ebay. Having sharp knives, nonrusted utensils, uncracked plates and a stand mixer has been spendy but has made kitchen work easier.

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Shopping around would actually cause me pain

Postby Long Way from Home » Mon Apr 30, 2007 5:06 pm

I don't get a high from shopping because I have so much psychic baggage from my home life that I really can't enjoy the experience and I have been shopping intensely from Amazon for one year. My acquisitions are tied to independence from retail services for food and sales tax. Amazon has been cheaper than some local stores and grocery stores but not cheaper than bulk warehouse stores.

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Postby assassingalaxia » Tue May 01, 2007 10:09 am

I "shop around" for a lot of things. This last month, I "shopped around" for a new digital camera, wigs, and a sewing machine. For the digital camera and the sewing machine, I had to decide what would meet my needs. Once I picked a product, then I did some price comparison shopping using the internet. The wigs, on the other hand, I didn't do much price comparison- I only looked around for where I could get good quality wigs for costuming.

When I expect something to last me a long time, I first comparison shop between products so I know exactly what product I want to buy. Then I do price comparisons between vendors with a good reputation. This is my method of shopping for cars, anything electronic, furniture, etc.

For most other things, I don't price comparison shop. Driving around to find the cheapest gas negates the savings if you have to drive ten miles to save $.02 a gallon.

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