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Is Extreme Couponing "over"?

 
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brian-hansen
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Location: Oregon

PostPosted: Tue Jul 19, 2011 5:05 pm    Post subject: Is Extreme Couponing "over"? Reply with quote

It has the look of late night farce. We see a veritable parade of shopping carts as coupon "extremists" double, stack, and rebate their totals down to ten cents on the dollar from original retail prices.

Speaking as one who has found real value in slightly less "extreme" shopping, the idea is sound enough on the surface. But how many lifetimes of toiletries do you think you might need? The amount of labor and preparation needed to secure a 90% discount might require scaling up from saving $20 to saving $500 in order to seem justifiable, but having that many groceries just doesn't make sense for most people. The needed "scaling up" is not workable.

Your religion, or your fears of Y2.012k might encourage you to keep a year's worth of food on hand, but otherwise, even highly imperishable goods have a limit. Even canned goods will explode given time. Storage costs can add up, as can other intangibles (the burden of having these extra goods may weigh on you, even to the point of influencing your decisions about jobs and moving). For all the expertise the market has developed in the area of encouraging us to buy more, our society doesn't give us a lot of outlets for distributing our excess acquisitions back out there. Garage sales, eBay, and charity. Given the incentives these each offer, its no wonder that half of America's garages are too full to park in.

The impulse to collect wealth in the form of things of value goes a long way back on the evolutionary timeline. Indeed, for the vast majority of recorded time, and, of course, before then, there were no mutual funds, savings bonds, retirement accounts, etc. There were animals, children, gold, and political/military power. And stuff. These were the actual elements of wealth. And all of them were problematical. In any case, it is natural that we would be drawn to stockpiling wealth in the form of things.

With the advent of "modern" financial markets, even small amounts of money can be put away, and we expect them to earn interest and dividends. The "things" we stow away, though, generally lose value, and their storage and liquidity costs make matters worse. Even when we can acquire goods at ten cents on the dollar, one needs a very good plan, and a series of assumptions to play out just right to see any likely advantage to mass acquisition.

Indeed, the psychology shown on the extreme couponing shows I've seen is closely related to another show on cable TV: Hoarders. These people are setting themselves up to being one divorce or family member dying away from the hoarders. The real hoarders are the people that have stopped trying to manage their hoard, and who have given up everything but the (irrational) value they put on the junk they have acquired.

As I mentioned in another post, coupons are now selling at higher than face value on eBay. It's getting harder and harder to find substantial savings this way, and, as I hope I've demonstrated, scaling it up, even if it were possible, is, ultimately, mostly unworkable.

The one bright spot in this equation is the local Chinese trading outpost springing up in our suburbs. I'm not speaking about Wal-Mart. Wal-Mart is much too expensive. I refer to our dollar stores.

It is hard to see how a majority of retail stores and brands can stand against this tide. That spray cleaner, like, say Formula 409, that sells for $3.99, is just, what?, a dollar. The USB connector that someone wanted to charge me $14.95 for? The big bowl for chips at the party? Who needs coupons and rebates? Who needs to buy a lifetime supply? Its just a jaunt down to the Dollar Tree, and, if it's not ten cents on the dollar, its close enough. Maybe some of these extreme couponers should stop there and get some "Dollar Tree" therapy.
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brian-hansen
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PostPosted: Thu Aug 25, 2011 5:09 pm    Post subject: Reply with quote

The NYT published a piece recently on dollar stores, and captured some of what I'm talking about: the opportunity for shoppers, and the threat to other retailers. Even as it described the latest trends in the dollar world, it somehow missed the bigger picture. I think we're seeing a "sea change" in the economy. One can only marvel at what we've been buying in other stores when we see that it is available for only a dollar.

Most instructive were the comments on the article. Some people only see shoddy products and poisonous food. They'd rather get one really good article for $10 than keep buying replacement products at $1. The fact is that rather than "you get what you pay for", we now (admittedly cynically) realize that "you get less than what you paid for". The dollar stores are teaching us just how much less we've been getting all along.

Meanwhile, its hard to have a general view of whether the shoddiness of the $1 item is significantly less than that of the $5 one, and the $20 one, and, overall, whether that difference really matters. In my view there's no reasonable alternative to comparing these items on a case-by-case basis.

Once again, we're seeing the prices declining to the point where the cost of selling is a major component. The products themselves are nearly free.


The Dollar-Store Economy

Quote:
Heather Mann writes a blog called Dollar Store Crafts, which evolved from her occasional trips to the extreme-discount dollar stores near her home in Salem, Ore. Her readers admire her gift for buying really cheap stuff and then making cool and beautiful things from the pile. Her knockoff “alien abduction lamp” is jury-rigged from a small light fixture, two plastic bowls (flying saucer), a clear acrylic tumbler (tractor beam) and a small plastic toy cow (abductee) — all purchased for about five bucks.


http://www.nytimes.com/2011/08/21/magazine/the-dollar-store-economy.html
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brian-hansen
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PostPosted: Sun Aug 28, 2011 6:57 pm    Post subject: Reply with quote

Consider 3 common foodstuffs that I find available for $1 now at my local dollar store: peanuts in the shell, salsa, and frozen potatoes. These routinely sell for $2-4 at grocery stores. How long can the other stores sell these products at their currently high prices? And what happens when the dollar stores add other products to their stock?
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