Know Your Values

Know Your Values

Understanding values is the key to ‘bargain driven buying’. It’s a prerequisite to finding bargains. It is what all else rests upon. You must be able to discern the worth of the object or service you’re evaluating. If you haven’t a clue what an item is worth, you can’t possibly know when you have truly found a good buy.

If you find it difficult to find reduced prices, then you don’t know your values. When you understand values, bargains become obvious. I can’t tell you how many times I have seen flagrant bargains ignored by oblivious shoppers because they didn’t have a big sign on them labeled ‘on sale.’ Some of the best prices aren’t widely advertised or are inadvertent errors in pricing just waiting for a clever opportunist to take advantage of them.

You must take the time to shop at retail and wholesale levels to determine the various prices attributable to the item you’re prospecting. It is necessary to become an expert on values of those things you buy on a consistent basis or those occasional purchases of high value.

Become a connoisseur of values, constantly leafing through advertisements, publications and the Internet, staying apprised of the worth of those items you plan on purchasing. Let perception of value become a part of your life. It will enable you to see the steals when they come along. Without knowledge of values, you’re like a treasure hunter without a map. You could be standing next to a pot of gold without realizing it.

For example: several years ago, while waiting for a flight at the airport in Frankfurt, Germany I came across Swiss luxury watches selling at approximately 50% off the lowest price I had ever seen. I knew their value intimately. I had ogled them in various shops in the U.S. and other countries on numerous occasions, but couldn’t justify paying their exorbitant prices.

However, at this price, I bought them instantly, knowing that I couldn’t possibly go wrong. The currency conversion at the time and a fluke or error in pricing came together to produce an extraordinarily good value. I would not have had the ability to know this was a tremendous bargain without understanding their real value.

The jewelry store clerk seemed to assume I was among the flagrantly wealthy the way I snatched up such expensive items in a heartbeat. Ironically, I had actually been shopping for this product for years. Only my knowledge of value prompted conservative and plodding old me to leap at an opportunity like this without hesitation.

Knowledge of value is key, whether you are buying a box of dental floss or a piece of real estate.

In another example, it came to my attention that a particular bank needed to sell a home immediately to meet certain financial guidelines. I knew the values in the area and of similar homes very well. They were willing to sell it at a value I realized was well below market to ensure a quick sale. I negotiated that price even lower.

Then I did a cursory inspection, finding things that caused me some concern and accordingly negotiated the price down even further by itemizing an additional ten thousand dollars of repairs.

The sale was concluded. After negotiating with vendors, the home required much less than allotted to repair. It was sold for a large profit. Knowledge of values enabled me to act quickly, while knowledge of repair costs protected my interest and provided an increased profit, allowing me to buy confidently before other investors could pounce on this opportunity.

Your ability to judge value will serve you well. It will be your key to seeing what others overlook. It will enable you to profit on all types of purchases, whether it involves saving a hundred dollars on laundry soap bought in bulk or tens of thousands on undervalued property.

When you understand what things are worth, the steals and great values jump right out at you. You see through the clouds and are able to discern things that others overlook. You hold the key to your success. You are a true OPPORTUNIST.

Don’t Be Lazy

Too many people take the lazy way out. They let others tell them the value of what they’re purchasing. They assume the arbitrarily high numbers set by retailers are the real value. Then when a retailer comes along and marks down the price by 25% or 50% they feel like they have gotten a real bargain. More often than not they have not.

I have a favorite saying when somebody tells me that something is a certain percentage off. I ask them “off of what”. Clothing for example is routinely reduced by huge percentages, but there is also a very large mark up. I suspect clothing retailers set ridiculously high prices on their stock, maintain them at that level for a relatively short period of time with minimal sales, and then routinely mark them down 25%, 50% or more to lure customers in droves into the store. Many retailers seem to always have a sale going on. That should tell you something. That should let you know that those beginning list prices are nothing but ‘donkey dung’, bearing no resemblance to real market value.

If you want to understand values you have to become a perpetual shopper, constantly skimming over ads, researching the Internet and comparing prices from one store to another and even one area to another. It doesn’t have to be an arduous task, just a slow accumulation of value trivia. It can be fun and entertaining building the knowledge that will allow you to outwit those trying to outwit you.

Become an expert on value. That is key to becoming an OPPORTUNIST. You need to make understanding the values of goods and services your hobby. Then when the real bargains come your way you’ll know their true value and will be able to act quickly and reap the most benefit before everyone else awakens to that same realization. Also, when an emergency arises and you suddenly need a new set of tires, bodywork done on your car or healthcare you’ll be prepared with the best choice.

Play The Game

Cost comparing is not a bad way to spend your time. It can be fun and entertaining if treated like a game. The players in the game are you and the retailers and wholesalers out there. Their objective is to sell their wares at as high a price as they can and yours is to pay a little as possible. You of course want to play the game to win.

It’s not a straightforward game. There are a smoke and mirrors thrown up to confuse you and make the decision making process difficult, but that’s just part of the game. You just have to learn the rules set down and how you can circumvent them or use them to your advantage. After all, the game wouldn’t be very fun and interesting if it wasn’t challenging. Besides roadblocks are good. They diminish the competition. If every opportunity was evident, everybody would circumvent the system and the vendors would change the rules. When you are amongst a small group of people who understand the rules, you have a distinct advantage. You have the secret key that opens the doors to riches.

When you take the time to understand values opportunities become self-evident. A good aptitude for math doesn’t hurt either. Determining an item’s worth many times requires you to quickly calculate the true cost. Your ability to match wits with the seller and win, can hinge upon your skill in this area.

Buy With Both Hands And Both Feet

Now what do you do with all this money you’re going to be saving. Well, you invest some in your I’m Tired of Working Fund and reinvest the balance in the I Can Buy In Quantity Fund.

When you see a good value, buy in quantity. But when you find a steal buy with both hands and both feet. If you want to really make your bargain buying hobby pay off you need to hit a few home runs out of the park. You need to buy in quantity when you find great values. It makes all that research and bargain hunting pay for itself and then some.

Circling sale items and running out to buy one or two of them isn’t going to get you very far. It may not even pay for your gas and wear on your vehicle. You need to think a little bigger if you plan on making some real money on your everyday purchases.

For example: While shopping at end of season clothing sales, I discovered that one retailer was marking off a huge quantity of their stock at 80%. That was a pretty good deal all by itself, but in addition they were doing a final-final-we-promise-not-to-do-this-again sale where they were taking off an additional 15%. That’s really good, but in addition I got another bonus.

Now I suspect it was the retailer’s intention to take off 80%, leaving a balance of 20% or $20 for every $100 spent, and then take off 15% of that remaining $20 balance. Well…. the system wasn’t quite working like that for whatever reason. When something was rung up it was taking an extra 15% off the original price, producing a discount of 95% and a total cost of only 5%. Now that was a steal, especially for top quality designer type clothing.

I guess I could have bought one or two items and considered myself lucky, but rather I went on a buying spree, anticipating needs for the next few years. I looked like those folks on that old game show where contestants got to keep as much as they could shove in their grocery carts in a certain period of time. I bought suits, expensive woolens and dozens and dozens of shirts, pants and everything that goes under, over and in between. I ended up with thousands and thousands of dollars worth of good quality clothing for pennies on the dollar. Everything was nearly free. I was set for years. Closets bulged. Storage was the only problem. I had quantities of designer clothing literally for the price of dusting rags.

Typically, people will race across town and buy one or two of an item on sale and then buy the rest of their purchases at full retail. That’s what the retailers expect. They donated the cost savings on the sale items to capture the customer’s full price purchases.

They have fallen into the retailers trap. The customer has saved very little in the process. But, when you buy only the sale priced items and in enough quantity, then you’re able to make a substantial savings. Your greed has prevailed.

Necessities are an excellent item to buy in quantity. Try to focus on them. Necessities will bring you real savings. These are the things you will end up having to buy, regardless of the price when you need them. It’s unlikely that you’ll stop washing your body, clothes or dishes with soap. It’s even more unlikely that you will halt the use of toilet paper, at least I hope not. I suspect groceries will always be a part of your life, unless you go on a long term fast, in which case your life expectancy will also be limited, and all else will become irrelevant. These are the necessary items. There’s little waste. It’s not like buying candy, your consumption won’t probably rise much by buying in quantity.

The shelf life and your storage capacity are your only restrictions on how much you should buy at one time. Other than that buy in as much quantity as you reasonably can. Buy with both hands. Use your two feet too if you can work it out.

Where Are The Bargains Hiding?

You’ll find bargains everywhere, probably right under your nose. Your knowledge of values will make them stand out from the crowd. There more good values out there than you have the time or dollars to chase down. If you’ll just watch for sales, read a lot and get out there and do some comparison-shopping, they’ll become readily apparent.

All varieties of retailers offer half off specials, two for one specials and special pricing on specific items that are intended to draw you into the store to buy the more expensive regularly priced items. Buy the super sale items. Leave the rest. Discipline yourself to only buy what is heavily discounted. Dance around from place to place picking and choosing only those items that are offered on deep discount specials. Only those items.

The industry has a term for folks who buy like this. They are called ‘cherry pickers’. Become a damned good cherry picker! Take pride in it. Cheap is the new coooool.

Grocery stores routinely offer special prices to get you in the door. They even offer huge reductions on items nearing their expiration date. The savings can be spectacular. For example: I purchased a vacuum packed item well ahead of its expiration date for 5% on the dollar and another perishable product that freezes exceptionally well for 50 cents instead of the usual $6. I wiped out the entire display and filled up a large section of the deep freezer. Freezing generally extends the expiration date for long periods of time. I also believe the expiration dates suggested have a large margin of safety built into them.

Couple coupons with grocery sales and you can walk away with bargains. By combining sale items with coupons, you form a double play on the grocery store. This can result in big savings. You can even get items for free when stores double and triple coupons. When something you use regularly is on a half off or more sale, fill up your cart and go back for another. Don’t be shy.

Don’t overlook liquidation stores that buy up excess quantities of manufacturer’s inventory. Sometimes the savings can be staggering. I’ve purchased $20 fertilizer for $1 per bag, $4 whitening toothpaste for 50 cents, $35 name brand wall fixtures for $1, and hundreds of others everyday items for a tiny fraction of their real worth. Discounts add up into huge savings with quantity purchases over a period of time, even for petty amounts.

Every market for goods and services has a retail and wholesale level. Find the wholesale level by researching the media and by fraternizing with those in the business. Once you locate the wholesale buying market, you’ll be able to buy personally and commercially for profit.

Play The Players

Turn the tables on deceptive promotions. Play the players.

Very often businesses market ‘loss leaders’, products or services offered below the normal market value, to entice you to do business with them.

Most just want to get you into their stores in the hope that you will buy other merchandise or services while you buy your low priced item or claim your gift. Disappoint them. Buy the bargain or claim your free item and make a hasty exit. Leave before they make their money back and then much more by enticing you into buying their often over priced merchandise.

Other merchants are more unscrupulous. Their intent is deceitful from the onset. They draw you in with their incredible values. Then, once they have you sequestered in their lair, they attempt to sell you items of a more costly and profitable nature. The original advertised item is out of stock, at another location, inferior in quality, or shown only after more costly items are shown to you first.

Their hope, of course, is that after seeing the higher priced and possibly higher quality item, you will lose all interest in the ‘no profit’ draw that got you in the door. It is easy to see why. Even if they eventually do produce the special sale item, by then you will likely have seen the ‘better’ models and find the advertised pawn unappealing.

This is how they dupe countless numbers of customers each and every day. You see these types of products advertised over and over again. They must serve their purpose or they wouldn’t keep playing the same game.

How can you hope to contend with and profit from such deceptive practices?

Firstly, know your values for the product or service offered. Very often the best ‘value’ offered is the one advertised. Not always though. Some unscrupulous businesses offer pure junk, hoping that once you compare that to their other offerings, you will buy their more expensive models, which are often a poor value. I’ve seen many salesmen or saleswomen laugh at the ridiculous promotions that are either of poor quality or virtually non-existent. When you encounter this type of merchant, walk away, or at least recognize the true value and negotiate accordingly with your knowledge of real value.

Secondly, insist that the seller produce the advertised item immediately. After all, if they advertise it they should have it. It’s the law. Often, the low or no profit item, even though slightly inferior to the other offerings, represents a much better dollar for dollar value. Many times people will irrationally pay enormously more for just a little better product once they are compared. Don’t fall into this trap. Many times the extra features are simply not worth the money. Insist that the seller ‘pony up’ the promised goods.

Many years ago, while on the first day of my first job out of college I was fortunate enough to have lunch with the owner of the corporation I went to work for. He was probably the wealthiest individual in the state I grew up in. Numerous businesses bore his name across a broad section of the Midwest. He had one sentence of advice that he gave to me that has stuck with me over the years. As we overlooked the lobby of one of his renowned hotels, he said; “People are willing to spend a lot more to get a little more.” He was referring to the clientele’s willingness to pay exorbitantly for the relative opulence he provided in his luxury hotels.

That simple commonsense statement stuck with me through the years and helped me profit in a number of different situations, both as a seller and a buyer.

As a seller, it suggested that I could make proportionately more money by adding a little more to the product I was selling. For example; while investing in real estate, I found that most people lacked ‘vision.’ If a property didn’t look good, they couldn’t see the potential and accordingly would pay less. If a property was spruced up with say a mere two or three thousand dollars in improvements, it might easily result in a ten or fifteen thousand dollar higher sales price. People did indeed pay a lot more, for a little more.

As a buyer, the wisdom indicated to me that I would receive better value from a merchant by forgoing the extra profit he or she would earn on the extras by sticking to the base model rather than succumbing to their ‘bait and switch’ techniques and buying the deluxe models. I decided I would be better off either forgoing the ultra-expensive deluxe models or negotiating the seller’s profits down to my level, based upon my knowledge of his cost and profit ranges.

To illustrate; during my search for a new vehicle, I saw a very appealing price advertised. It was well below the customary price for the model I was looking for. Upon inquiring at the car dealership, I was told none of the models advertised could be found, but that they were still looking. Then I was subsequently shown vehicles with larger engines, power this and thats and fancier interiors which sold for many thousands more than the advertised model. Many of these things were enticing, but were grossly over priced and unnecessary for my tastes.

I could have paid almost twice the base cost, for the SAME vehicle. The base model came with all the amenities I needed. I stood firm, DEMANDED to see the advertised product and ultimately walked away with a wonderful product for a very low price. I played the player. The squeaky wheel got the grease.

Playing the ‘I’m A Stupid Buyer Game’ can be fun and profitable. On one trip to a famous gaming town, Las Vegas, I decided to see how much money and gifts I could earn in a day by playing the timeshare folks unsavory offerings for attending their presentations. Most people avoid them like the plague. I went looking for them.

I learned certain key elements, phrases and scripts that were sure to get me in and more importantly out of their presentations with the goodies in short order. Of course, I bought nada, but I did walk away with hundreds and hundreds of dollars in cash, merchandise and complimentary shows for a small investment of time spent mostly laughing non-stop while playing their silly little games. If you put the whole experience in its proper perspective, the process can be entertaining. And if you loudly question the value of their product in a crowded room, it is amazing how quickly they will get your gift and thank you for coming.

Learn to play the players. When you see free giveaways, extreme sales and promotional offerings that seem to be too good to be true, go for it if the company seems at all reputable. Just don’t be diverted from your goal. Ignore the over priced and alternative products offered. Take the goodies and run. Deceive the deceivers.

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