Attention, Amazon shoppers. There could be a cleanup needed on … your budget.
Yes, Amazon makes shopping easy. It could also be cost effective. The platform’s prices are typically 11 percent lower than those at speed-shipping peers Target, Walmart, and Jet, according to Profitero.
But sale price is just one factor in deciding whether you use Amazon to spend money or actually save it.
4 ways Amazon is saving you money
If you’re not sure how effective an online shopper you are, Amazon offers you a way to find out. Click on your account, scroll to your past orders, and you’ll see every item you’ve purchased on the site.
You might see orders that you now regret. To avoid making similar shopping mistakes in the future, consider these four money-saving strategies.
1. Buying used
Amazon is infamous for putting pressure on brick-and-mortar booksellers, and I’m a tiny part of that movement. Most of my Amazon purchases are used books.
The savings explain why. Say you wanted to read Daniel Kahneman’s “Thinking, Fast and Slow,” one of the best books for beginner investors. You’d find that Amazon’s new prices beat Barnes & Noble’s. But you’d also learn that buying used could cut the hardcover price from about $21 to about $10 or the paperback cost from $10 to $5.
It’s possible you could find Kahneman’s book for a lower price in a used bookstore in your neighborhood. But not having to go searching for it also saves you time.
Saving money by buying used, damaged, and refurbished on Amazon goes beyond books. Amazon Warehouse allows you to find offers posted by third-party sellers. It’s a particularly good spot if you’re looking for an electronic on a budget.
2. Holiday gifts
Every order I placed in my first three years of using Amazon, from 2010 through 2012, was a gift for someone else. I’d always hated going to the shopping mall, browsing through stores, and not being able to compare prices side by side.
Buying presents on Amazon, you can more easily set and stick to a budget. During the holidays, for example, I set a maximum $50 budget for each family member. Seeing the itemized listing for sales tax and shipping keeps me honest. In a store, I would have spent too much just to shorten my to-do list.
Finally, buying presents on Amazon is especially a money-saver if you use some old-fashioned good sense. Make a list of gifts you’d like to buy, find the best prices for each, and group them into one cheaper shipping option. If you’re not an Amazon Prime member, you need to spend $25 to qualify for free shipping.
If you’re buying presents for family that lives farther than a drive away, Amazon’s free shipping saves you money, plus a trip to the post office. And it provides gift wrapping just like brick-and-mortar stores.
There are all sorts of ways to find the best price on an item before or after you check out. When buying shoes and clothing, you might find Amazon’s price goes up or down based on your color selection. My favorite running shoes are $10 cheaper in beet red and lime punch, for example.
If you’re in the market for a big-ticket purchase like a TV, you could use a price tracker like Camelcamelcamel to alert you to the best time to buy. There are also money-saving options if you already bought the TV. You could link your account to a refunding service like Earny or Paribus in case the TV drops in price.
If you prefer, you might also check out web browser extensions like Honey. They also provide price tracking while showing the cheapest buying option on Amazon to help you get the best price.
4. Going Prime
By now, you’re probably already familiar with Amazon Prime, a $10.99 monthly or $99 annual membership that provides fast, free shipping on all orders. Whether Prime saves you money, it does offer the convenience of never having to pay for delivery.
But there are other ways to qualify for no- or low-cost shipping via Prime:
- Anyone can get a free 30-day trial.
- EBT cardholders only pay $5.99 per month.
- Students are offered a free six-month trial before a $5.49 monthly or $49 yearly charge.
- Families and roommates can share a family plan to save money.
Aside from the media streaming benefits of going Prime, being a member includes discounts on actual items. Using Amazon Family, for example, new parents can save up to 20 percent off the cost of diapers and baby food.
If you’re not a Prime member, you could still save up to 15 percent on family essentials using the platform’s Subscribe & Save program. You would need to subscribe to and receive at least five deliveries per month to score the discount.
4 ways Amazon isn’t saving you money
You could save hundreds of dollars by shopping on Amazon instead of Walmart and Jet, according to an analysis of 25 popular products from Business Insider. But there are exceptions to the rule. Toilet paper and laundry detergent, for example, can be more expensive on Amazon.
So it’s important to remember that just because Amazon can save you money doesn’t mean it will save you money all the time. Here are four ways it might be costing you.
1. Grocery shopping
In our analysis of grocery delivery services, we found that buying food online is generally more expensive than heading to the store yourself. That’s the case for Amazon Fresh, even though the service dropped its price to $14.99 per month.
Including the required Prime membership, you’d pay $279 per year to have your groceries shipped to your door. To make sure that cost is worth it to you, take these steps:
- Compare Amazon Fresh’s prices to your local grocer’s for your most frequently purchased items.
- Account for other costs of going to the grocery store, such as gas for the car.
- Ask yourself if the convenience of online shopping and home delivery makes up for the difference in cost.
For example, I’ve found Amazon Fresh’s prices to be competitive but not better than my grocery store, which is just two blocks away from my house. But just because cost outweighs convenience for me doesn’t mean it will for you. Run the numbers and decide for yourself.
2. Cart add-ons
When you click on an Amazon item you’re considering, you’ll be shown a couple of other buying opportunities under the headings:
- “Frequently bought together”: A second item that can complement your purchase
- “Customers who bought this item also bought”: Other related items
- “Sponsored products related to this item”: Other related items from third-party sellers
It’s possible that these suggestions remind you of something else on your shopping list. But it’s more likely that these advertisements tempt you into buying something you weren’t planning to purchase. These kinds of cart add-ons can end up costing you money.
This also goes for making smaller purchases to reach the $25 minimum before free shipping kicks in. When the minimum was higher back in the day, I once found myself buying a sports water bottle ($12.95) that I didn’t need and guitar picks ($1.22) I never used.
3. Buying in bulk
You might log onto Amazon wanting one of something and instead buy a dozen of it. The deal was too good to pass up, you might rationalize to yourself.
But you only save by buying in bulk when it’s a product that you:
- Need more of
- Can realistically store in your home
- Won’t burn through faster when you have more of it on hand
- Can’t buy for less money elsewhere
I tested this theory by buying a 24-count of my favorite cereal for $134.98, or $5.62 per box. I found that I ate more of this sugary treat because of the discount, not because I wanted to eat more of it. There was also little-to-no savings. The cereal cost $5.99 per box at my grocery store but was often on sale for $4.99.
4. Browsing deals
With its daily deals and grocery coupons section, Amazon is ripe for wasting time and money searching for and buying things you don’t need.
You could rationalize that you’re scoring an even better deal by using the Amazon Rewards Visa Signature Card. But you’ll still be buying something that wasn’t necessarily on your shopping list.
Here are a few ways to avoid these tempting deals on Amazon and other sites:
- On second thought: Ask yourself if you’d buy the item in a brick-and-mortar store.
- Sleep on it: Wait 24 hours before adding the item to your cart and checking out.
- Stick to the list: Ask yourself if this is a “want” that you can live without.
Make the most of Amazon by saving, not overspending
It’s understandable to go to Amazon for a sale the way you might go to Google for an answer. And, sure, Amazon does help you save money at times. But it also might encourage you to spend more than you should.
If you like shopping on Amazon but want to do a better job at saving money, think about changing your spending mindset. Then, log back in and stick to your shopping list.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|