Have you ever noticed that the cost of things are higher if you go out and buy them right away? If you buy the latest model of a TV or laptop it will be more expensive than if you buy the outgoing model, though the difference may be so minor you won’t notice the difference. Buying the latest iPhone? Well, other than no headphone jack you likely won’t see much of a difference from what I’ve been told.
Patience Means Lower Cost
Still feel like these minor improvements are worth it? Well, think about movies. When they initially come out at the movie theater, they often cost $10 dollars + to watch. By the time they make it to TV a few years later you’re paying $7 dollars for a Netflix membership for a bunch of movies or sitting through a few commercials for payment. Heck, you even see the price differential in the theater itself. If you’ve ever had one of their gift cards for a free ticket you’ll see that going on opening week will cost you an extra fee after the gift card expenditure.
One more for good measure, look at the latest game console or hot Christmas gift. The first year the item is available everyone wants it and thus the value is higher then even retail. Remember Beanie Babies for the older members of the crowd? How much is that toy worth now? That’s right, many of them dropped like a stone had you waited. So, we’ve established that most things you might purchase drop in cost over time. This has a secondary meaning though.
Rarity or the Perception of Rarity Drives Price
The sheer aspect of an item’s rarity or availability drives an individual’s desire to obtain it. This is why retailers label things as limited edition, or limited time. This is also why a car dealer will tell you someone else is interested in the car so you need to buy it now if you want it. They play to your psychological need for instant gratification, buying something that might be scarce, and a desire to stick with the crowd to drive you to purchase things you don’t need for inflated prices.
What this means is if you want to lower your expenditures on items you don’t need, then you need to build in a waiting period into your large buying purchases. If you wait for a few months from initial desire to act on a purchase, you may determine that you don’t actually need that item. You might also decide that the less expensive older model is sufficient. Finally, based on the rest of the market interest you might find the price has decreased. Give it a try.
Have you ever purposely waited for something to lower in price?