Friday, September 14, 2007

Couponing on e-Bay

It has been a while since I had a pure personal finance post, but my wife has done some experiments with buying coupons on e-Bay. Some suggestions if you are considering this:

[1] Know what you are doing: My wife has bought and sold on e-Bay and knows her way around. Me, not too much.

[2] Consider opportunity cost of coupons: If you are a college student with a part-time job earning $8/hour, aggressive couponing makes sense. If you are a harried professional working 50 hours per week and raising two kids; even the best coupon-hunting on e-Bay isn't worth it.

[3] Consider frequency of use: One of the great traps in seeking bargains is buying something that you won't use just because it is on at a good price.

[4] Consider span of coupon and perishability of item purchased: Related to [2], if the coupon expires before or shortly after you get it from e-Bay, you may not be able to fully benefit from coupons, especially if your preferred store limits the number of coupons you can use in one trip. Additionally, buying large quantities of coupons for a perishable product only makes sense if you have a large freezer or you plan a donation to a charity with a large freezer.

[5] Take shipping into account: If you are buying 20 coupons $2 off coupons for Tide; the auction price is $8.60 and the postage is $3.40, your cost per coupon is not $0.43 but $0.60 [(8.60 PLUS 3.40)/20].

Feel free to add additional points, I may have overlooked something important here.


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