Last month, I wrote a popular article for U.S. News and World Report about “shopping hierarchies.” Here’s how I defined “shopping hierarchy” in that article:
However, there’s stronger strategy you can apply that affects the price of almost everything you buy. I call it the “shopping hierarchy” strategy.
It’s a simple strategy: Whenever you go to a store to buy an item, always start at the store with the lowest prices. If you do this every single time, you’re bound to pay low prices for everything you buy.
The article provided an extremely brief look at shopping hierarchies, but based on the feedback from that article, a number of readers wanted more information or had additional ideas that they wanted to add to the concept.
I myself use “shopping hierarchies” all the time, particularly for groceries, household supplies, hobbies, and clothing. For me, I’ve found that a “shopping hierarchy” is a great tool once you actually start using it, but convincing yourself to make that leap and actually implementing it add up to a much more difficult problem.
So, let’s start with the basics.
Why Would You Want a Shopping Hierarchy?
The reason for a shopping hierarchy is simple – it lowers costs. It’s simply a very cost-effective strategy for most of the purchases people typically make.
This happens because you’re opening yourself up to a wider range of buying opportunities. Most people get stuck in a routine of using the same handful of stores for most of their purchases. A shopping hierarchy is meant to dislodge that a little bit by incorporating lower cost stores.
Aren’t You Just Buying Junk?
Often, the perception is that lower cost stores – like dollar stores or secondhand stores – just sell junk. In truth, almost every low cost store like this that I’ve ever visited has a mix of low-quality and surprising high-quality goods.
When you walk in the door, your reaction depends entirely on what you’re looking for. If you expect to see junk, you will see junk. However, if you expect to find a lot of gems mixed in, you’ll find those instead.
Once you see in detail how it works, this will make complete sense.
How Do I Set One Up?
A shopping hierarchy isn’t hard at all to set up. It just requires a bit of planning and a new routine.
Follow a Few Basic Rules
A shopping hierarchy is pretty easy to explain on a basic level. When you go shopping, you start at the retailer with the cheapest prices, where it’s fine to be picky about what you buy. After that, you move “up” to a more expensive retailer with a better selection. The more you buy at a lower-cost retailer compared to a more expensive retailer, the better off you are.
There are really four key rules to follow when using a shopping hierarchy. If you stick with these four rules, you’ll end up with the lowest prices on stuff you actually want in your home.
Shop from the “bottom up.”
What I mean by this is that when you go shopping for a particular type of item, you should start at the store that consistently has the lowest prices on that item. For example, if you are shopping for clothes, you should start at a secondhand store. If you’re shopping for toiletries, you’ll probably find the best deals at a drugstore (where you’ve been following the flyers and are in their discount program). For groceries, it’s probably a store like Aldi or Fareway.
Don’t be a “retailer snob.”
I was once a “retailer snob.” I didn’t shop at Aldi, for example, because of one bad experience in my childhood.
After a while, I began to realize how ridiculous it was. I can understand being unwilling to buy certain cheap products – I basically avoid cheap garbage bags, for example – but avoiding a retailer because of one bad experience in one branch a bunch of years ago?
I started using Aldi again and I never looked back.
The same phenomenon might be true for you and some stores in your area. I recommend giving them another chance and keeping your eyes focused on low-cost items. You might be surprised at what you find.
If you don’t like a particular version of an item, don’t buy it.
I don’t buy cheap grocery bags, period. I’ve had too many bad experiences there. I won’t buy shirts unless they’re reasonably new-looking and I’m confident about how they’ll fit. I won’t buy used electronics without a warranty. I have a number of little shopping rules like this.
A shopping hierarchy doesn’t care. I’m just seeking the best price on acceptable garbage bags, clothing, electronics, and other things.
Always be willing to try the low-end version of an item.
Almost always, I’m willing to try a new cheap version of an item, particularly a household item that I use regularly. At this point, I’ve already tried many of the cheap brands on most of the things I would buy.
My philosophy is this: if it works well, then I have another item I can buy at a discount. If it doesn’t work well, it was cheap and now I know.
Surprisingly, it’s actually pretty rare for a product to be truly awful (other than garbage bags… don’t talk to me about garbage bags). I might decide that an item isn’t good enough for me to buy again, but it’s rarely bad enough that I won’t finish it up anyway.
Look for the Discount Retailers
One of the first things you should do if you’re trying out this strategy is to find all of the discount stores in your shopping area and check them out. Google Maps can help with this, as you can search there for “groceries” or for “drugstores” or for “secondhand shop” and it will point out matches near you.
On your next shopping trip, check out a few retailers you’re unfamiliar with just to see what they have and what the prices are. You might find that they aren’t any better than other retail options for you – in fact, you’ll find that most of the time. Still, it’s good to know, and having more options is always good, particularly at specific times like when you’re buying clothes for your child.
Establish Relative Products and Prices
I consistently shop at about a dozen stores in my area for our needs – food, clothing, toiletries, and so on.
Within that hierarchy, I have a good sense as to what each store carries and, more importantly, their relative prices. When I need to shop for clothes, for example, I can rattle off five stores that I check in order, with the first one being the cheapest one.
I’ll go to the cheap one and I may or may not find what I’m looking for. If not, I move to the next cheapest one. Again, I may or may not find what I’m looking for. I keep moving up.
This way, if I do happen to find items that match what I’m looking for, I know I’m in one of the cheapest places around to buy it.
Learn to Be Proactive About Needs and Have a Good List
As you start using a hierarchy, one of the best things you can do is to start being proactive about the things you need. For example, if you wait until you’re completely out of soap to go buy some soap, you’re probably not going to want to go to three stores looking for the right soap at the right price. I know I don’t.
What we usually do is have one “big” shopping trip each month for non-perishable items. We’ll buy clothes and household products and many other things on this trip and we start off at the cheapest stores around, working our way up from there. I’ll hit the drugstore hard with our discount card, making sure to pick up items we need that also appear in their flyer, and then we’ll visit the warehouse club. We’ll hit this excellent little secondhand store for children’s clothes that’s near us. We might end up shopping at seven or eight stores that day, but most of our items will come from discount or secondhand retailers, so our total expense is pretty low.
The key is being proactive. Before we go, we look around and make a list of everything non-perishable that we might need in the next month, and it often becomes a pretty long list. For a shopping hierarchy to be worthwhile, this kind of approach is important.
What about groceries? I’ll often shop at two – sometimes three – stores on our weekly grocery shopping trip. My first stop is at the discount retailer, where I can sometimes be picky about what I buy. After that, I hit the mid-level grocery store, which is Hy-Vee in this area. After that, I sometimes hit a food co-op or other specialty store if I need something specific I couldn’t find elsewhere.
All of this relies on having a good shopping list that anticipates your household needs for a while. Without such a list, a shopping hierarchy just doesn’t work.
A “shopping hierarchy” is just a shorthand way to describe the general method I use when shopping for our household needs. I make thorough lists, start at the cheap retailers, only buy the stuff I actually want in my home, and move up in retailer quality to finish out my list.
As a result, we go shopping for food and household supplies less than once a week (believe it or not, Sarah and I have only went to a store twice in the last month… thanks, in large part, to our garden). When we do, we’re armed with a list and a plan. Our goal: get quality stuff we’ll actually use for the best price possible.