Home » Subscription Shopping Is Here to Stay, but Be Wary

Subscription Shopping Is Here to Stay, but Be Wary

by Chris Poindexter

Subscriptions have been around for a long time. We used to take them for granted in print media like newspapers and magazines, then cable TV, and now services like Netflix, Hulu and Amazon. When considered in that context, it shouldn’t come as any surprise that the subscription model would start making its way into other aspects of our lives, to the point today that subscription shopping is the fastest growing trend in retail.

Sometimes a subscription service can save money. If you’re addicted to that daily run to the coffee shop, then a service like Cups (warning: eye bleed website) in New York is just the ticket. For $85 a month you get unlimited lattes at a network of independent coffee shops. If you’re spending more than $5 per workday on lattes, you’ll save money. Cups has done so well that it’s looking at expanding into a network of over 200 coffee shops in the city.

Not content to let independent shops cash in on subscription shopping, big retailers are getting in on the act. Target stores let you set up a schedule for hundreds of everyday items, which they’ll ship right to your door. Target gives subscription shoppers a 5% discount and free shipping to sweeten the pot. What they’re really selling is convenience — and for busy households that’s a commodity product. A similar service at other retailers is available for almost anything you can imagine, from clothes, to car service, even movies. Adobe has moved all of their software offerings to a subscription model; and online video games have been charging a monthly subscription fee for years.

All the same there are downsides to the new wave of subscription shopping.

Overlooking Lower Cost Alternatives

The solution to an expensive coffee habit might be getting a machine of your own and skipping the coffee shop. Even a Keurig, one of the more expensive alternatives for coffee at home, is still a fraction of the cost of buying coffee out.

It’s Still Another Bill

The $15 a month for your favorite fantasy video game, plus $19 a month for Photoshop, adds up to $408 dollars a year. Add a Netflix subscription with the DVD option, and you’re looking at another $260 a year. Kick in a gym membership, some online storage, a newspaper, iTunes, and Amazon Prime, and you’re starting to get into some serious money. The problem is that adding these subscriptions here and there can sneak up on your finances, and one day you’ll wake up to the fact you’re bleeding $3,000 to $4,000 a year.

Missing Out on Bulk Savings

If you’re getting groceries by subscription, it removes to the incentive to stock up when items you use regularly go on sale. If you’ve ever met any of those extreme coupon shoppers, they all have entire rooms devoted to storage for goods they accumulate and don’t need to use right away. You don’t have to go that extreme — but buying in bulk will save money in the long run.

Convenience has a price but these days, when people are chronically short of time, many are willing to pay the price if it means saving a trip to the store. It’s a seductive trap, that can grow to siphon off more and more of your income. In the event of a job loss or illness, those monthly bills are going away regardless.

The bottom line is, despite the convenience, most people are going to be better off with a Costco membership and somewhere to store items purchased in bulk.

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