TIME Shopping

The Very Costly Mistake Almost All Shoppers Make

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John Nordell—Getty Images

It's costing us billions every year

Buying store-brand items to save money seems like a no-brainer, but many of us still don’t — even though buying generics could save American shoppers $44 billion a year. Wonder why we’re willing to pay double or triple for virtually identical products that carry a name brand? A new research paper explores why we do it and gives us hints how to stop it.

Matthew Gentzkow, a professor of economics at the University of Chicago Booth School of Business and one of the authors of the study, says research shows that people who are experts in areas like food or medicine tend to buy more generics in those categories. Pharmacists, for instance, are much more likely to buy generic over-the-counter headache medicine. Chefs have a greater tendency to buy store-brand pantry staples like sugar, salt and baking mixes.

This observation leads Gentzkow and his team to theorize that the rest of us pay more for name brands because we lack the knowledge base these culinary or medical professionals have. Pharmacists know that CVS-brand ibuprofen is literally the exact same medication as Advil, so they’re less susceptible to the marketing message that the name-brand pills carry an advantage that justifies their higher price.

The rest of us? Not so much. We default to the marketing machine that tells us name brands are somehow inherently better. To be fair, that’s because there is a difference in many cases. In many categories of stuff we buy, you get what you pay for — but marketers have highjacked that and pushed on us the belief that name brands are better all the time, which just isn’t true.

“Brands exist for a reason, which is in part to help people distinguish poducts that really are higher quality,” Gentzkow says. “What firms do is exploit that to sell products in other contexts and the problem is that people can’t tell when brands are really better.”

Even if people know a generic contains the same ingredients — even if the package specifically says “compare to” the name brand equivalent — we still don’t believe they’re the same thing without a fairly deep base of professional knowledge. People especially are intimidated by purchases that involve a medical question, unless they’re in that profession themselves. It doesn’t even have to do with educational level overall, Gentzkow says. Registered nurses are more likely to buy store-brand medications than lawyers, even though lawyers have a lot more schooling under their belts.

“We’re looking at people who have a lot of information not only about the active ingredients but other information that’s relevant,” Gentzkow says. “I think the gap here is about more than just there are facts that people don’t know. It’s that making the correct decision requires quite a lot of information and sophistication.”

But this doesn’t mean you have to get a pharmacy degree or go to culinary school to avoid overpaying for name brands, Gentzkow says. There are ways you can train yourself to think like an expert when you’re weighing store- versus name-brand purchases.

“Ask yourself, how hard would it be for another company to make something that’s the same?” he says. “Where am I finding that the store brand stuff is just as good? Are there other places I might apply that same knowledge?”

We tend to learn which generic items work or taste as well as their branded counterparts by trial and error, so build on that, Gentzkow recommends. “People have a really hard time extrapolating knowledge from one context to another, but it’s really valuable to figure it out.”

TIME Shopping

Why It’s Your Fault There’s Already Christmas Stuff in Stores

Richard Drury—Richard Drury

Exhausting? Yes. Going anywhere anytime soon? No

Everybody complains about seeing inflatable lawn Santa and Christmas ornaments stocked next to the candy corn and costumes in October or even earlier. Better get used to it, though. Plenty of research indicates that ‘Christmas creep’ shows no sign of slowing down—and stores are just delivering on what shoppers today want.

Consulting company the Hay Group finds that more than half of retailers surveyed say they’ll have kicked off their holiday promotions by this month (including almost 20% who said they started last month), up significantly from last year. That’s a lot of red and green mingling with Halloween orange and black.

“Shoppers can expect to start seeing holiday sales early this season, as retailers work to get customers in the door sooner,” the company says.

Both the Hay Group and the National Retail Federation are predicting healthy increases in holiday spending this year, and after a largely disappointing back-to-school shopping season, stores are scrambling to be the first ones getting a crack at your wallets.

If the NRF’s prediction of a 4.1% increase in holiday shopping this year is correct, it will be the first time in three years that holiday sales increase by more than 4%. “Consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers,” the group says.

The funny thing is, as much as we complain about holiday promotions pushing into ever-earlier parts of the calendar, retailers are just delivering what customers today seem to want. We might gripe, but we’re still buying holiday stuff as soon as it’s on shelves. The NRF found last year that 40% of shoppers started before Halloween, including nearly 20% who started in the month of September or earlier. The Omaha World-Herald says the Mall of America even sells plenty of holiday-related items over the summer.

“You’re going to see holiday promotions coming on maybe even prior to Halloween… with ‘Black Friday’ thrown in there repeatedly before Thanksgiving,” Ken Perkins, president of research firm Retail Metrics, tells the newspaper.

MONEY Food & Drink

Why Sales of Yet Another Traditional Breakfast Staple Are Tanking

141014_EM_Orange_1
Alamy

Sales of orange juice, once considered a must-have component of a healthy American breakfast, have hit a 16-year low.

In September, the Florida Department of Citrus announced it had paid Marvel Comics $1 million to redesign a superhero mascot who is powered by (you guessed it) orange juice. His name is Captain Citrus, and after helping the Avengers save the world, he says things like, “Just think, it all started with a glass of ORANGE JUICE!”

It’s a dorky attempt at boosting orange juice sales, but it’s hard to blame citrus growers for the effort. Clearly, the industry needs all the help it can get.

A year ago at this time, it was revealed that during the 2012-2013 season, orange juice sales in the U.S. had totaled 563.2 million gallons, the lowest level in the 15 years that such figures have been tabulated. In the year since, things have only gotten worse for folks in the business of producing and selling orange juice. Data released this week shows that Americans bought a new low of 525.1 million gallons of O.J. during the 12-month period that ended on September 27.

By some measure, orange juice sales have fallen 40% since the 1990s. Clearly, sales have suffered partially for the same reasons that cereal and milk sales have declined: Our fast-paced, on-the-go culture means that fewer people are eating a sit-down breakfast at home, or eating breakfast at all.

Orange juice has faced additional hurdles because coffee, energy drinks, and other beverages have gained market share as popular drinks for any time of the day, breakfast hours included. Also, one of orange juice’s biggest selling points—that it’s a brilliantly healthy way to start your day—has increasingly been called into question. A strong argument has been made that orange juice, packed as it naturally is with sugar, is no better for you than soda in terms of nutrition. As Businessweek reported late last year, a typical 8-ounce glass of O.J. contains “110 calories and 26 grams of carbohydrates—more than a pair of Oreos.”

The criticism has prompted members of the orange juice industrial complex to encourage consumers to drink smaller glasses of O.J. daily—a little is better than nothing at all—and more recently, to hope that a rebranded Captain Citrus just might save the day for citrus sellers. The new Captain Citrus, it must be noted, is as buff as Thor and Captain America, with six-pack abs and a bodybuilder physique. The problem is that, based on the way sales have been trending, consumers seem to associate orange juice with the image projected by the old Captain Citrus, best described as a “big, fat talking orange wearing a cape.”

Whereas the new Captain Citrus is drawn with a glowing orange on his muscular chest reminiscent of Iron Man, the vintage version has a large “C” in the center of his spherical body. Presumably, it stands for “Citrus,” not “calories.”

TIME Culture

5 Ways to Stop Shopping Right Now

This article originally appeared on Refinery29.com.

We know all the moves to the happy-shopping dance. They’re not the same for everyone, but the essential choreography is the uncontrollable shake, twist, and jump that lets everyone know that we just scored something good. But, while we’re big fans of the HSD around R29, it’s just as important to recognize when a bit of “retail therapy” isn’t feel-good or dance-inducing, but rather a lame attempt to face down boredom, anxiety, or the blues.

Emotional shopping may not always be our downfall — sometimes we’re truly looking for a specific find — but understanding our actions can help us nip this bad behavior in the bud before it becomes habit.

In an effort to understand the cause of our retail compulsions, and tackle the best reasons to back away from the cash register, we turned to a few informed experts. With their help, we can change our reactions to the first signs of impulsive shopping, so we’re not left with an empty bank account or a too-full closet. Ahead, learn when to say no, and how put the power back into your glee-filled, post-sale shimmy. Now that’s therapeutic.

2

The Bored Buy

It’s a slow Sunday night (okay, fine, Friday night), you’re suffering Netflix indecision, and your usual going-out group is nowhere to be found. So, you fall into a friendly little Internet black hole of e-commerce sites, constantly pressing “add to cart,” and before you know it, you’ve placed so many orders you’ve basically waved goodbye to this week’s paycheck.

As psychotherapist Peggy Wynne points out, the advent of online shopping — though not necessarily recent — is a huge part of why we shop when we’re bored. With the accessibility at our fingertips, “we get too much sensory overload and are triggered instantly,” she explains. “It’s sort of like online gambling or porn.” You don’t need to go anywhere and barely need to do anything to make a purchase — the satisfaction is instant, though not necessarily a cure.

3

The Solution: Dig Deeper
The best trick for conquering bored-buyer burnout is to slow down your reactions. Take a walk or look away from the screen before pressing the hovering Place Order button, Wynne advises. Practice mindfulness, don’t just pull the trigger.

In addition, we recommend you flip the script. Turn bored shopping into bored looking. We, too, have found ourselves totally submerged in a sea of e-tail tabs. And, we say, use your wandering eye to your advantage. This is your chance to perfect your eBay search terms, keep tabs on an auction item you’ve placed a bid on, track down those hard-to-come-by products, or, ya know, read up on the top trends and pieces that are actually worth your hard-earned dinero. Take a moment to make yourself a more informed customer, rather than just the most frequent one.

(MORE: Depression: A Real Life Guide)

4

The Bummed-Out Buy
You just got dumped. Your friend screwed you over. Your boss gave you the HR boot. All you want are Kleenex, a bottle of wine, and all the shoes you can find. You’ve been jilted and you deserve it!

Those shoes may not be for naught. Professor Scott Rick of the University of Michigan found in a 2013 study that retail therapy actually can lift the spirits. “Sadness, more than any other negative emotion, is associated with a sense that external forces (e.g., disease, weather) control the important outcomes in one’s life,” Rick tells us. “Shopping is all about choice, and we find that making shopping choices helps to restore a sense of personal control over one’s environment, and thus helps to alleviate sadness.” Now, shop away with your sad self, right? Not so much.

While sadness may be treated temporarily with a purchase, it also has shown that it can “increase one’s willingness to pay,” cites Rick of his research findings. Your decision-making skills may not be the sharpest when you’re blue, which can lead you down a dangerous and habit-forming path of spending beyond your means.

5

The Solution: Set Your Sights On Something New
Call us suckers for a silver lining, but we’re all about Rick’s suggestion that purchasing can give you back a little power in your life. Use it for good. And, should you find yourself in these kind of emotionally distraught shopping sprees, set your sights on good things on the horizon: that job interview you just landed, a night out with your very best buddy, a vacation that you totally deserve. Celebrate the good and screw the rest — at least in this moment — and should you make a purchase, make it one that will help steer your future in a brighter direction. You got this.

6

The Far-Flung Buy
You’re on vacation and you’ve stumbled upon a local boutique. Okay, make that severalboutiques. Problem is: You’re traveling on a budget and you don’t even really needanything, nor do you particularly have tons of space in you suitcase. But, you can only see two ways out of this situation: buy now, or face shopping FOMO when you get home.

“Restlessness, fatigue, fear and irritability can often be associated with what creates anxious shopping,” Wynne tells us. After all, if you’ve just traveled halfway around the globe, the last thing you want to do is return home with a big, ole carry-on of regret. But, all those scary what-ifs should never overpower your ability to make decisions based on your true desires.

(MORE: Why Knitting Is the New Therapy)

7

The Solution: Do Your Research
We’ll admit, this quandary is a difficult one for us. And, yes, we’ve come home from trips with suitcases stuffed before. But, the best solution is to do your research ahead of your potential fear-of-missing-out situation. For starters, stay away from labels that can be bought for less in your home town. Look for those brands that either aren’t available back home, or can only be purchased after major markups. Shopping in Paris? Stock on up drugstore labels that cost three times as much in the States. Hitting up Tokyo? Keep your eyes peeled for Comme des Garçons, Sacai, and other Japanese brands that may be less expensive overseas. Know your market, know your conversion rates, and know when to say no.

8

The Offer-You-Can’t-Refuse Buy
Three words: two for one. Why pass up a good deal when a store is basically giving stuff away? Well, because you don’t actually need a fourth pair of strappy, block-heeled sandals (even if they are marked down 70%). We’re with you on this one, but we’ve also learned the hard way that this kind of impulse-buying leads to taking home stuff we’ll hardly — maybe never — wear.

Much like bored shopping, this feeling of overexcitement also falls “under the umbrella of sensation-seeking,” Rick says. Scoring a deal can give us a huge sense of accomplishment. (Who hasn’t done a victory lap around the mall after a particularly good bargain was found?) “This [tendency to shop] also comes from wanting that inflated sense of self-esteem,” Wynne adds, “when perhaps other things aren’t going so well.”

9

The Solution: Be Picky
It’s neither easy nor fun to say no to every sale you come across, but start getting picky about when you indulge. We suggest rummaging through all those store e-mails you once signed up for, and services that alert you when an item is getting marked down. Stop buying becausean item in on sale, and start making decisions to shop when the pieces you truly want have finally hit the 50-off mark. We assure you: This kind of calculated score will be even sweeter.

10

The “Someday” Buy
Not your size, not a problem! You can — and will — lose those five pounds, so your latest skirt purchase will fit like a dream, you’ll have an important meeting to wear it to, and all will be right in the world. Or, so you hope.

While a bit of self-improvement is a wonderful thing, as Wynne suggests, living with this kind of hopefulness can make it tough to differentiate between what is realistic and what is fantasy. Rick makes a different point: “[This] reminds me of ‘commitment contracts’ where people basically make it costly for themselves to fail to meet a goal.” While expensive, too-small jeans might inspire action in some, we have a sinking suspicion that — during whatever time they remain unworn — they’ll make you feel more mopey than motivated. Investing in a way to work on feeling good now could have better emotional returns.

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The Solution: Aspire To More (Not Less)
We agree that aspirational shopping is not a bad thing — but, we say forget size matters. Focus on buying items that challenge you to step outside your comfort zone a bit, reach for a goal, or make an effort to get out more. Set exciting goals that allow you to participate right away and shop with a new sense of self in mind. And, should your new self also happen to changes sizes, well, be sure to treat her to something that fits when the time is right.

(MORE: TV Therapy: 10 Shows That Boost Our Mental Health)

 

MONEY Odd Spending

You Can Buy the Mona Lisa for $25,000

Mona Lisa by Leonardo da Vinci, oil on wood
Is it real...or is it a Mark Landis? Fine Art Images—Getty Images

It's a forgery rather than the real "Mona Lisa" by Leonardo da Vinci, of course. But the asking price is still pretty steep.

The world’s most famous portrait hangs on a wall at the Louvre. It’s not for sale, and it’s hard to imagine that it ever will go on the market. But perhaps the next-best thing went on sale this week, at a coffee shop in Manhattan’s Soho neighborhood.

The Bedford + Bowery blog reported that a painting that some are calling the “Fauxna Lisa” is hanging on the wall at the Mercer Street Think Coffee shop. This portrait is most definitely for sale, with an asking price of $25,000.

Such a sum for what’s admittedly a forgery might seem absurd. Until you learn that the creator of this artwork, while not a household name like Leonardo da Vinci, is fairly famous—even infamous—in his own right.

The remarkably high-quality forgery was done by Mark Landis, a notorious art forger who has been profiled by the likes of The New Yorker and has done copies of artworks by sources ranging from Picasso to Disney. The quality of his reproductions has been good enough to fool dozens of museums, including the Smithsonian National Portrait Gallery. Landis is also the subject of a new documentary called “Art and Craft,” and apparently the makers of the film approached Think Coffee recently with a proposal to hang Landis’s faux version of the “Mona Lisa” on the walls and sell it.

By one account, Landis completed the “Fauxna Lisa” in just 90 minutes. In a recent “Ask Me Anything” session on Reddit, however, the painter said that the reproduction of the “Mona Lisa” was the most challenging forgery he’s ever done. “It took me a whole weekend,” he wrote in response to a question on the forum. When asked how he was able to do such intricate work, and so quickly, Landis responded, “Well, it’s like a magic trick you know. If I told people, it wouldn’t be worth anything anymore.”

Surprisingly, Landis says that he has never benefited financially from his forgeries; in most cases, he simply donated them to institutions. He was busted (but not arrested) in 2010, and while it was originally reported that proceeds from the sale of his “Fauxna Lisa” were intended to go to the Lauren Rogers Museum of Art, which is located in the Mississippi town where Landis is from—and which, fittingly, was duped in the past into accepting a forgery by Landis, a museum representative reached out to MONEY and said this is not true.

[CORRECTION: An earlier version of this story reported that proceeds from the sale of Mark Landis's "Mona Lisa" forgery would benefit the Lauren Rogers Museum of Art. The museum's director of marketing said that this is not the case.]

MONEY Shopping

Walmart’s Future Might Be A Drive-Thru Grocery Store

Walmart’s newest idea actually aims to keep you out of the store. A drive-through grocery front for the big box retailer launched this week near it's headquarters in Bentonville, Arkansas.

MONEY groceries

Walmart Tests New Drive-Thru Concept in Match Made in Heaven

Honey Boo Boo and her family go Extreme Couponing
If Walmart's pickup grocery option is successful enough to spread around the country, Honey Boo and other shoppers will be able to retrieve groceries without having to go inside stores. Jason Winslow—Corbis

It's now possible to go grocery shopping at Walmart without leaving your car.

This week, Walmart started testing a new concept called Walmart Pickup – Grocery, a service that allows customers to order online from a selection of 10,000 grocery and household products and schedule a pickup time for as little as two hours or as far as three weeks in the future. The experiment is taking place at a Walmart warehouse in the northwest Arkansas town of Bentonville, where Walmart is headquartered.

By launching the concept, Walmart joins a long list of grocery services all created with the common goal of basically eliminating the need to “go” grocery shopping by actually strolling through store aisles. We’re talking about online grocery delivery options from the likes of Amazon and Instacart, as well as drive-thru and pickup services akin to what Walmart is doing, via more established players such as Relay Foods and Peapod, which work with local supermarkets and often also offer delivery. For all of the above, the big selling point is convenience, saving shoppers the time and hassle involved in the boring but necessary task of gathering of groceries.

Walmart is only testing the service in one location, but the move is noteworthy nonetheless because it’s the world’s largest retailer here dipping its toes into what many see as the future of grocery shopping. And rest assured that Walmart is learning from the experiment, and that if it’s successful, shoppers will see the pickup option spread around the country.

“Certainly I know there are folks that are thinking about that and trying to figure out ways to meet the customer’s ever changing demands,” Mitch Fevold, the grocery manager at the Walmart where the test is taking place, said to a local TV station.

Fevold explained that after customers place their order and schedule a pickup time, they pull up to a large drive-thru area with a roof overhead that bears some resemblance to a gas station. Instead of a gas pump, the customer finds a touch screen kiosk, which he taps to alert store staffers that he’s arrived and ready for pickup. “The groceries are then loaded up and the customer would actually have the opportunity to review fresh products,” Fevold said.

At least in this test case, Walmart’s pickup service is being run out of a “click-and-collect” facility, a warehouse-type building where only employees are allowed inside, rather than at a Walmart retail location that welcomes shoppers. The concept is very similar to the Zoomin Market, a drive-thru-only grocery store concept opened earlier this year in Kansas.

Also interesting: For now at least, Walmart’s service is offered at no charge above the cost of the customer’s order. That’s how competing services like Peapod worked originally too. But as of early September, Peapod, which works with large supermarket chains such as Stop & Shop and Giant, instituted a $2.95 fee for store pickup, with a minimum order of $60. Alternately, customers can opt for a membership pass granting unlimited pickup and delivery, ranging in price from $39 for three months to $99 for a year.

MONEY Shopping

New Tool Tells Shoppers Whether the iPhone They’re About to Buy Was Stolen

dusting for fingerprints
iStock

Worried that Craigslist iPhone might have been stolen? Now there's a way to know.

Buying used electronics has always been tricky. On the one hand, the prices are lower and platforms like Craigslist make shopping a breeze. On the other hand, you run the risk of buying a device that doesn’t work perfectly. And then there’s always the chance you could end up giving money to a thief — a risk that’s especially acute when purchasing a used iPhone. A full half of robberies in San Francisco were smartphone related, and similar patterns have emerged in other major cities.

Luckily for honest buyers, and anyone who doesn’t want their own iDevice nabbed, Apple has a released a tool to identify whether or not a given iPhone, iPad, or other iOS device is stolen. The website, which does not require a login, asks users to enter the serial number of their prospective purchase, and will then reveal whether the phone in question has an activation lock in place. If it does, that means either that the phone was stolen or the person selling it hasn’t correctly reset their device. Either way, it’s not a phone you want to buy.

Screen Shot 2014-10-02 at 10.20.41 AM
You shouldn’t buy a phone if its activation lock is on.

 

The activation lock is relatively new to iOS, and works by preventing anyone from resetting an iPhone without the owner’s Apple ID and password. The feature was introduced in iOS 7 and turned on automatically in iOS 8, making it harder for criminals to sell their ill-gotten merchandise. PC World notes San Francisco iPhone thefts dropped by 38% in the six months after activation lock first launched.

However, hackers have recently succeeded in circumventing the lock, making it more likely that second-hand shoppers could accidently end up with a pilfered product. Now, when you see a deal that looks too good (or too shady) to be true, you’ll be able to confirm those suspicions.

TIME How-To

Shop Amazon Smarter with These Quick Tricks

Amazon
Daniel Acker -- Bloomberg / Getty Images

Many of us have shopped Amazon for years without really digging into some of its handier features. Here’s a quick list of tips and tricks.

Get Alerts When Prices Drop

If you’re keeping an eye on a particular product, you can get alerts when its price drops. Head over to CamelCamelCamel.com, create an account and set up an alert. If the item is in stock and dips below the price threshold you set for it, you’ll be notified.

If you’re not sure what you want, you can check out the most highly discounted items in the site’s Top Drops section.

Get Alerts When Out-of-Stock Items Are Available Again

You can set up this trick directly from Amazon’s site. If an item you want is out of stock, click the “Email me” button to the right of the item’s heading.

To check which items you’re tracking, head to the Availability Alert section of your account to get an overview of which items are back in stock or to cancel alerts for items you don’t care about anymore.

Share Two-Day Prime Shipping with Someone

If you pay $100 a year for Amazon Prime — which includes free two-day shipping on many items, free streaming video, free streaming music and free ebooks — you can share the two-day shipping privileges (but not the other goodies) with up to four family members.

Head over to Manage Prime Membership, and click “Invite a Household Member.” Then enter the person’s name, how they’re related to you, their email address and their birthday. Don’t worry: You can remove people later to make space for new additions as your family bonds strengthen and wither.

Get Text Alerts for Shipment Updates

If you want to keep a close eye on that American Girl doll you ordered for yourse—err…daughter, you can sign up to receive text messages while it’s being shipped.

Head to the Shipment Updates via Text section of your account and enter your mobile number to sign up. Thankfully — or unfortunately, depending how closely you want to track the item – you’ll only get texts between 10am and 11pm Eastern time. No middle-of-the-night wakeup dings, in other words.

Fine Tune Your Email Subscriptions

You can subscribe to get emails about specific item categories sent with varying frequency by checking out the E-Mail Subscriptions section of your account. There, you’ll find everything from apps to wine, along with several subsections for each.

Re-Watch Videos You’ve Purchased

Amazon offers many of its digital videos as time-limited rentals, but if you choose to purchase a video outright, you can watch it again and again. All the movies and TV shows you own can be found in the Your Video Library section of Amazon Instant Video.

Find Items You’ve Looked At Recently

You can take a quick walk down memory lane by cruising the Browsing History section of your account. There, you’ll find a list of recently-ogled items, and can delete items you don’t want showing up in your history at all.

If you want to turn off your browsing history altogether, head over to the Manage Your Browsing History section.

Turn Off Ads That Have Been Personalized to You

Amazon uses your shopping behavior to personalize ads for you based on what the company thinks you like. You might see these ads on Amazon itself or on other websites that display Amazon ads. You can turn off this personalization by heading to the Advertising Preferences section of your account. Note that you’ll still see Amazon ads here and there; they just won’t be personalized to your tastes.

Sell Your Stuff to Other Amazon Shoppers

If you own an item that Amazon is selling, you can sell it yourself directly to other buyers. It’s a pretty quick and simple process.

It doesn’t apply to just any item, but if an item’s eligible, you’ll see a “Have one to sell? Sell on Amazon” link below the “Add to Cart” button on the right-hand side of the product page.

Click the “Sell on Amazon” button, select the item’s condition, the quantity you’re selling, and then set the price. You can upload a photo of the item, too, if you like.

If you choose to ship the item yourself, Amazon will reimburse you for shipping charges. If you want to sell a bunch of items, you can ship them all to Amazon and have the company ship items out to buyers as they sell. Regardless of your shipping method, Amazon will take a cut of each sale; the fee depends on the type of product but it usually isn’t too outrageous.

Have 0.5% of Your Order Go to Charity

Instead of going to Amazon.com to buy stuff, simply go to AmazonSmile.com and select a charity first. There are a handful of spotlight charities to choose from, but you can search for other eligible charities as well. Once that’s set up, you’ll be dropped off at Amazon to shop as you normally would.

If you see an item that says “Eligible for AmazonSmile donation” below the price on the product page, your charity of choice will get half a percent of the item’s purchase price when you check out.

MONEY

Why Angie’s List Is In Trouble

Angela "Angie" Hicks Bowman, co-founder of Angie's List Inc.
Angela "Angie" Hicks Bowman, co-founder of Angie's List Inc. Scott Eells—Bloomberg via Getty Images

Paid memberships at the local business review service Angie's List have been rising for years, and the stock just took off. Even so, reviews of the company's long-term prospects aren't so hot.

Updated on Oct. 3 at 7 pm

To anyone under the age of 30, the idea of paying for reviews or online content of any sort is probably puzzling. But for nearly two decades, the online review service Angie’s List has built a loyal, paying membership of homeowners and renters who find real value in a network where real-life people can exchange honest, trustworthy recommendations about handymen, contractors, plumbers, electricians, clean-it crews, and other services they’ve used personally.

To these folks, the value proposition is simple: When you’re considering who to hire to do a $50,000 home renovation, forking over $20 or $40 for access to reviews on local contractors is a no-brainer. Indeed, according to the company’s second quarter 2014 results, paid memberships hit 2.8 million at the end of June, up from 2.2 million a year before and just 820,000 as recently as 2011.

So why does Angie’s List appear to be on the ropes?

This week, a report surfaced that the company had hired investment bankers to explore the possibility of putting Angie’s List up for sale. Shares of the stock rose more than 20% on the news but were still down more than 50% compared to a year ago. An in-depth post by the Indianapolis Business Journal suggests why: Angie’s List, founded in 1995, has never turned a profit. A report released last October, for instance, showed the company had a net loss of $13.5 million for the third quarter of 2013, following a loss of $18.5 million for the same period a year prior.

Why hasn’t all its growth translated into profits? Much of it can be attributed to (presumably expensive) expansion into new markets; the service is now available in 253 areas of the country, compared with around 200 in 2012.

More to the point, Angie’s List has been forced to scale back the amount charged for each membership as Yelp, Google+ Local, TripAdvisor, and other user review sites have flourished with an open-to-everyone, completely free business model. The most recent Angie’s List report states that from 2010 onward, the average annual membership fee was just over $12, down from more than $36 a decade earlier.

And the amount members pay continues to drop. A Wall Street Journal post published a year ago detailed Angie’s List’s plans to cut membership fees in several key cities to around $10 annually. Today, it’s a cinch to head over to an online coupon site to find offers for 30% or 40% off, bringing the cost of a one-year subscription down as low as $5.39.

Meanwhile, the company recently agreed to pay a $2.8 million settlement to end a lawsuit alleging it had re-upped members without proper notice and at higher rates than subscribers were led to believe.

Perhaps an even bigger problem is that the trustworthiness of Angie’s List is increasingly being called into question. Critics point out that a growing portion of Angie’s List revenues come from service providers paying for advertising on the site—the same service providers that are supposed to be rated in non-biased fashion by members. “Almost 70 percent of the company’s revenues come from advertising purchased by the service providers being rated,” a 2013 Consumer Reports investigation explained.

CR called out in particular the practice of allowing advertisers with B or better ratings to be pushed to the top of search results as questionable at best. “We think the ability of A- and B-rated companies to buy their way to the top of the default search results skews the results… They get 12 times more profile views than companies that don’t buy ads.”

To be fair, many Angie’s List competitors also actively solicit the businesses reviewed on their sites as advertisers. Yelp is known to flood restaurants, doctors’ offices, and other small businesses with pleas to advertise on the site, to the point that one restaurant in the San Francisco area launched a bizarre “Hate Us on Yelp” campaign to undermine the user-review site. (Despite claims that it engages in what amounts to extortion, Yelp has repeatedly stated that advertising doesn’t affect a business’s ratings in any way.) Porch.com, an online network created to help homeowners find contractors and other home improvement services, launched a partnership referral system with Lowe’s this year. While businesses don’t pay to be listed, the website gives extra visibility to contractors that pay for a premium membership, such as making it easier to see their phone numbers in search results. (Full disclosure: Porch contributes articles on home improvement to Money.com.)

For the time being, Angie’s List seems to have figured out how low it must cut membership fees in order to keep increasing subscriber numbers. But the strategy hardly seems sustainable, especially if the perception that the service’s ratings aren’t trustworthy continues to spread. Convincing consumers it’s worthwhile to pay for a review-and-ratings service when there are free alternatives is tough enough. It’s borderline impossible to convince them that doing so is worth the money when there’s reason to question whether the ratings are entirely legitimate.

Correction: An earlier version of this story incorrectly described how Porch.com enhances the visibility of contractors who pay for a premium profile on their site.

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