Tuesday, January 1, 2008

Economies of Scale

I'm not frugal. I'm cheap. And I married another cheapo. Today my wife got 5 pairs of pants at the local thrift store. But sometimes, comparing what things cost makes me crazy. Like tonight--at dinner out with my sister and her husband, we got into a conversation about whether to have a $1.99 or $4.99 dessert. Somehow having the $12 steak seemed extravagant compared to the $8 burger, but the dessert seemed no big deal. I rationalized that the 3 bucks was less than a happy meal (or about the same as a large Starbucks coffee), and I definitely figured I'd enjoy the bigger dessert that much more. In the end, cheap won out, though--Mrs. Sal and I split the $4.99 one, so it was only 50 cents more apiece.

On a similar topic--Applebees overcharges obscenely for iced tea. $2.19--for a GLASS of TEA! I didn't want a beer--but if I had, it would have been cheaper. Now, how is that possible? A six-pack of domestic beer costs $5-6. So each 12-oz bottle is maybe a buck, and they mark it up 100% to $2. You can buy enough tea bags to flood Boston Harbor for 3 bucks, and cold water comes out of the tap! How the heck do they get away with that? There's more profit margin in the tea than the entree!

I guess since I shelled out extra for dessert, I shouldn't let the tea bother me. But when you're a cheapo, things like that really rankle. At least we got "free" refills!


C. S. Fox said...

Dude! I have always idolized you with the economics thing! But they charge high for the tea because the refills are free. I know that when we get together we can drink a boston harbor full of tea..
Beer? Well I have retired from that.
And beer is cheaper by the 6 pack at the store....
I know! I still have my last 5 of my 6 that I bought in late 2006....
So. Check me out at Fox Family Shorts.... Maybe you have some tips?

Goode Design said...

Sal, here I think i can offer a few tidbits that work well for my wife and me.

1. restaurant.com. The gist: you pay $10 for a $25 dining certificate to sponsored restaurants in your area. Typically, your bill has to total $35 to qualify...

The math:
Bill: $35 - $25 = $10
+ initial $10 purchase of certificate = $20 for a $35 meal... ok, here's where it gets interesting...

Restaurant.com is one of very few sites you should sign up for their email list. They will send you discount codes to their site (sometimes multiple per month). Typically they are 50% discounts but can go as high as 70%

50% math:
$ 35 bill
-$25 discount
+ $5 certificate
$15 for $35 meal

or 70% math:
$ 35 bill
-$25 discount
+ $3 certificate
$13 for $35 meal

Rebekah & I purchase loads of these to give for christmas. I can spend $9 per person at Xmas and give $75 worth of dining... and these are moderate to nicer restaurants.

2. Tea vs. Cost... well, I'm an avid sweet tea enthusiast. You could even say I'm a connoisseur. But when economics are involved, consider what Sweet Tea does... It literally runs straight thru you. There's little benefit to those calories. I mean, if you actually can hold them long enough to burn, you've accomplished something.

Consider a Glass of water. does approximately the same thing (goes straight thru) but now it's free and you could possibly justify getting a $4 desert... dessert.... the one that's not a sand pit.

A friend once calculated what he figured the average savings of drinking water over the average cost of a "beverage" at a restaurant would be... I think it was almost $2000 in a year.

3. Can anyone say: Steve & Barry's. look, i know some clothing needs to have real money put into it. But Tee shirts & shorts (particularly for camp) should be a minimal purchase. I went to S&B's and bought a wool peacoat, a winter coat, 2 outer tees and a polo for $50... all BRAND NEW. Each item was $8.98... yes, the peacoat was $8.98... even if i had bought it alone. I love Steve & Barry's.

4. If you want a list of places to save money... visit a list i've concocted: http://goodecents.blogspot.com (skip past the Cookies link list)

MichaelPolutta said...

I believe that restaurants make more profit from beverages than they do from entrees. It certainly wouldn't surprise me. That said, that is a ridiculous price for tea.

Then again, I'm sure all the soda companies were THRILLED when bottled water took off. I often see Dasani and Aquafina (Coke and Pepsi products, respectively, which are just filtered tap water!) that cost as much as (or more than) Coke and Pepsi. "So, let's see, we can charge more for just water than we can for water with stuff in it? EXCELLENT!"

Goode Design said...

Well, sweet tea is the nectar of heaven.