AskDong

I was hoping to pick up a copy of Wii Fit yesterday on it’s North American debut. I had no such luck. Wii Fit is generally sold out at most retailers to my great disappointment. It looks like I’ll be repeating my Wii hunt of 2007. I’m not hugely suprised by the shortage of Wii Fit, but I am more astounded there are still shortages of the Wii almost 20 months after the initial launch.

Wii Fit retails at $90, but if I were to buy it now from less savory sources I would have to pay as much as $250. I’m not paying that extra premium. While I’m certainly not supportive of people and companies somehow jumping the line and hoarding items only to resell them, I can’t blame people for pricing a product at which it’ll sell.

I’m biased by the nature of the industry I work in, and my study of economics. I’m a strong believer in price. Price is agnostic, and price is what ensures the markets work properly. If people are willing to pay $250 for Wii Fit, that gives Nintendo incentive to produce more. Pricing it at $250 also dissuades someone like myself from going and buying the product. The price balances the market.

The efficacy of price is the clearest in the commodity market such as oil, copper, and natural gas. By it’s nature a barrel of oil from one producer is indistinguishable from one produced by another. I’m fudging a bit because crude does have different grades, but for the purpose of pricing the basic commodity the variation between West Texas Intermediate (WTI) and Dubai are inconsequential. While Nintendo may not have a monopoly on video gaming, it does have a monopoly on the Wii and Wii Fit.

In the world of oil, the closest thing we have to a monopoly is OPEC, The Organization of Petroleum Producing Countries. While they have influence, it would be foolish to think they control the oil market. OPEC learned it’s lesson in 80s. Other countries start producing more oil, and consumers started consuming less. As much as it hurts the pocketbook, high oil prices are part of the solution. However this time around, I don’t believe Oil prices will fall to 1980 levels. Many non-OPEC countries are tapped out - the North Sea is about dried up, and other such as Russia are not so eager to see prices come down. Demand management, especially in Developed nations such as the U.S., will be critical lever to keep things in balance.

I’m not the mightiest of bargain hunters. In animal kingdom of bargain hunters, I’m probably a badger - an omnivore that predominantly preys on pocket gophers.  I don’t go out of my way for bargains, but at the same time I want to try to get a better deal when I can.

Last night I was helping my girlfriend shop for a hotel.  She’s going on a trip to Puerto Rico with one of her friends this coming weekend.  I recommended that she stay at the Marriott Hotel and Casino in Coronado.  Last year at my friend’s Bachelor Party, we stayed at the Radisson around the corner, but we actually hung out at the beach at the Marriott.  The Marriott has a nice beach front, pool, and outdoor bar.

My girlfriend looked online to book the hotel, and could only find an average nightly rate of $270/night which was much more than many of the other hotels in the area including the Radisson.  The previous year I had asked at the desk about rate and was quoted a rate in the $170 range.  My first couple Internet searches returned the rate she was seeing. Generally speaking, I expect the different travel portals to return approximately the same rate.  I usually don’t usually bother with the individual portals but go through aggregator kayak.com.  What I expect to vary is the hotel selection, not prices.

Though after a slightly more exhaustive search, I found that Travelocity had the hotel for less than $200/night. Not a great rate, but quite a bit better than what we were finding before. The average rate would’ve been lower had all the nights been in May.  As is there was one night in April.  In my experience May and June are two of the better months to go down to the Caribbean, especially May. Both months are only slightly past peak season, but not in the dead heat of summer. Prices and crowds are both much better.

I was very surprised to find that the major travel portals quoting very different prices for a major hotel chain. I had never encountered this before. I’ve encountered different prices, but usually in some kind of special package promotion. I guess it always pays to make a thorough search.

The Financial Times had an article about a rumored iPod that would “come with” music. This would be a big step for Apple as Steve Jobs has been habitually opposed to the subscription model for music. I’ve personally been opposed to the idea of subscriptions as well. I’ve always thought that owning must be more cost advantageous. But is it really?

Music subscription services such as Napster charge $12.99 a month for unlimited access. iTunes charges me 99 cents a song, or $12.99 an album. Subscribing to a music service is like buying an album a month. On average consumers spend $40 per person a year on music. That number however reflects an overall decline in music sales that has been driven file sharing. So, let’s just assume annual spending would be closer to $50 if not for file sharing. Subscribing to a music service works out $156 annually which is definitely more than what the average consumer spends on music. Also if you cancel your subscription, you’re left with nothing. Hence, Steve’s point that people want to own music.

As I get older and my own mortality is more apparent I become less and less opposed to subscription models. After all, when I own I’m really renting for the rest of my life (disregarding the value of passing property to heirs - and I don’t think heirs if I have them will want to listen to my music or be even own a CD a player). That ownership “rental period” is getting shorter with each passing day. So the real comparison is to look at what the cost of “ownership” if I were to subscribe to the music services. Assuming that iIve 40 good years left of listening to music, I come up with a lifetime cost of $3010 assuming a 4% discount rate. Would I pay $3010 to own all the music I want?

The reality is that answer for own vs. rent really depends on the individual. I think both models can make sense, but I do believe the current model of $12.99 a month is too expensive for most individuals. Record companies as usual are being to greedy. They want consumers to spend more money than they would otherwise spend buying music. I believe if that they lowered that cost to $5.99 they would have a lot more subscribers. I also think Apple is being inflexible with it’s unwillingness to adopt a subscription model. There are plenty of people who are happy to subscribe. I think the ideal model would be some type of subscription model where there’s the option of keeping a few tracks to own. I also believe a subscription model where the latest tracks are not available at a lower price could make sense.

Citibank is no Eddie Money, but they are offering two free airline tickets for opening an account with at least $25,000. I first heard about this at My Money Blog, but didn’t think much of it since I already have a Citibank Account with a full complement of savings accounts. However, today I went to Citibank to make a deposit and the teller told me that I could still qualify for one free ticket by merely opening or depositing the amount into a money market account. Jonathan has since updated his post to reflect that existing customers do qualify for the promotion.

As I was about to make the deposit, I was told my current account did not qualify. I had originally opened the account via the now defunct Citifi and as a result the account was technically based in IL. Citifi was Citibank’s online banking offering to compete with the online banks that were all the rage in 2000. Citibank quickly realized there was no reason to differentiate it’s regular banking services from online banking. All they had to do was offer online services to it’s standard bank offerings. Because my account was based in IL, I couldn’t simply deposit the check into that account. Apparently the money had to be deposited to a local account.

I thought I was out of luck again, but I was quickly shifted over from a teller to a personal banker. The banker (I’ve never worked with a banker before) told me that I could still just open account and qualify for the free ticket(s). Since I did enough business with Citibank to make me eligible for a CitiGold account, I opened that. I still have to make 2 online bill pays in the next three months and maintain a 25k deposit in the money market account.

CitiGold is Citibank’s private banking and wealth management services. I’m hardly the type of individual you would think would qualify for such an account or services, but across all items such as mortgages, investment accounts, CDs, savings and money market accounts, I do quite a bit of business with Citibank. I was pleasantly surprised to qualify as there are a number of perks including a specific banker to work with. Two years ago I would’ve shrugged off the idea of working with someone as I’ve almost always done things myself and online, but being a little older and wiser I realize calling customer service is really not all that fun. Now, I have someone who know’s my name who I can email and call directly if I have a problem. That’s valuable. I can still choose to close the account in 6 months after I’ve received the Thank You Points good for one (or maybe two) free tickets.  Plus, they even gave me free gift at the bank.  I didn’t get a toaster though, just a branded mug.

The biggest drawback is that I now have yet another checking account, making my total number of bank accounts a rather unwieldy five. My “banker” tells me that after being a CitiGold account that I’ll assuredly close at least my other Citibank account even though I have everything linked to that account currently. I’ll think about in the next a couple months and if I find that I’m committed to the idea of having a CitiGold account at least I’ll be able to make the transition slowly.

I’m in the process of switching my Internet connection to DSL.  Currently I’m reduced to using my mobile phone as a modem.  I also gave my Dad my old wireless router since he needed one, and I usually manage to snag better deals than my Dad can. Yes, we’re still talking even after I criticized him for his selection of toilet paper.  I was hoping to pick up a new 802.11g router for less than $20. I was disappointed that cheapest router I saw at MicroCenter was $29.95. In casual conversation I mentioned to a few friends that I was looking to buy a new router to see if they had any recommendations. One these friends emailed me yesterday a link to a $5 router at CompUSA after rebates. This deal is only good for a purchase made before December 8th, 2007.  It’s one of those quick one week promotions.

I also made a purchase from Red Envelope with a $50 off promotion code. I almost didn’t use this promotion code, ETHNOL, not because I forgot about it, but because I didn’t have it until about a minute before checkout. Most online retailers such Red Envelope, Amazon, Buy, Overstock, etc. all allow you to enter a promotion code if you have one.  If you don’t have one, you don’t need to wait for next Sunday’s circular.  Just do quick Internet search for coupon codes for the retailer that interests you.  Websites like Coupon Cabin, and Coupon Chief quickly appear with lists of coupon codes to use.  Don’t take the first coupon that catches your eye.  Take some time a poke around and look for the best and most appropriate coupon.  The first coupon I found was for free shipping which would’ve saved me $8.95 - not enough to get excited about.  However after a minute of poking around I was able to find the $50 coupon for a purchase of $200 or more which fit the bill quite nicely.  As there are a number of promotions and coupons at any given time, it’s important to look around for the one that best fits the shopping situation.

I’m not a consummate shopper.  I don’t buy very much stuff in general, and tend to get alerted to deals by more astute consumers amongst my friends.  If you are buying something, it’s almost always worthwhile to do a quick online search for deals, and coupons. Five minutes can save you over $75 bucks as it did for me.