Has it occurred to you that consumers are seeing unusually good deals on selected retail items, and even on some second-hand market items?

It’s Economics 101: supply and demand.

The Associated Press reports (link at MSNBC) that retail sales fell for the fifth straight month in November.

When people aren’t working, they aren’t spending as much money – or shouldn’t be.

The problem that is currently affecting the supply side is that retail purchase orders were made way in advance of recent layoff notices. Basically, the stores expected more people to be able to purchase their goods.

Consumers are still buying household and family necessities – but they aren’t buying a lot of extras right now.

And when merchandise isn’t moving, stores are marking the prices down. In some cases, WAYYY down.

This is a rare set of circumstances that will dry up as soon as the supply side settles out. Given the reports that the economy is getting worse, store managers will be far more selective on inventory choices for the coming weeks and months.

On the second-hand market, a lot of people are trying to sell stuff in hopes of making quick cash. Garage sales, classified ads and Internet auctions have been a long-standing fundraising tactic for families who are struggling with finances, or plan to move to a new home soon.

But with so many families now in that situation, auction bids and rummage sale prices for second-hand items are pretty low in some categories. That means buyers are willing to wait for the next opportunity if the price seems high in comparison to the market conditions.

What does this mean to you, as a consumer?

• Don’t pick up a bargain item if you don’t need it or can’t use it. It’s a gamble to plan on reselling that item for a profit at a later date, even during normal economic circumstances. I’ve seen dealers stuck with inventory for two or three years that they can’t unload at collector shows.
• Do leave yourself some cash flow wiggle room to allow for unexpected deals. I am currently setting aside $10 or so out of each paycheck as cash in my wallet so I can follow up on a grocery or drugstore sale that gets announced mid-week.
• If you stock up on routine household purchases during times of low prices and discount offers, you will come out ahead in the long run. This is a particularly smart move for those of you who expect lower paychecks or unemployment in the coming weeks and months. I really did buy 10 boxes of cereal on one shopping trip because I had coupons, a sale and two rebate applications to follow up on. And I also knew we would eat up the product before it expired.