Outlet Malls and Factory Stores: Deals or No Deals?

En español | Harold Alfond, founder of the Maine-based Dexter Shoe Co., had an entrepreneurial epiphany in the mid-1960s. Rather than continue to sell the occasional pair of slightly irregular, "factory-second" shoes manufactured in his plant to jobbers — who in turn marked them up exponentially and sold them to the public — why not cut out the middleman and sell the defects directly to the public himself?

See also: Find free stuff online.

With that, the concept of the factory outlet store was born.

The idea soon proved to be almost too popular for its own good. With Alfond opening more and more of his log cabin-style Dexter Shoe outlet stores throughout New England, public demand for his factory seconds became so great that his factory couldn't keep up — they simply weren't making enough mistakes! So he then also began stocking discontinued styles and other merchandise he couldn't sell in his outlet stores, all at rock-bottom prices. Before long, manufacturers of all types of consumer products were following Alfond's lead and opening factory outlet stores of their own. And soon entire shopping malls of factory outlet stores began springing up across the country.

— Photo by: Stephan Savoia/AP

Although I've never shopped at a Dexter Shoe factory store, my family started shopping at factory outlets in the early 1970s, when they were still the cool new thing. In fact, I grew up wearing only Jockey brand, factory-second briefs that my mom would dutifully buy for all of the men in our extended family on an annual pilgrimage to the Jockey factory outlet store.

I still occasionally visit a factory store or outlet mall, but over the years I've noticed a lot of changes at them. Like many of my cheapskate friends, I'm not convinced that they're still the bargain meccas they once were, although you can still find some good deals at outlets if you're a smart shopper. Here's what you need to know:

Next: Always, always comparison shop. >>