Find something you want on Amazon (not kindle books, womp womp). I'll use this treadmill that I want to get one day. Copy the URL.
Then go to camelcamelcamel. Now, paste the URL in the search box at the top of the page. The page will load with information about the product.
Scroll down to see the price changes - it will show the last 5 price changes on the right, and on the left you have the highest, lowest etc.
So basically, I can see that the lowest was $276, but that was well over a year ago. The price right now is good, at $287 but just a couple months ago it was almost $150 higher! That is ridiculous. If I want something, I will often check camelcamelcamel and then wait for the price to drop, or if I really want it / need it immediately, then I just make sure the difference between the lowest price and what I'm paying isn't crazy.
So now what? Don't worry, you don't have to check camelcamelcamel every day. Scroll back up the top. I personally only really buy from Amazon and rarely use the 3rd party option, so that's where I track my price. When you go to enter your desired price, a little pop up comes up showing you the best price, and other prices based on percentages. You can go off this if you like, but I normally put in a little above what I want to pay.
This is a bad example, because the current price is so close to the lowest price. But let's pretend it is May 2015 and we can see that they want $400 for it, but a week earlier it was $287. Camelcamelcamel just saved you over $100. All you need to do is enter the price you want and then tab over a couple and enter your email address. You'll get a confirmation email, and then if/when the price drops you will get another email. You can also use twitter if you want.
I know if you keep things in your amazon cart it will let you know things have changed price, but I find this a lot easier than that.
Another handy thing about camelcamelcamel is that you can also click on the 'top price drops' tab to see the products most heavily discounted in the last day or 7. Also, you can sort by category, which I think is brilliant.
Oh, and if you create an account, you can see all the items you are tracking in one spot. I find this super handy because I often forget what I have set up a tracking thing for. All of my desired prices are based on previous prices, or what I simply want and hope it will eventually go down to (for example, The Royal We has never been recorded that low, but I don't mind waiting). It's also good because something might be super close to your desired price but you won't get an email because it's not quite there - but if I'm wanting $20 for that set of Jane Austen novels, I'd pay $21 or $25, you know? So it's good to be able to see it all in one spot.
I should also mention that you can simply install the camelcamelcamel plug in and you don't have to do the whole manual shebang that I just went through, but I personally like doing it this way.
Needless to say, this is in no way shape or form sponsored. I'm sure lots of people know this already, but just in case, it can't hurt to share, right?