Does Bulk Buying Really Save Money?

buying in bulkEveryone loves to save money when shopping, so it’s no surprise that membership at warehouse stores like Costco and Sam’s Club has soared over the last few years. In fact, from 1997-2002 shopping in club stores increased by 231%*!

Though this type of shopping has become very popular, it’s important to ask, “Is bulk buying really saving money?”

Here are some things to consider before you begin buying in bulk.

Consider Price Per Unit

Big box stores are guilty of using the popular marketing ploy “the more you buy, the more you save,” but in order to find out if you are really saving money by shopping at these stores, you should analyze the price per unit rather than the total price you see on the shelf.

For example: If canned tomatoes at your grocery store cost $.55/can and there is a 10 pack of cans at the big box store for $6, you are actually spending more per can at the big box store ($6/10 cans = $.60/can).

Of course there are other things to consider as well, like the quality of the goods and quantity of the goods. If the canned tomatoes at your grocer are off-brand and the ones at the club store are brand name, the ones at the club store are probably cheaper per can than the name brand ones at your local grocery store.

Consider Your Time Investment

Some items may be cheaper at big box stores, but if you only need a few things and the big box store is 30 minutes away, it can be cheaper (time-wise) to go to your local grocer. Time is money. I know I wouldn’t want to use more time and fuel driving across town to get two things.

Consider Your Space

If you live in a small one-bedroom apartment, what you can buy is limited. Even those living in large houses have to draw the line somewhere when it comes to how much they are willing to store. Not only should you consider how much actual space you have to store bulk bought items, but you should also consider the opportunity cost of what else could be occupying that space. For example, lots of “extreme couponers” give up garage space to store huge amounts of food and household goods worth maybe a few thousand dollars, instead of protecting their $20,000-30,000 car.

Don’t get me wrong; there are plenty of times that shopping at big box stores and club stores can save you lots of time and money, especially if they are one-stop shops with groceries, home goods, a pharmacy, etc. But, that doesn’t mean your first thought should always be to pass up the little guy with slightly higher prices in favor of your club store.

*According to the 1997 and 2002 economic censuses performed by the U.S. Census Bureau

Photo Credit: mandritoiu / Shutterstock.com