Does Buying in Bulk Really Save You Money?

As you search for ways to reduce spending, your food budget understandably is a focal point. You may have heard that buying in bulk is a great way to reduce the regular cost of your groceries, but is this always the case? The reality is that bulk purchases can save money when you do it strategically. However, if you are not careful, you could wind up spending more on groceries than you otherwise would.

With the cost of food and other household items on the rise, a trip to the grocery store can be very costly. In order to cut costs, many people turn to buying in bulk at places such as Sam’s Club, BJ’s Wholesale Club, and Costco. But bulk does not always mean cheaper, and there are several costs and factors you may want to consider before becoming a bulk warehouse member. We’ll talk about them in detail below!

When Buying in Bulk Makes Sense –

Bulk purchases are ideal for products that you have an ongoing need for, such as toilet paper or laundry detergent. If your family normally eats a lot of a specific food and if that pattern likely will continue, a bulk purchase of non-perishable items may also be a great idea. In order to determine if this will actually save you money, look at the per unit or per ounce price. Most grocery stores include this information in the corner of the label on the store shelf so that you do not have to run the calculation yourself. Buying larger quantities of items does not universally cost less per unit or ounce, so you should habitually make this comparison to identify savings opportunities. You also should explore other savings opportunities, such as through coupons, to determine which option is most affordable.

When to Avoid Bulk Purchases –

Even if the price per unit or per ounce is lower when buying in bulk, this may not always be a great idea. Consider that some foods may spoil before your family has the opportunity to consume them. While meats and bread products can typically be frozen, milk and other dairy products cannot. In addition, you should only buy bulk groceries if you have room available to store these items. You may be able to find more storage space for dried goods and non-perishables in your pantry or even in your garage in some cases, but space in the fridge may be in short supply.

PROS:

Price per unit – This is the biggest benefit of buying in bulk. Almost always, when you buy in bulk, you’re saving money per unit, which adds up to real savings over time. Of course, this isn’t always true, so make sure to check out the price per unit before buying. Generally, you will see these savings in the form of a lower grocery and household supply bill in any given month. Here are 15 items that are good bulk purchases: http://money.usnews.com/money/blogs/my-money/2014/03/18/15-items-always-worth-buying-in-bulk

Less repetitive effort – If you purchase toilet paper in bulk, it often comes as a bundled set of nine packages of four or six rolls each. Thus, each time you need toilet paper in the bathroom, instead of going to the store, you just grab another pack the next time you happen to be near the storage room in your house.

Fewer trips – Buying in bulk means you are saving time as well as money. With having bulk items in storage at your home, you can make fewer trips to the store for these non-perishable items. This will also save you more money because it saves on gas for your vehicle.

Name brands for cheap – Many warehouse stores carry their own brand name items which are almost identical to the expensive brand names found in grocery stores. All you have to do is read the labels, ingredients, and then compare the two. Most stores will also carry the expensive brand names you are used to but at a reduced cost. It’s worth trying a few different brands to see if you like them. This can help maximize your savings effort.

Helps you Go Green – A major advantage of bulk buying is that it actually shrinks the carbon and energy “footprint” on the product packaging. So it helps you save money and the environment at the same time! Check out this Infographic to find out more: https://www.pinterest.com/pin/527273068844915203/

CONS:

Storage space – If you buy lots of stuff in bulk, you need storage space to maintain it, and this can be a serious issue for some. If you live in an apartment, then chances are your storage space is going to be limited. Make sure you think about that before you buy anything in bulk. If you live in a nice sized single-family home then check out your garage, basement, closet space, etc. for places to store your bulk items.

Annual membership fee – Most bulk buying stores like Sam’s Club and Costco have annual fees. A typical annual membership to Sam’s Club is around $45 per year, and a Costco membership is around $55 per year. Yes, membership is required, and at yearly fees that are worth taking into consideration. What’s the cost of membership at your local grocery store? Answer = Free.

Shelf-life – Some items don’t last forever, so buying them in bulk is a poor choice if you’re not going to use them frequently. This is particularly true for many perishable food items, which simply do not last for a very long time. There’s also potential concern about items in storage facing damage due to environmental concerns, like water damage or freezer burn.

Variety – Often, when you buy something in bulk, there is limited variety – you use the same exact thing over and over. While this is fine for utility items, for other items (like many food items) variety is something that’s quite important – and it’s difficult to get variety in bulk.

No sales prices at warehouse stores – Everyone loves to save money; so of course, we all love a good sale. However, bulk warehouses offer far fewer sales and promotions than grocery stores, and often times they do not offer sales at all. So although you may be saving money by purchasing large quantities, it is worth considering sale prices at your local grocery store versus the cost of buying in bulk from a warehouse.

Will you use the entire product – Buying certain items in bulk can end up being wasteful. If you purchase bulk produce or other perishables unless you have quite a few mouths to feed, many of these items will likely end up spoiling and going to waste, and you will ultimately have paid more than if you would have purchased a smaller amount. And perishables aren’t the only items at risk of going to waste. Some people choose to buy items such as cleaning products in bulk. This can become a problem when people choose to try a cleaner they’ve never used before. When trying new cleaners or detergents, there is always the risk of allergies, undesirable smells or even poor performance. There is little sense in purchasing a new cleaning product in bulk when there is a chance that you might end up pouring the cleaner, and your money, down the drain.

Not only do you run the risk of items going to waste when buying in bulk, but you often times run the risk of sacrificing quality and variety for quantity. Yes, when you buy in bulk you get more items at a very low cost, but when it comes to products such as meats and bakery items, more often than not, they are not the best quality, they don’t have the best flavor, and they don’t keep as well as fresher, higher quality items. When it comes to variety, your choices are limited when buying from bulk warehouses, as they often times only have a few brands – or even just one brand – versus the wide variety of national brands, store brands and local brands found at your area grocery stores.

Don’t forget travel time and gas – Travel costs can sneak up on you when buying from bulk warehouses. Lack of variety may mean an extra trip to the grocery store to find what you are looking for, and extra trips mean extra traveling time and extra gas. It is also worth considering that there is often only one bulk warehouse per region so you may have to travel 10, 20 or 30 miles just to get to the warehouse rather than a quick trip to your local grocer.

Conclusion:

If you intend to use bulk purchases as part of your plan to reduce your food budget, remember that you will need to begin this process by stocking up. This means that you must make a large purchase upfront in order to enjoy ongoing savings in your food purchases for the next few weeks or longer. You also will need to plan ahead so that you can replenish your bulk items as needed in the weeks ahead.

Buying in bulk always works best for non-perishable items, such as toilet paper, toothpaste, and so forth, and for some staple dry food items with a long shelf-life like rice or beans. However, if you don’t have storage space for it or you’re not highly confident that you can get through the product without it going bad first, then you’re probably better off not buying the bulk version and instead buying smaller versions. This is a great guide to buying in bulk: http://www.thesimpledollar.com/buying-in-bulk/

If you are considering membership at a bulk warehouse because you are hoping to cut spending, first consider contacting the certified credit counselors at Advantage CCS. The call is completely free and confidential. If you need to cut costs or set up a budget, there are several options available to you. A certified counselor at Advantage can look at your current financial situation to help develop a budget management system tailored specifically to meet your goals and needs.