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Does Buying in Bulk always save Money?

January 28, 2013 11 Comments

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Purchasing in bulk appears to be great. You get everything you desire and need and supposedly pay a lot less for them. Plus, you dont need to shop so often. This is great for those who hate shopping and love discounts. Yet, bulk buying has risks, as well. Therefore, it is time to learn about budgeting basics.

Buying in bulk

Many people believe that bulk buying is a great alternative to save money. While this seems a good way to avoid breaking the piggy bank, buying in bulk often costs individuals a lot more than they imagine.  It is not about purchasing more of a specific product to enjoy the bulk deal, but by purchasing and substituting a low-cost product. Purchasing in bulk is often known as something you do not require a lot of at a cost you cannot miss. This practice has become popular and quite widespread.

Excesses: Paying More Money

Believe it or not, people end up paying more for items they don’t even need. For instance, if your shampoo is discounted, you will find out that purchasing a huge bottle (180 oz.) will end up helping you get more shampoo at a lower cost. But, you will end up having plenty of shampoo sitting in your shower. According to experts, individuals use more than usual and go back to buy another monster bottle. What if you get tired of using that shampoo? In this case, individuals simply switch to another brand. This common problem applies to many products.

While the price per unit appears to be low, it ends up being higher. Whenever individuals are shopping around the store and find a 1 year supply of cookies for a few pennies each package, they tend to forget to determine whether they want or need so many crackers. Common signs such as “unbelievable savings” and “super deal” just help to manipulate consumers and cloud their overall thinking. People end up purchasing unnecessary items and put their groceries on their credit card. While you will pay down your card, you will not really save.

About storage and bulk purchases

When it comes to using space, bulk purchasing enthusiasts forget to consider the price of storage. Purchasing in bulk requires space. You need to place your groceries somewhere, right? Your refrigerator may not be big enough.  Believe it or not, this may force you to buy additional dry storage bins, freezers and other types of storage devices. This leads to excessive storing cost that involves a huge electricity bill for a freezer and a larger fridge.

Overweight problems: Breaking the Scale

Buying in bulk can bring health-related problems together with financial ones. Unluckily, over consumption is common within Americans. Wholesale prices appear to be majestic but simply encourage this. If you buy a huge ketchup jar staring you down each time you want to get a food item from the fridge, you will most likely find excuses to use it up. This equals more ketchup in your salads, sandwiches, the dogs food, the children lunches and so on. It is a way to justify such purchase of ketchup but, you would you have actually consumed so much if you had a tiny package?

Key dangers – Overspending your budget

Costco, Sam’s Club and other huge stores know that individuals will purchase items just because they are cheap. Whenever you walk into each store, it is easy to note a huge section of products for $1. This includes pens, novelty socks, stickers and candles, stickers. When people have a buying mindset, these items seem like fantastic deals. In the long run, you will be dragging home unnecessary things that become clutter.

What do you think about making a wrong investment in a great product that you love or need? If you are on a money diet, you might want to look at special deals. But, there is no need to purchase things you do not want or need, just because they seem to be cheap. At times, consumers end up buying the wrong item and they don’t even get the least expensive product. A bulk buy can even blow your own budget. This obviously costs a lot more up front and may cause you to fall onto money deficit during that month. Individuals think that enough supply equals savings, but it doesn’t always work out like that.

All in all, bulk buying implies that you have more of a specific product around your home. Beware and avoid overeating. If you see a huge box of cereal, you may end up having a second bowl, even if you are not really hungry. As far as prices are concerned, this is kind of sneaky. Individuals tend to fall for it more than one time. Most often, store managers know that people think that buying in bulk is cheaper. For this reason, make sure to check the real unit cost before the final purchase. In addition, look onto specifics. Many wholesale stores have membership fees. Unless you shop often, this doesn’t make sense.

Law of diminishing return

Over time, consuming same thing again and again takes the value away someway. One example I can give about our Raisin Bran cereal which SMB and I liked a lot. We got a big pack of the cereal from Costco and had to eat for days to finish the pack. For last few days we just ate it somehow. We started hating the taste so much that we had to mix other flavors in it. So while buying non-perishable food item do consider this aspect as well.

The items that we purchase in bulk without worry about the above factors

Being a two-member family we rarely go to Costco or Sam’s club. But, when we do, we buy things that SMB and I can finish in reasonable amount of time. We are rice eaters so our ‘Basmati rice’ comes in big bags. We buy chocolates as both SMB and I have sweet teeth and chocolates in bulk is a good save. Washing soaps is another bulk item we use up in time. SMB is fond of fish, mostly Salmon and Tilapia we buy in bulk and keep it frozen till we consume it fully.

We often buy personal care products and vitamins and Resveratrol. in bulk as well as we consume those daily and finish them off within a reasonable time frame. Cooking oil and nuts also we do purchase in bulk.

Readers, what other advice you may have for buying items in bulk. What is your strategy, willing to learn more from you. 

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Comments

  1. My Multiple Incomes says

    January 28, 2013 at 11:00 AM

    Buying in bulk is always good for big families or if you are preparing for an important occasion, but if you’re planning to buy in bulk and there are only a few of you at home, then you’ll be spending more money on things you don’t really need.

    Reply
    • Rob at Goose in Business says

      February 1, 2013 at 10:14 PM

      Totally agree. In our house, we don’t buy any types of food items in bulk. That also may be because we mainly shop at Trader Joes 🙂

      Reply
  2. [email protected] With a Few says

    January 28, 2013 at 3:45 PM

    We buy certain items in bulk. It does help us a lot in the long run as far as buying snacky food for kids. We will save money on trips to the grocery store. We try to buy things that we know will last and not go bad.

    Reply
  3. Integrator says

    January 28, 2013 at 10:05 PM

    Buying in bulk can be good for certain items such as diapers or infant formula in my view. Where the items are non perishable and you know they will eventually be utilized, this makes good sense.

    Like any bulk purchase, I think you need to run the numbers on what your unit cost will be. Just because its in bulk it doesn’t necessarily mean it will be cheaper. Some of the discount clubs deliberately have certain loss leaders and certain items that are marked up, but still sold in bulk. Doing a comparison scan in the shop for a specific items (or in advance) can be the best way to make sure you have still got yourself a good deal.

    There’s also the convenience aspect of having the item on hand vs having to run out to buy it at short notice thats a big plus with bulk buying, particularly for essential kids items.

    Reply
  4. Buy & Hold Blog says

    January 29, 2013 at 3:21 PM

    Great post. We shop at Costco for the quality and prices. But, everytime we review our spending, we consistently find that we spend more at Costco than any other store we shop. It is probably because we’re buying items in bulk, but it always feels like we’re spending more. I do agree on the dangers you mentioned of buying in bulk.

    Reply
  5. Brett @ wstreetstocks says

    January 29, 2013 at 10:06 PM

    Great post! I don’t think that buying in bulk saves money all of the time. Sometimes it can be a way for a retailer to make more money off of people who only buy in bulk.

    Reply
  6. Rob @FinancialSprout says

    January 30, 2013 at 5:13 PM

    I came from a big family, so we always bought in bulk, and it saved us gobs of money. I do agree that if you have more you will consume more, but take into consideration the gas money it takes to get the goods. It’s one of those things that isn’t good for everyone.

    Reply
  7. Julie @ Freedom 48 says

    January 30, 2013 at 10:02 PM

    We do visit Costco occasionally (although I try to limit visits… since I never get out of there spending less than $100). I find some things are great deals… like cat litter! Other items are not a great deal when compared to other stores sale prices – plus, you’re forced to buy such a huge amount… you better make sure it’s something you like (and will use it all up!)

    Reply
  8. [email protected] says

    February 2, 2013 at 1:33 PM

    Buying at places like Sam’s Club is very similar to keeping to a budget. There are temptations everywhere. You have to be disciplined enough to not buy things you don’t need no matter how attractively packaged or priced they are.

    My husband does the shopping at Sam’s and he sticks to the list totally. We are only 2 people, but we buy enough items we use all the time that make the membership price worth it to us. We buy nuts, toilet paper, laundry detergent, kleenex, vitamin pills, Cherrios, and dried fruit there. Sometimes we buy fresh fruit, but you have to check it for freshness. My husband knows prices and will switch to buying an item at another store if it’s a better price. We eat the same cereal for years, so there’s no chance of getting tired of it. (I know, we’re boring.) He buys generic bran flakes at Walmart for about $1 a box and can’t beat that price anywhere. I stick to the same shampoo for years also, so we get it at Sam’s. If I would get tired of it, I’d have my husband use it because he will use any kind.

    What you say about storage is true. We bought a chest freezer at Sam’s and keep good meat deals in it. We also bought a mattress there that we are very happy with. Shopping at a warehouse club won’t force you into foolish spending, but you have to keep your plan in mind!

    Reply
  9. Kylie Ofiu says

    February 2, 2013 at 8:53 PM

    I buy certain items in bulk, but now it is just my daughters and I, I don’t really buy anything in bulk.
    My exception is stocking up on make up and a few other items when I visit the USA because it is 1/4 of the price I pay here. As for food and every day items, I just look out for special deals so I never pay full price. I am sick of storing bulk items, so now just have on hand what we need and I have found we use less and make things stretch further.

    Reply
  10. Mrs. 1500 says

    February 4, 2013 at 12:23 PM

    We buy in bulk, but only items that are a good price, that we will use before they go bad, and that we need.

    We shop at Costco, and I have found that most of their products will beat the grocery store prices. Not all. They usually have raspberries in an 18 oz size for the same price that the local store has for the 8 oz size. Definite savings there, especially because I know my daughter will devour them in about 2 minutes. Their prices can’t be beat on spices, milk, some produce. Their prices are not good on diapers, but their wipes, while not the cheapest, are the absolute best baby wipes, and I am willing to pay the premium for the product.

    Sometimes, I buy for convenience. I buy toilet paper and tissues at Costco because I want to never run out of either. Costco sells the largest boxes of tissues I have ever seen, and at a fairly good price. We have a box of tissues in every room, because our family has allergies and uses a lot of tissues. I ran out of toilet paper once, never again!

    Reply

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