Thursday, March 15, 2012

The Pros & Cons of Buying Bulk, and How to Make it Work For You

The lure of bulk buying

The draw to buying in bulk seems to have increased lately, as shoppers (like me) feel the pinch in their wallets. Deciding if buying in bulk is for you can be tricky...And understanding the positives and negatives are important. Avoiding traps if you DO decide to buy bulk is also essential! Let's start with making the decision to buy bulk. 



My family buys bulk for a few specific items, and only if the price per unit cost is less than what I can get with my couponing abilities - this is where keeping track helps! The key to buying bulk is to know when to buy, and when not to buy.  It’s not always the best move. But if you are smart, you can avoid the con's and reap the pro's, saving money as you go. Let's assume you have made the decision to buy bulk for some items. It was an easy decision for us, since *MH* works third shift for the Wal-Mart/Sam's Club company - they offered him the Premium membership ($100 cost) for $30, and deduct $2 per month from his paychecks to cover it. We go once every two months or so, and only after checking prices online first!



I avoided the Membership issue, but not everyone is going to have a family member discount. So, write up a list of your most-consumed items,like toilet paper, and figure out how much you spend in a month. Multiply by 12, and you have your approximate yearly cost on bulk items.
Now, check your wholesale club bulk cost, and determine how many you will use in a year. How much is it? Would you save money by buying bulk in a wholesale club, or should you continue buying with coupons and stockpiling as you go?
at .21 cents a roll, we can do better this time
The next issue is storage. It is important to not let your bulk buying and stockpiling take over your home! Plus, clutter will lead to stress, which is just not worth it. We held off on buying bulk until we moved from an apartment to a town home...I will probably upgrade my storage when we get our Forever House. But for now, we use a wire shelf organizer in our coat closet, and a deep freezer in the garage.

You also don't want things to expire before you use them! This goes hand in hand with a lack of variety...no one wants to eat the same things over and over. Except my daughter (and *DH*, who is a high functioning autistic adult and needs  repetition to calm his nerves). I buy their favorite snack foods in bulk, and individually bag them with sandwich baggies. Some brands now individually package servings for wholesale clubs now, so this is less of a problem than it used to be. Some things it will never make sense to buy, like 6 packages of hot dog buns for a family of 4. Unless we are having a big BBQ party, there just isn't a need!
*Bulk buying is GREAT for saving money for big summer parties*

You can see that buying bulk doesn't make sense for small households or individuals, in most cases. Plus, the clubs usually only allow their own coupons (if they offer any) and rarely have sales. You will also pay more money up front, for the lower per unit cost.

You should view your stockpile/bulk purchases as an investment, of sorts. Let's use laundry detergent as an example. I can get a name brand 50 oz bottle for $8.99. If I buy 6 bottles, I pay $5.00 per bottle. I have to pay $30 for my laundry soap today, but I don't have to pay a higher price per bottle later on, if I run out unexpectedly and the item is not on sale.
That is a savings of 44% PER BOTTLE. That sounds great until you realize you are essentially investing your money in detergent, and your money could do you more good invested in something else. Plus, as you use up your detergent, your investment return shrinks as the amount of soap shrinks. What would a 44% return get you in stocks, or even a low cost Certificate of Deposit? Not likely you will find something like a CD with that return, but the point remains the same.

Could your money be better invested? Make the decision that is right for your budget, your home and your family.