Bulk Buying Lets You Save More (Just Not Always)

It’s no secret that buying in bulk gives you more savings than when buying per piece. You don’t even have to understand economies of scale to know this; a walk through any grocery store will suffice. Food establishments, likewise, also in on the bulk-buying mania. They offer food platters or group sharing packages, providing a variety of dishes at a lower cost.

With such appealing offers at every turn, it’s tempting to buy more than you intended. This is our cue at Revenue Loop to remind you to be a smart buyer. Bulk buying is an economical habit, but some pitfalls could mean that you needlessly spent more in the end.

The Pros: Buying in Bulk Equals Lower Price per Piece

You can save more if you buy a bag of oranges, a bunch of bananas, and a bushel of apples instead of buying one piece of each every day. The same goes for most food staples, like cheese, eggs, vegetables, spices, root crops, frozen food, and condiments. Also, bulk items have an advantage: Their packaging usually costs less than individual wrapping.

Warehouse clubs usually offer the best bulk prices. These no-frills establishments mark-up their merchandise prices at 12-14%. Traditional stores, on the other hand, add a 25-50% markup on their shelf prices. This means their prices per unit cost less than in groceries and department stores.

Take this with a grain of salt, though. Just because you can save by buying in bulk doesn’t mean you should do it every single time.

The Cons: You Spend More than You Need

Man paying billsHere’s a good reason why you need to be discerning about bulk buying: Not all bulk prices offer a lower cost per unit. Sometimes the “sale price” is just the sum of the unit price multiplied by the number of items in the bulk pack. If you’re not careful, you could end up paying more than you would have had you resisted the bulk price offer.

Bulk packages create a perception of savings. Consider these offers:

  • Buy two T-shirts priced at $15 each for only $20 (save $10)
  • Buy four 500ml bottles of shampoo priced at $9 each for only $34 (save $2)
  • Buy two bags of frozen peas and get one for free (save the price of one bag of peas)

These prices offer savings, but most likely at the expense of your current budget. You may have intended to buy only one shirt, but you went home with three — and paid more for it. As for the peas, did you really need three bags? Sure, you could stick it in your freezer until you need it, but if the expiry date is fast approaching, it might just go to waste.

Out of these three, the perceived savings from the shampoo will translate best on your wallet. You’re more likely to use it all up, which means your grocery bills will be $9 less in the next four to six months.

Buying in bulk does not always guarantee savings — you need to be vigilant enough to catch those instances.

Look Past the Marketing

The trick is to look past the marketing. Stores and retailers cleverly present bulk promos and make them irresistible in a customer’s eyes. Check the individual price, and calculate how much you can truly save before spending for the bulk pack.

For example, you spot a three-for-$10 offer for three bottles of pure olive oil. If each bottle costs $3.50, to begin with, ask yourself: Do you really want to save 50 cents? If you don’t need that much olive oil now, just buy the one bottle and save yourself $6.50.

Bulk buying can save you money, but sometimes it leads to costly indulgence instead of practicing shopping economy. It all boils down to you making the practical choices. Buy in bulk for your kitchen and household staples, but exercise prudence when it comes to non-essentials.

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