Buying in Bulk

by Mr. Cheap

We have a ritual in the Cheap clan.  Whenever a member is “nearing the end”, we all gather around the matriarch or patriarch.  They’ll look each of us deeply in the eye to convey the gravity of the situation, then when their hour approaches, hold the gaze of a younger member of the clan (who may not have the message fully sunken in yet) and gasp “buy in bulk!” as their final words.

Its good advice.  We’ve mentioned the chocolate article Guiness416 pointed us to a couple of times, and basically their business is based on this (buy in bulk, then get a massive markup when you sell smaller amounts).  The success of stores like Costco have been built on the idea that if you’re willing to buy a lot of something, the store will give you a good price.  A while back at “The Real Canadian Wholesale club” I came across a MASSIVE can of chili (we’re talking army feeding size) for under $10 (which is quite a deal when you consider they sell a single meal of chili in a can for $2.50).

A few of the downsides of buying in bulk have received a lot of press:  Don’t buy stuff that will go bad before you use it, don’t buy stuff you don’t have room to store (“Ooh, that’s a good price on twelve pounds of nutmeg” – Marge Simpson) and don’t buy stuff you don’t need, just because its a good price.

The one element of buying in bulk that always gets me a bit hot under the collar is when stores try to trick you.  They’ll have a larger amount of something for a HIGHER price per unit, instead of a lower price.  People assume they’re getting a deal buying more, and end up paying more for the larger size.  Sobey’s has 3 lbs of baby carrots for $3.99 and 2 lbs. for $1.49.  If you buy two 2 lb bags you get an extra pound of carrots for a buck less, but I’m sure some people see the larger bag and just grab it.  Recently at Wal-Mart I picked up a box of Rice Crispy treats (a box of 16 for $5) and on my way out saw a box of 14 for $4 (grr).

The simple way of avoiding this is to look at the price / unit of something (weight if they have it, or by item for something like Rice Crispy treats).  If your math skills aren’t so great doing things like this in your head, practice! (and until you get good, carry a pocket calculator).

The real zinger is its often picking the right product that saves you big money instead of trying to get a discount by volume (don’t tell my relatives).  After I purchased the Rice Crispy treats, I came across “Crispy Rice” treats (off brand knock-offs) for 5 for $1 at Dollarama *sigh*.  Similarly, if you made your own chili it’d cost way less than $10, and if you bought regular carrots instead of baby carrots, they’d be way cheaper too.

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{ 12 comments… read them below or add one }

1 Emily in Ohio

Our family has a very specific list of items allowed to be bought with our Sam’s Club membership, because to us the weight-to-price ratio is favorable, or it’s one of the few items we insist on buying name brand anyway.

Gas is always first on the list. Sam’s generally has gas $0.05 cheaper than anyone around them, so if we’re in the area we’ll swing by.
Enfamil – when DS was a baby, this was a no-brainer. For $24 we got a huge can, and peace of mind that we wouldn’t be rushing to the grocery store in the middle of the night.
frozen fish – I don’t know if it’s cheaper, but their salmon filets are wonderful, individually packaged, and go from frozen to plate in about 15 minutes.
rice – Uncle Ben’s, no substitutes. And in the giant bag, please.
that mega-roll of plastic wrap – I figure it saves me $$$ over buying ziploc baggies, and you only buy one every 5 years or so.
flour – the 25-lb bag. 🙂

Other than that, we might check out the clothes, the books, or if we’re in the market for some newfangled electronic gadget (and can’t find it cheaper on Amazon). And the phone cards are nice, if you do a lot of long distance calling.

2 Potato

My cellphone has a (basic) calculator function, which makes it great for almost always having a calculator on me to calculate tips and per unit pricing when I’m out…

3 Kyle

My mom used to buy nacho cheese by the gallon at Sam’s Club back in the day. Probably an example of buying something you don’t need (and should certainly never eat) just because it’s a good deal.

4 Mr. Cheap

Emily: Sam’s club is great. Its great if there are products you know you like and can load up on the cheap.

Potato: Good stuff!

5 The RAT

Typically, I tend to buy in bulk the least as possible in order to prevent excessive cash outflows that could otherwise be utilized for investment purposes.

However, each year, my spouse and I take a trip to Costco to buy some items in bulk . Some of these items consist of Gillette razor blades, and high-end pricey consumer items when sold directly off the shelf.

We tend to buy our groceries on a weekly basis instead of two weeks as we had before, because this prevents spoilage as well as forces us to plan meals accordingly and nothing goes to waste.

Cheers

6 Mr. Cheap

The RAT: Spoilage really sucks. I hate to buy something and not even get to use it…

7 The RAT

I hear you all the way on this one…the worst is when you buy expensive veggies and you find that you have not even had them for 3 days and they are border line edible…this is the core reason I go once a week – buying good food is expensive to start with, so why risk losing more when you can just dedicate once a week to go? Besides, the trip to the grocery store ends up being a lot shorter because you dont have to go nutz with a big cart either.
Cheers

8 The RAT

I guess its also dependent on how far the grocery store is well. I never took into account the costs associated with fuel, so that may be a factor depending how conveniently located things are!

9 Gates VP

Similarly, if you made your own chili itd cost way less than $10,

I don’t know if I’d eat chili that I made that cheap, I’m just a little too big on meat and fresh vegetables 🙂

But that’s really the irony of bulk purchases. They’re really good for some things (AA batteries, razor blades, packs of gum, bottled water), but there’s also the issue of “too much”. In our quest to eat better and reduce our waste (waist), my wife and I have taken to bi-weekly shopping and simply buying and keeping less around the house.

It’s really hard to beat fresh foods. I mean sure, I could buy a big box of frozen burritos, but then I’d have to feed myself frozen burritos 🙂 Don’t get me wrong, it’s definitely nice to have these around, especially when the “unexpected” wrecks your plans. But if you’re one of those families with three different boxes of microwavable frozen good in the freezer, you’re starting to show signs of a different problem.

In fact, I was raised in one of those families. All of the frozen cost-co food was easy to have around, but it was really unhealthy. Generally, it was a really poor substitute for meal planning. We’ll still keep a frozen pizza in the freezer (the $6 variety, not the $2 variety), but really most of us don’t need food in cost-co sized portions. If anything, the stats show that the average person needs less food in a fresher format.

10 Mr. Cheap

Gates: That’s exactly what I was hoping to get at with this posts. I agree with you completely.

I think you could make a pretty healthy chili for under $10. Any healthy chefs know one way or the other?

11 The RAT

I’m not a great chili chef but I did hear somewhere that kidney beans are very healthy to eat and compliment well with chili! 🙂

12 Sara at On Simplicity

Regarding the sneaky bulk pricing, I’ve noticed this a lot lately. On the checking the unit price, the smaller package is a better deal. I have to admit it’s a brilliant strategy: condition people to think that bulk is always a better value, then switch it up.

At least smaller items mean less spoilage for me!

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