Stop Bulk Buying Only at a “lower” Price
According to every personal finance book and website you have come across in the past two decades, one of the easiest ways to save money is to buy in bulk. They all state that you will not only save money by lowering the unit price for a larger product, but you will also reduce the number of trips to the store for replacement or restocking.
It’s a great idea until you become one of those Extreme Couponing folks who have a whole garage full of economy-sized shampoo jars for your family of three. Or, as Josh Barro writes for New York Magazine, until you screw it up. And it’s all too easy to go wrong when buying in bulk.
Barro mentions a couple of common mistakes, much to the dismay of any of us who have committed these trading sins:
- You buy too much of one thing than you really need. A product expires before you need it, or you decide you hate the look / smell / taste before you start working on your stock.
- You have set up a recharge service, but the timing is wrong. (Ask me how I got the 75 replacement blades for my razor before figuring out that I might be missing out on the subscription shipping I signed up for years ago.)
- You don’t have a suitable storage space and the item breaks down before you can use it (e.g. meat, pantry food).
Aside from the fact that your best intentions went wrong, the unit price can be inconsistent. This is an important question: unit pricing should help you distinguish a good from a bad wholesale deal. But as Barro points out, not every product is measured by the same unit of measure (think of paper towel rolls with different sheet sizes), and many states don’t require stores to display unit prices.
Rather than getting confused about the perceived benefits of shopping in bulk, ask yourself how quickly you can intelligently use the item in a larger format. If, for example, you’re trapped with this item for longer than your normal relationship, it’s probably too long. (Both.) If you know you’re going to move into a new apartment in six months, it’s probably not worth buying with whole trucks.
Skepticism doesn’t mean you can’t take advantage of the bargain prices for larger items. But if your family or your physical home is small, you have to be strategic . Because if you buy more than you really need on a regular basis, you are just wasting your money. And didn’t it make sense to save at all?