When Buying in Bulk Is Actually a Waste of Money

As inflation continues to skyrocket, even people who once floated through grocers and general stores without paying much attention to things like “unit cost” and “price per pound” have begun to spend their budgets, and those of us who have always dealt with coupons with the precision and ingenuity of a mafia accountant are discovering that our routine hacks no longer bring in the profits they once did. As everyone in the country seeks relief from rising prices, buying in bulk is becoming more and more popular.

Buying in bulk is a simple concept: you buy something in bulk, like toilet paper, and get a discount on the price due to volume. It’s such an obvious good idea that wholesale warehouse clubs are a huge business with over half a trillion dollars in annual sales . That’s a lot of pallets of toilet paper.

The simplicity of the concept gives the impression that you can just buy everything you need in bulk and get the most savings, but the truth is a bit more complicated for two main reasons: there are hidden costs and negative side effects when buying in bulk. . If you don’t keep track of both, you could lose all the savings you enjoy on the front end.

Hidden costs in bulk purchases

First of all: buying in bulk almost always saves you money. For example, a 2.6-pound box of oatmeal costs you $4.49 at the grocery store, but you can buy a 10-pound box at Costco for $7.99 , saving almost a dollar per unit cost. You just saved a lot of money. While the savings cap varies by category—for example, buying applesauce in bulk will only save you a few cents per item—if you apply a bulk buying strategy in general, you will absolutely save.

But then there are hidden costs. If you’re not careful, these costs can negate or even negate your mass savings advantage:

• Membership fee. Bulk purchases typically require a membership to a warehouse club store such as Costco or Sam’s Club. These fees range from $45 to $120 per year, so you’ll have to subtract that from your total savings.
• Pre-strike. While the savings on bulk purchases are real, you should remember that this strategy also shifts your spending from the future to the present. In other words, make sure your budget can handle the hit. Buying groceries in bulk can save you $100 overall, but you’ll have to find a lot more money right now to pay for them. If this results in you missing credit card payments or struggling to pay your rent, it may not be worth it – and it may not save you anything at all in the long run.
• Shelf life. Food eventually spoils. Buying that five-gallon can of mayonnaise might sound like a great deal, but fast forward a few months. If you still have half and can’t eat it all before it goes bad, you’ve just wasted your savings.
• Repurchase. Bulk shopping stores are not altruistic. They want as much of your money as possible. Bulk buying is often paired with aggressive marketing to entice you to buy as much as possible—and buy things you may not actually need. Just because a year’s supply of soda is a lot doesn’t mean you need a year’s supply of soda on hand. If you buy too much due to mass mania, you won’t actually save as much as you think because you’re spending more than you should.

Side effects of bulk buying

Buying in bulk without careful planning can also lead to some negative side effects that can indirectly affect the savings aspect:

• Storage. Before buying several tons of cereal in bulk, ask yourself if you have a place to store it. This is especially important when it comes to something that you need to freeze. Do you have a freezer and/or vacuum tools to store everything safely? It is important to remember that bulk buying is an investment, and in order to maximize your profits, you must be able to use whatever you buy.
• Diversity. Buying in bulk ties you to a particular brand or type of food. For example, if you get a lot on some crackers, ask yourself if you can realistically eat the same crackers for the next few months without a break. If you get to the point where you can’t look at another cracker, you’ll end up buying extra groceries and possibly letting your bulk purchases expire, wiping out your savings.
• Overuse. Buying in bulk creates psychological pressure to use what you have bought. Not only do perishable bulk purchases always expire, but stacks and stacks of things stacked in your garage will appear in your mind. This may lead to careless use. After all, if you have gallons of shampoo, why not use it generously instead of being careful or thinking about how it will affect your hair? It can also result in you using more than usual to make room or use it before it goes bad. The end result is that your intake increases, which negates your savings advantage and possibly even leads to weight gain when you eat bulky food like a weevil.

Bulk purchases require more than unit cost calculations. You need a storage plan and a consumption plan to get the most out of it.

What not to buy in bulk

Some things always make sense to buy in bulk if you plan to, such as cleaning products, non-perishable foods like rice or canned food (but not canned vegetables – see below), non-perishable drinks, and toiletries. But some things don’t work so well. Here’s what not to buy in bulk:

• Meat. This may seem obvious, but you will be surprised. Buying meat in bulk only works if you have a freezer to store it and don’t mind eating the same thing regularly for a very, very long time. Even if you have a freezer, sealing and storing all that meat is time-consuming, and your time is worth something.
• Milk and products. Fresh fruits and vegetables are obviously difficult to store for a long period of time, so buying a ton of them is quite a challenge and doesn’t make much financial sense. Similarly, fresh milk (as opposed to condensed or powdered milk) only makes sense in bulk if your family is the Brady group.
• Coffee beans . Whole bean coffee spoils rather quickly. As a general rule, you should have as much coffee as you drink in two weeks. Buying a year’s supply means you’ll be drinking pretty terrible coffee for most of the year.
• Snacks. Buying snacks in bulk can save you money, but consider your willpower. If you end up eating a bag of Doritos every day because you have a thousand in your pantry, your eventual health care costs could offset your savings.
• Canned vegetables. Canned vegetables are one of the few exceptions to the bulk-buying math because grocery stores tend to discount small cans more often (and more aggressively) than large cans, and supermarkets almost always outbid warehouse store prices for canned vegetables.

Buying in bulk is a great strategy, especially if you have a large family to feed and take care of. But it’s not as easy as it seems. Keep hidden costs and side effects in mind when planning your bulk buying strategy and you will have a much better experience. Also, never finish Doritos again.

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