When it comes to the big warehouse retailers like Costco, Sam’s Club, and BJ’s, the idea is that buying in bulk nets a better price per unit. The question then becomes just how much do you need to save (spend) to make up for the price of membership? The answer is, it depends. It depends on what you buy, and how much you buy. If you want to save big through a year of warehouse membership, be ready to do a little basic math, and consider the following:
They’re not always cheaper: This is especially true of some of the one-off items. If you’re saving big because you’re buying cleaning supplies and toiletries in bulk, then how does that formula make sense when buying a single CD or DVD? It doesn’t. The same goes for some of the other single-purchase items like electronics and clothing. Sometimes there’s a deal to be had, sometimes there’s not. Be safe and do a quick search online when in doubt.
But a lot of the time, they’re cheaper: Just going up and down the aisles of the grocery store, start to make mental notes of price per unit on common purchases. Single-brew coffee often sells for 60-70 cents per pod, macaroni and cheese is $1.25 per box, and laundry detergent is usually 25 cents per ounce. The warehouse will usually beat that with their everyday price.
Still shop the sales: On top of some of the deals offered by the warehouse clubs, they’ll still hold sales, and manufacturers will still offer instant rebates. Certain items like diapers, paper towels, and toilet paper can be right on the line of being a save-worthy purchase. That extra little bump from a sale can make it a hands-down smart buy.
Be cautious of perishables: Even if the price per egg is cheaper when you buy 72, it doesn’t make financial sense if you wind up throwing half of them away. You know your family better than anyone else. Will you go through the perishables before they go bad? Make sure you don’t lose money while trying to save.
Know the variables: Particularly with electronics and appliances, the warehouses will carry unique models of certain brands. Pay close attention to the model numbers of an item. All retailers nationwide might carry laptop model 120A while only the warehouses carry model 120B. Sometimes they’re identical models with a different name, sometimes they have slightly different components. You’ll want to do a little research to make sure that the drop in price isn’t accompanied by a drop in performance or quality.
Watch for the dealmakers: You walk through the same warehouse retailer on a regular basis and see the same items, then suddenly something new shows up. A one-time bulk pack of furnace filters, an area rug, or a high-dollar seasonal item might recoup the cost of membership in a single trip.
There may be an instance where a warehouse club has an amazing deal on a TV and it makes financial sense to become a member for a single purchase. On the other hand, if you don’t bulk shop often enough to recoup the initial investment, then there’s really no point. Consider the items that you purchase most throughout the year, and items that you’re guaranteed to continually purchase — soap, shampoo, napkins, dish soap. Map out your spending habits, then sit down and do a quick cost analysis to decide if it’s the right investment for you.