Retail store sales increased by 18% in the fourth quarter of 2022 compared to the same time in 2019. Even with the pandemic's downward trend, which drove bulk purchases at the time, the story remains the same. Customers continue to flock to bulk purchasing outlets.
The net sales of the National Dollar General Stores increased by 4.2% to $8.8 billion in the first quarter of 2022 from $8.4 billion in the corresponding quarter of 2021. According to Costco's most recent year-to-date figures, net sales are up 16.4% from this time last year.
Similarly, the revenue from memberships at Sam's Club increased by 10.5% in the first quarter of this year. Since inflation is a problem for the majority of households, buying in bulk continues to be a solution for many to save money. But if you're bulk buying, it has to be worth the while.
When Bulk Buying Goes Awry
Burke Files, President of Financial Examinations & Evaluations, Inc., uses a family member as an example: “I had a relative who was always looking for the best deal and buying in bulk. They were over enthusiastic and rather unwise.” Files believes that bulk purchasing has overstepped its bounds when you're looking for a second chest freezer. Or are filling up the guest closet with jars of preserved items.
Files mentioned he once uncovered a can of tomatoes four years past the use date in his relative's closet. Although it is not the intent of bulk buyers to waste, this may sometimes be the case.
The USDA estimates that thirty percent to forty percent of America's food supply is lost or wasted annually because it was purchased but never consumed.
Here are some things to keep in mind before making a large purchase to minimize waste.
Considerations to Make Before Bulk Buying
Files points out that bulk buying means you invest money in real assets. He says that while buying in bulk can be a fantastic method to save money, going overboard may result in higher costs. Considering the value of money, Files contends that you must be able to save 5–10% over a single item purchase in addition to the current rate of inflation for it to be fiscally worthwhile.
The price of electricity and available floor space are other factors. Files cautions not to discount those. Instead, consider how much electricity you'll need to maintain a freezer full of food. You must adjust the price of the food you keep in the freezer to account for the cost of the freezer and the cost of energy. If you pay $1,000 a month for a 1,000-square-foot flat and a 250-square-foot room is filled with bulk items, it's costing you $250 a month in storage.
Kathryn Snapka, a Finance Analyst at The Snapka Law Firm, recommends keeping the following in mind before bulk shopping.
- Initially expensive, buying in bulk may not be practical for individuals on a tight budget.
- If you purchase a product in huge amounts, you could be tempted to use more of it.
- Large containers or boxes come with bulk purchases; hence adequate storage is required.
- In addition to your purchases, there is an additional cost associated with membership clubs.
Tips and Tricks to Wise Bulk Buying
Compare and Track Prices
It's easy to assume that buying in bulk will always result in savings, but that isn't always the case. Sometimes, a product's unit cost is the same as or even more than its retail price. You can save money by shopping in bulk if you note how much your commonly purchased items cost at your local stores and make sure you don't exceed that price.
Necessary Items Only
If you buy in bulk, impulsive purchases of things you don't need can cost you significantly more. According to David Reid, Director of Sales at VEM Tooling, buying more only because of a great offer may not be a good deal.
Reid exemplifies: “Take your favorite shampoo, which comes in a 20-ounce bottle and costs $12. You discover that a 180-ounce bottle only costs $45 to buy. At first glance, this might seem like a fantastic deal, but you're receiving six times as much shampoo for about four times the price. You may decide to get the larger shampoo bottle after doing the math on the price.”
Given the high cost of just that one item, this purchase might not be worthwhile. Reid's example also highlights the drawback of dependence on a single product for an extended period. You might find it boring to use the same product for months on end. Additionally, the prices of some things don't go down very much because packing large particles costs more money.
Select Products With a Long Shelf Life
According to Reid, purchase items that will endure for a while if you want to get the most value out of shopping in bulk. For example, he recommends bulk purchases of paper products, shelf-stable pasta, and dry beans.
Contrarily, he adds, perishable foods like fresh produce can spoil very fast. “Cleaning supplies are a temptation, but don't,” says Files. According to him, these harsh chemicals can change over time in storage.
Select Items You Use
It might not be worthwhile to purchase something in bulk if you only need it occasionally. Before making a significant purchase, make sure you'll use the product. Consider including items on your top list that you frequently use, have previously used, or plan to use in the future.
Be Sure Of Quality
To truly understand the quality of some bulk commodities, research is essential. It is best to read reviews and comments from people who may have tried anything before investing your money in it. Bulk purchasing may not be advantageous if the product's quality is subpar.
Avoid Products You Haven't Tried Yet
Steven Wilson is a finance expert and the founder of Bankdash. He recommends getting a smaller pack first for products you've never used.
He explains that you have to make sure a product meets your tastes or functions well in your house before investing in several kilograms of something you have never used before. “Otherwise,” he warns, “you risk having something that takes up room and produces food waste by sitting in your cupboard for months.”
Planning and Budgeting
Andrew Latham, a certified financial planner and content director at Supermoney, suggests doing bulk buying and meal planning in tandem.
According to him, implementing this style since the pandemic has helped them spend less on groceries than two years ago, even though the average cost of food has increased by 10% in the last 12 months. According to him, keeping things simple and avoiding waste can improve savings.
He recommends choosing six or seven recipes you love and cycling through them weekly. Then shop in bulk for those recipes. “It might take a couple of weeks, but over time, you'll get a good sense of how much you need to cook those meals, allowing you to buy in bulk without wasting food and money,” Latham says.
Split Bulk Buys With Others
If you want to bulk-buy but aren't sure you can use the total amount, talk to your friends and family! Steven advises besides getting a better sum overall, your loved ones will also save money.
Additionally, he suggests creating or joining a purchasing group. Buying groups, Steven says, are a collection of people who band together to buy food. He explains that this enables members to purchase at discounted rates, benefiting them socially and financially.
Keep an Inventory
Keeping an organized inventory of the materials you already have is one approach to ensure you aren't buying unnecessary extras. This way, you'll only have to replenish your supplies when necessary.
Bulk purchasing is undoubtedly smart shopping if done correctly. In addition to being economical, it gives you the flexibility to quickly whip up a healthy meal, which is especially useful for large families.
More Articles from the Wealth of Geeks Network:
- Does The Inflation Reduction Bill Live Up To Its Name?
- Chips Are Down: American Semiconductors Falter as Long-Awaited CHIPS Act Arrives
This article was produced by Wealth of Geeks.
Amaka Chukwuma is a freelance content writer with a BA in linguistics. As a result of her insatiable curiosity, she writes in various B2C and B2B niches. Her favorite subject matter, however, is in the financial, health, and technological niches. She has contributed to publications like ButtonwoodTree and FinanceBuzz in the past. In addition to ghostwriting for brands like Welovenocode, Noah and Zoey, and Ohcleo, amongst others. You can connect with her on Linkedin and Twitter.