This is a guest post from Sierra Black, a long-time GRS reader and the author of ChildWild, a blog where she writes about frugality, sustainable living, and getting her kids to eat kale. Previously at Get Rich Slowly, Black told us about sweating the big stuff.
Buying in bulk is great, right? You get the things you want and need, and pay less for them. As an added bonus, you don’t have to shop as often (at least, this is a bonus for me, since I hate shopping).
Because I hate shopping and love discounts, I buy most everything in bulk: toilet paper, frozen foods, light bulbs, even toys. But bulk buying has its risks too, and after years of practicing it, I’m learning to see them.
For me, the three key dangers in bulk buying are:
Making a bad investment in a good product that you need or love. I love a particular brand of gel pen, and I use them daily. They cost about $1 per pen in packs of ten, and about $0.50 per pen in packs of 100. I was at the store the other day, trying to decide how many pens to buy. The decision was made for me by the fact that I am on a cash diet at the moment and had only ten dollars in my purse. Yes, I’m paying more per pen. But the 100-pack of pens is an investment. It ties my dollars up in pens, and prevents me from earning interest on them in a savings account.
Here’s a Wall Street Journal article that makes this point about Forever Stamps (which are also a bad investment, but a fine purchase if you use a lot of stamps).
Buying something you might use but don’t need in bulk. My kids love Puffins cereal, so when I got the chance to buy an entire case of it on sale, I did so. This was in January. We just finished the last box of Puffins. Let me tell you, there have been some scenes around the breakfast table in the past six months.
It turns out no one likes Puffins that much. Buying the cereal in bulk might have saved me a few dollars, but it made my kids unhappy about breakfast. That did not improve our quality of life, which is what frugal living is all about for me.
This bulk-buying hazard is the one I fall for most, because I do “save money” doing it. But it creates a sunk cost. I now have 12 boxes of cereal in my cupboard, and I have to eat them or throw away the money I spent. If I’d “saved money” by buying one box and banking the rest of my dollars, I’d have more money available to buy food the kids and I really want to eat, instead of stoically plowing through another box of Puffins.
Buying things you don’t need or want, simply because they are cheap. The other day, I was biking past Harvard when I noticed a book sale going on in the Yard. I happened to have $20 in my pocket, and was strongly tempted to stop and buy $20 worth of books from their table.
Instead, I decided to take my $20 to a bookstore and buy one book from my 30-day list. I got a book I’d been waiting to buy and knew I would read and continue to use for reference, rather than going for the cheaper books I could buy in bulk. I got fewer books, but more value (and less clutter).
Costco, Target and the other big box stores know that people will buy things just because they’re cheap. When you walk into Target the first thing you see is a large section of items for $1. I used to have a habit of tossing $5 – $10 worth of stuff into my cart: novelty socks, pens, candles, stickers.
When I had a buying mindset, all of these things seemed like great deals. I was getting more stuff for less money. Now I try to avoid getting more Stuff, even when it’s cheap. I buy less in bulk — just like I buy less in boutiques — and I’m watching my savings grow because of it.
J.D.’s note: I’m stupid about buying things just because they’re cheap. Or free. I’m always dragging home free Stuff that becomes clutter. Also, Kris just reminded me that I bought a case of my favorite pens last spring. Photo by Listener42.
This article is about Choices, Consumerism, Frugality, Shopping
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US families/living together groups are getting smaller, but bulk packaging still seems to assume huge families. We bought a box of kosher salt and it lasted almost a decade, since except for bread baking and a few other times, you don’t need as much salt (or any) as many recipes call for.
I also recently found out that the pen I like the best, and was considering a multiple, if not exactly bulk, purchase of, was actually one for which you could buy a refill and two refills cost less than one of the pens. Cleverly, the shop where I buy such items keeps the refills in a different area from the pen display… and lots of places don’t sell refills at all.
My stylist says that most people use way more “product” especially shampoo and conditioner, than they need, and I am always amazed at people who buy large sizes, even if your hair is long, you don’t need as much as you think!
The one thing we should be buying in bulk at the moment is hand sanitizer; my husband is using it hourly, I think.
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I don’t get the bulk buying thing. If I need 1 can of tomato sauce, then that is what I need, not a case.
Storage is certainly an issue but I think there are more deep seated issues with bulk buyers. Bulk buying may stem from a fear of lack. Lack of money for food, lack of money for other things. Lack of work, lack of everything. My mom stored bulk food. She was worried my dad wouldn’t have work and we would starve. That never happened.
I think we also as a society spend more time planning what we will eat than what we will do with our lives.
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Buying things you don’t need or want, simply because they are cheap.
I caught myself almost doing this today when I stopped at the mall to pick up some things for my outfit on Saturday. (Wedding to attend, not Halloween.) I was perusing the sales racks of a store I don’t really shop at much, and thought about getting a pair of brown leggings just because they were $3. Then I snapped to my senses and realized I would never wear them…
I still walked out of there having spent $20 on three things when I only went in for one. I got leg warmers (for the wedding, sounds weird I know) and also picked up two necklaces, either of which will match my dress well. I feel a bit guilty, though, since I’m worried I’ll change my mind about the leg warmers. (I’m not very trendy, and these to me are rather trendy.)
I don’t feel too bad, but I also spent $5 ordering photos today. Saved $12 using a coupon, though, so I guess I shouldn’t feel too bad? $25 won’t kill me, I just don’t like days where I feel like I spend a lot!
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@ Gen Y Investor #3
I hear you! I am under trauma after buying a stack of toilet paper from Costco early this year. I hate the toilet paper now and can’t wait for it to get finished (maybe February 2010) so that I get back to my routine of buying a different type every two months or so. So much for bulk buying!
That aside, I am a keen bulk buyer as I always buy sugar, flour, dry beans, nuts and most food items from the bulk bins. Recently I have become a hater of packaging too. I usually only buy what I need for a week or two so I avoid looking at piles of food items stocked in the kitchen or wherever!
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I rarely buy things in bulk. I agree that there are those pitfalls. However, I usually use simple rules for buying things in bulk:
-don’t buy perishable items in bulk
-buy non-perishable items that you absolutely use in bulk
Pretty simple at first sight. It only get a little bit complicated with with the item #2. Because it is difficult to know which items you really use the most sometimes.
In order to do that, you must be aware of your own habits, which would mean that you would have to track your purchases for a while to learn your own buying and usage patterns. Not an easy task, but doable.
Just like you mentioned in your first point, sometimes you tie up too much of your money at one time by buying in bulk. Simply put, buying in bulk has it’s opportunity cost.
To make sure you CAN buy in bulk, I would suggest to know all of your monthly expenses in advance and have money set aside for those expenses and it should not be touched.
Only after you take care of your basic needs, then one can think of buying in bulk.
Best,
Tomas
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At Target, the water filter cartridges I use are $7.99 per piece. There’s also a three pack for $29.99.
I had to make sure that it’s really the same product. It is. What’s up with that?
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This is a very interesting perspective. I always say… that “A penny saved is NOT a penny earned.” If you don’t need, it’s not a deal regardless.
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It could be good as long as you are disciplined and work from a list.
Our staples and savings are:
Soymilk ($4/month)
Bread ($2/month)
Cheese block (my husband LOVES cheese) ($2/month)
dog food ($10/month)
spaghetti
and we do have enough storage space. costco in particular has good quality stuff including some organics.
Just the above justifies the $45 annual fee but again we have to be careful and my husband tends to buy too much snacks, like the following stuff about to go to waste:
raisins – who needs a pint of raisins?
popcorn – who needs a gallon of popcorn?
giant chip bags – resealable but goes stale after a while
more chips –
however, without that membership we could still get deals but need to have good timing.
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I don’t remember the last time a pen of mine ran out of ink. I think one pen can last a year. So the pens are not a bulk item for me.
The rest depend on what you use, and how much of it. Yes, you can buy a huge amount of something that goes bad, but that’s not Costco’s fault. Note to self: You don’t have room to store a gallon of mustard. It took you three years to use it up. No mo’ mustard.
Their guarantee/return policy on electronics is great, and that alone can pay for the membership. Many of their food items (e.g. shrimp, beef tenderloin) are 1/2 to 2/3 supermarket price. One holiday dinner (with company) and the membership is saved.
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As far as Costco goes, I save the annual fee just from gas purchases. They are always the best price in the area.
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I read in an article on ezine that buying there are many people who have money but there are very few who knows how to use them. I completely go with this point. Many people are buying rubbish things as the prices are low or they have attractive offers attached with them. This is ridiculous as how one should have some understanding before investing. Better if they buy something relevant to them. Anyway thanks Sierra for the post and raising awareness among people.
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@Neale #16 – I was just scrolling down to say much the same thing…
We often make the mistake of buying treats in bulk. Granted, you do save money per unit, but you get through it a lot faster than you would go through that quantity if you had to buy an individual pack each time you wanted, meaning that:
a) you end up spending more money when calculated over a unit timeperiod rather than unit quantity
b) most of these treats are not the epitome of healthy eating, so it’s a bigger dent in your health to have it on hand and therefore eat more of it.
c) the treat loses its novelty, which results in a lost pleasure (which we replace with another treat, and so the cycle continues…), and also means that it becomes taken for granted so yet again, we eat more of it.
So, bulk is only good for buying staples and non-perishables in our household
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It all takes temperance and forethought.
Since I have honed in on saving money–I have yet to make any kind of “real” bulk purchase. Maybe diapers, but that’s it. Cuz I know that I will use them.
And not falling into the trap of buying crap you don’t need just cuz its cheap is not easy–but definitely doable.
Keep in mind the two questions–Do I really need it? Do I really want it?
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My rule for buying in bulk. Always ask:
#1 – if I buy it, will some of it go to waste? #2 – if I buy it, will some of it go to waste (considering my overeating as waste)? #3 – Do I have the proper room to keep this in storage?
If you can answer these three questions correctly, then you can buy it. Otherwise, buy the lesser amount and pay more per item – you’ll be paying less overall.
This is from a post I wrote about foodshopping:
http://shomershekalim.wordpress.com/2009/07/08/7-tips-for-foodshopping-in-israel/
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My wife and I don’t buy in bulk for the home. To me, it doesn’t make sense to have to pay an upfront $50 membership fee to a typical Costco or Sams Club, and then have to spend at least roughly $100 in cash (or debit) each time you go to that store. The ‘savings’ would just about pay for the $50 fee for us.
If I need to buy soaps, detergents, light-bulbs or home stuff, we’ll go to walmart when we feel like we can put up with the clientele to save the extra couple dollars and target when we aren’t up to it when that extra $2 savings doesn’t matter.
In terms of food, we go strictly to one foodstore to build up the points associated with that store, which usually leads to a 10% off or sometimes a 15% coupon. This leads to a big savings on top of coupons we are already using on a $300 monthly ‘big grocery shopping’.
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There is a bulk big box store like Costco called Makro in Thailand. Interestingly there is more commercial traffic and the people who buy there tend to break up and repackage the bulk items to sell in smaller packs to individuals- making a little profit in the process.
Seems like a good model for the urban areas of the USA as well.
-Mike
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My worst problem is when I change what I like. Examples:
* I become a different size.
* I learn of a food allergy, skin allergy, etc.
* I start buying only recycled/organic/fluorescent/natural/etc.
* I switch to reusable items such as a hanky instead of tissues, cloth napkins instead of paper, rechargeable batteries, etc.
* I replace a broken coffee pot with a new one that uses different filters.
Another problem is spoilage. I’m not just talking about food not getting used before it goes bad, I’m talking about pens drying up, a power outage ruining everything in the freezer, a water leak ruining paper goods, a heat wave/power outage melting candles.
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This is one of the issues where a desire for minimal clutter collides with a desire to be frugal. For me, it is a personal decision that living without a lot of “stuff” wins out over saving some money. I would feel differently if I had a big pantry, an attic, a basement or an extra freezer. But I don’t!
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Buying books? Haven’t you heard of the library? You’re already paying for the books, you might as well enjoy them!
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Totally agreed about the storage issue! Because we’re trying to make our small home more liveable, we’re allowing ourselves to spend more per item on many things, so that we’re not wasting money overall by not being able to find a place for bulk items, not being able to use them up before they expire, or outgrowing our affection for them. We used to be bulk-buying addicts, and it’s been a slow process to wean ourselves off the idea that cheaper-per-item is always better.
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I find myself going through supplies faster when I have a greater quantity of them on hand. That last Mach 3 razor cartridge always seems to last twice as long as the first seven in the pack doesn’t it?
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Great, thought-provoking post. I am a victim of my mother-in-law’s bulk buying obsession. I am currently trying to get through 3 tubes of nasty cheap shower gel, canned green beans and creamed corn, and about 100 pairs of white tube socks. She also has a problem with bulk knitting — we have received about 10 pairs of slippers in the past year alone. I am grateful for the intention behind these gifts and would never complain to her, but the truth is I feel oppressed by all this STUFF. I could give the food to the food bank, but then she’d notice we’re “low” on beans and get us some more!
One of my best and worst bulk buying experiences was belonging to a food-buying co-op. I got high-quality (organic, unprocessed, local) food for 30-40% cheaper than retail. Buying extra-large sizes and sharing with other members was especially cheap. In the end, the extra work was a pain. There were meetings, food sorting nights, order forms, and some messy spills (don’t buy vats of honey for sharing, just don’t).
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Buying bulk is great when you do once a month cooking. Stuff gets cooked and frozen and nothing goes to waste. You find that you don’t over use something just because you have so much when you ration is out in recepies over a month.
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Rachelle, how about presenting your MIL with a pattern book of something that you WOULD like?
I buy Arborio rice at a restaurant supply store. It has a zip-lock top. I put it in a jar that I bought at the grocery store. When it gets low, I refill it. I much, much prefer it to long grain.
I also buy canned chicken in bulk (6 cans, I think) and tuna fish (12 to a pack, I don’t buy Albacore). I buy a baby loaf of Tillamook Extra Sharp Cheddar from Costco. It only costs me $7.99 a loaf. Just my savings from the cheese alone pays for my membership for the year.
OTOH, my SO bought a bag of wasabi mix (a restaurant size bag!) and has never opened it.
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Terri, what’s a pattern book? I’m reluctant to give my mother-in-law any suggestions. I think the notion that anything but price would determine my preference would be alien to her (“peanut butter is peanut butter”). I’m a bit of a granola-head, preferring whole, natural foods, sometimes organic. But I will talk it over with my partner and see what he thinks.
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