Overspending When Buying in Bulk

by David Ning · 17 comments

buying in bulk is no good

We’ve all heard that buying bulk is one of the most effective way of saving money. Mathematically, it makes so much sense because buying in bulk means paying less for the same amount but like everything else in life, there are exceptions. Today, let’s explore the other side of this argument.

Starbucks Gift Cards
Over at Costco, I noticed that they are starting to sell Starbucks gift cards. 5 x $20 ($100) worth of credit is only sold for $79. At a glance, it’s such a great deal because we are getting more than a 20% discount but is it really a good deal? If you paid for the gift cards up front, isn’t it much easier for you to give in to going to the coffee shop? If you end up going to Starbucks more often than you would otherwise, haven’t you paid extra?

Spices
Whenever I have a huge container of a certain spice, I always end up using more. It’s pretty apparent because Emma and I can use up the first half of any container of spice (be it soy sauce, salt or pepper) much quicker than the second half (the last 10% always lasts us a looooooooong time)

Ice-Cream
I used to feel that the Hagen Daaz tiny containers are so overpriced (although extremely tasty). With the generic brand which sells for about the same price, there’s 4 times the amount of ice-cream. Then one day, I realized that when I buy the generic brand, I finish it at about the same amount of time (I’m not kidding, I literally eat 4 times the amount). I notice that because of Hagan Daaz’s small container, I end up scooping less out each time. These days, I feel comfort when I buy that more expensive brand of ice-cream because I know I’m not really overspending.

The examples go on and on so what do you think? Do you buy in bulk and if you do so to save money, how do you keep yourself from using more?

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{ 17 comments… read them below or add one }

Mike Huang October 22, 2008 at 1:28 pm

My wife talks to me about this ALL THE TIME. She always mentions that if I purchase different brands that have more, I’m just hurting my health. In the long run, I end up paying more than I would have if I bought the better brand or spent on less bulk items.

-Mike

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Tina October 22, 2008 at 1:31 pm

I recently read an article in the Wall Street Journal about the same topic. Considering the state of our economy right now, food price increases/smaller packaging, one of the few places expected to make money are wholesale clubs like Costco, BJs, Sam’s Club etc. The point of the article was you might not necessarily be saving because if you have a tray of muffins at home, you will eat more muffins than you normally would. If you have a case of canned soup, you are more likely to make canned soup for dinner only because it’s staring at you everyday and you want to get rid of it.

I find that wholesale clubs are good in terms of buying non-perishables such as toilet paper and such. I have a Costco and BJs membership…I shop at BJs because it’s more of a big supermarket for me, but I know we waste more of certain items/foods because we bought such a ginormous pack.

I’ve also noticed that the prices at BJ’s or Costco maybe be better than regular price at your local supermarket, but if you catch your local supermarket running a sale, its better to stock up there.

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gearythedeptcounsellor October 22, 2008 at 1:48 pm

I find it very true that when buying in bulk one can over indulge, it takes a strict and perhaps frugal person to make it really work. In economically scary times it is important for all of us to watch our spending and learn to be careful and not waste. We need to be careful when at the bulk stores remembering that just because they sell it does not make it cheaper, after all they do charge for the privilege of shopping there with membership fees. Yet you may say that it pays for itself, and it may if you buy the right items. Some items you can buy for the same price or perhaps cheaper somewhere else on sale. Also make sure that you watch out for their in house sales, those can be the best deals – bulk and cheap. I do also find that I get sucked into buying things I don’t need, they have very persuasive taste testers and demonstrators. If it is too tempting to over spend I would suggest sticking to a cheaper grocery store and watching the flyers for sales and coupons. It is very important to save where we can for the just in case.

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Aya @ Thrive October 22, 2008 at 2:02 pm

I think the problem with using food as an example for buying in bulk is that it raises the question of if you’re buying more than you can consume. It’s less harmful to buy the pack of 12 pens for $5 instead of 2 for $3 than buying 12 oranges for cheaper than 2, because what can you do with 10 extra oranges that might eventually spoil? I still understand what you’re saying though, and in any case cooking at home goes along the same lines in how it saves you money. It’s ridiculous to pay $7 for a sandwich, when you can make 3 sandwiches with that $7 at home.

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Danielle October 22, 2008 at 3:27 pm

Great post. I think that buying in bulk can be useful when you end up using ALL of it before the expiration date. LOL. On the other hand, in case it is food, doesn’t bulk buying cause overeating? I mean, you already bought it right? So you better make sure it eat it all.

:D

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Debt Reduction October 22, 2008 at 4:52 pm

Naturally this how the big warehouse companies make money. For Example Costco. Do you know anyone that spends less than $400 everytime they go in here. What a gig…and they charge you a fee to shope there.

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Andrea@foolsandsages.com October 23, 2008 at 7:42 am

Hilarious picture. I did a post about this a little while ago because we just had a Costco open in our little town … although I’ll admit that the focus was more about not liking those big bulk stores than about actually buying in bulk.

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marci October 23, 2008 at 10:46 am

I find that buying non-perishables in bulk does save me money, even in my single person household. And no, I don’t feel that it causes me to eat more or use them faster, as only a small portion of that is visible at any one time, plus I tend to hoard them as I know I won’t be buying more until they go on sale again, or until I go back to Costco, which for me is a 4 hr round trip.

Take a 25 lb bag of flour which was $7.99 at Costco, or $7.5o for the equivalent poundage on sale at Freddies.
Or 25 lbs of salt, rice, wild rice, beans, sugar, cornmeal, etc. All those things will be stored away in airtight containers, and only a small cannister will be visibly available at any one time. And who’s going to overdose on staples? Not.

Spices I also buy in bulk – but I don’t think I use more of them as I’m just pretty stingy with spices (due to price) to start with.

Ice cream? One a month and only Tillamook and I don’t really care what the price is – it’s got to be Tillamook Ice Cream :) Takes self discipline to stick to the once a month ice cream, well, self-discipline and stepping on the bathroom scales every morning :)

I buy cases of veggies, mushrooms, fruits, etc. Just because they are there doesn’t mean I need to eat them right away. I actually enjoy the feeling of just knowing there is a year’s worth of food tucked away in the cabinets. My problem is probably more of getting them used up :) I do write the month/year on the tops and rotate.

I guess maybe I just have a frugal hoarders mentality – maybe that’s why I am not tempted to use them up fast. Plus, I don’t want to use them up, as I’d just have to buy more.

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Dominique October 24, 2008 at 4:38 pm

I do buy non-perishables in bulk especially if there is an offer – ie diapers for the baby as it does work out cheaper in the long run.
I won’t stock up on food or buy things in bulk even though it is cheaper as it does work out spending more when food spoils or if you do not actually need to use the product.

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Marcia October 27, 2008 at 12:39 pm

Most of the time I go to Costco I can pay cash and get out of there without a cart. The key is knowing what’s a good deal and what isn’t. I still need a cart for those once-a-month diaper purchases.

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Funny about Money October 28, 2008 at 7:12 am

Well said. LOL…especially about the ice cream…

Like Marcia, I try to build in some restraints when I visit Costco. What works best for me is to bring a shopping list and (the hard part.) STICK TO IT. Especially I try not to buy anything perishable in bulk, or anything I haven’t tried before. If I don’t really know that I like a brand and will use it up, I wait until I can try a smaller package before buying a lifetime supply.

That said, there are some things that are a real joy to have in giant supplies, and that probably save money: Costco’s awesome Garofalo spaghetti, for example, is as good quality as the best you can buy retail, anywhere. Toilet paper. Paper towels. Shampoo & conditioner. And if you can restrain yourself in the consumption department, you can’t beat Costco’s price on Corona beer by the case.

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Aaron November 5, 2008 at 12:54 pm

We buy fruit/vegetables, paper plates, and cases of Poland Spring water at BJ’s. Everything else we find cheaper at Shop Rite supermarkets when it’s on sale.

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Debt Consolidation Toronto June 15, 2009 at 11:50 am

This is a very valid point. As much as people would like to think that buying in bulk saves them money, they actually end up spending more than they really need to. Bulk deals also cause people to buy items that aren’t necessarily on their shopping list, and they choose to buy them anyways as result of unmatchable prices.

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Bankruptcy Saskatoon June 26, 2009 at 11:10 am

Interesting article. I definitely agree that people overspend when buying in bulk because they often stack up on things they don’t really need. A good point was mentioned in the comments above about buying non-perishable goods in bulk rather than food/drinks. That is a great way to save in the long-run.

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The Prudent Scholar March 4, 2011 at 7:25 am

Buying in bulk and keeping things around “just in case” can also cost you money if real estate is expensive in your area. There’s a hidden cost to storing all that stuff. It means you need a bigger pantry, a bigger garage, a bigger whatever. We live in a small house in an area where square footage is at a premium. We also live close to a grocery and I can get most things on the way home from work. While we keep some basics, we have a “just-in-time” inventory strategy that cuts down on storage and minimizes discards from expiration/spoilage. It does take some planning, though.

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Witty Artist September 19, 2011 at 2:26 am

I don’t buy too many things in bulk. And what I do, is usually something that is used constantly and not at once, like toilet paper or paper towels. Sometimes it happens to dig in when I buy yogurts or other goodies in bulk. But I try to keep the balance.

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JP A October 21, 2011 at 6:35 pm

Thanks for the post David. Interesting comments as well. A lot of good perspectives have been shared.

One additional lens to consider is the psychology behind bulk shopping. Really its the psychology behind large packaging and big containers. It’s used everywhere. The Big Gulp at 7-11, the Super Size meals at McDonalds, the Tripple Whopper at Burger King are examples we have all seen. There must be something to learn here.

So to Dave’s point, do we actually consume more if we buy large amounts? What does psychology tell us?

It looks like the answer is yes. Larger packages means more consumption.

Take a look at this summary of some of the most significant psychological studies about external factors affecting human behavior: study:http://tinyurl.com/66obh78. Its a monster. Don’t be intimidated. Here’s the highlights:

- When given a larger bucket of popcorn at a movie theater people ate 34% more than the people with a medium sized bucket. (The kicker? They made the popcorn in the larger bucket stale and old. The double kicker? They asked the people eating from the larger bucket to have dinner just before they came to the theater)

- Having candy on your desk vs. 6 ft away can add 10 extra lbs of weight over a year (easy access means more consumption)

So it seems more access and larger supply does increase consumption. There are exceptions of course (I admire those disciplined frugal bulk purchasers out there) but most people will consumer more if they can get their hands on an attractive supply of delicious food.

Mine is corn flakes.

Cereal fan till I die.

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