Sunday, February 14, 2010

Buying Bulk- When it Pays and When it Does Not

This post and the next few were written while I was sitting in the emergency room with my son for 28 hours, so I apologize if they're a bit long winded...



Everyone knows that when buying food or similar, when you buy more, its cheaper- right? Wrong.
Sometimes it pays to buy larger quantities, but other times you're tricked into wasting your money by buying in bulk.

Before buying bulk, there are a few questions you need to ask yourself to ensure that bulk buying will save you money.

Is bigger cheaper?
You're in the store and see two ketchup bottles. One is 16 oz and the other is 24 oz. Automatically you reach for the bigger container, assuming the merchant is rewarding you for buying larger amounts. Sometimes this chain of thought is correct- when you buy more of a certain item, you're paying less per oz, even if the overall expenditure is greater.
Other times this is not so true.
I remember my elation when I shared with my husband a certain “wise” purchase I had made. I found a 2 lb container of whole sesame paste for only 5 dollars- quite a bargain- until my husband informed me that he regularly buys the 1 lb containers of sesame paste for 2 dollars and there pays only 4 dollars for the same amount that I bought for 5.
When I was buying whole wheat flour in bulk, I inquired about the price of regular white flour and found out that if I bought 25 lbs at once, I'd be able to pay 43 cents a pound instead of my usual 32 cents a pound. No thank you. What a rip off!
Because you can never be sure whether the bulk item is cheaper or not merely from the fact that it is bulk, always go shopping with a calculator. Figure out exactly how much you're paying per x amount and make sure that you really are getting the better deal.

Will the food keep well?
Reading that Oceans of Joy's bulk bought sweet potatoes spoiled quickly after their purchase reminded me of the time that I bought a 10 lb bag of rice, only to have it get heavily infested by buys and I ended up throwing out a large portion of the food.

Do I need a lot? Will I even use it?
I don't use capers much in recipes. If I would find that buying a large container of capers would end up being cheaper per ounce than buying a small amount of capers for a cheaper overall price, I would buy the smaller amount even if it has a higher cost per ounce, as I have no need for a large amount of capers. It is not cheap to buy too much of something you don't need.

Will I end up eating more of the bulk food than I would otherwise because I have it in stock?
If the answer to this question is yes, whether it pays to buy it in bulk depends on one thing. If it is something cheap bought in small quantities and is even cheaper when bought in bulk, then it is perfectly fine and money smart to fill up on this cheap food. Case in point- I bought 25 lbs of whole wheat flour nearly 2 months ago and have only 8 lbs left. We usually go through flour at a much slower pace, but having so much of this item made me us it as a staple in our house and the base for many dishes. Of all starches this whole wheat flour was practically the cheapest one around. Therefore, by using the whole wheat instead of my usual potatoes, rice, or read made noodles, I was not wasting money, but rather, making a prudent choice.
On the other hand, take for example something that is a n expensive extra, like berries bought in bulk for a fraction of the price of what you usually pay for berries. The key phrase here is “what you usually pay for berries”. If berries are usually 10 dollars a pound (made up numbers) and you find it for 5 dollars per pound, so you buy lots, and then you use it in place of your usual dollar a pound fruit, you would be wasting money on those berries.
I bought 10 lbs of chocolate chips for a third of the price that I usually pay for this treat. Because these chips were lying around my house, we've used them at an incredible rate; we've gone through in two months the amount we would usually use in a year. Chocolate chips (at least where I live) are a costly snack, even if I buy them for cheaper than their usual.
The rule of thumb with eating bulk bought food is: if the food is absolutely cheap, feel free to finish it as quickly as you would like. If its only cheap in comparison to its usual overpriced cost, but is expensive in relation to other foods, use it at the same rate as you would have had you not bought it in bulk. If you don't have the self control to eat bulk bought expensive foods at a slow pace, in my opinion it is better to not buy those foods in bulk, as you'd still be spending less total on your chocolate chips than you would on large quantities of “cheap” chocolate chips.

Is there enough of a saving to make it worth tying up your money in that food?
Sometimes, buying food in bulk would only provide minimal savings and you'd be spending your money on buying bulk instead of letting the money accrue interest in the bank, or you'd need to borrow money for your other expenses and pay interest on that loan. If that is the case, then you have to do a calculation to see just how much money you're saving total versus how much money you're losing (either by not letting your money accumulate interest or by paying interest on a loan) to decide if you're truly saving money by tying up your money in food instead of leaving it in the bank.

Is buying in bulk for you? Only if the food is cheaper, won't spoil, you'd actually use the whole amount but won't overeat if because of its presence, and the savings are significant enough to outweigh the downsides of money tied up in food.

Have you ever bought bulk? What did you buy? Do you think that even with all the aforementioned points that you still saved lots of money buy purchasing large quantities?

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