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Thursday, July 14, 2011

Bulk Purchase- 7/14/11

Our bulk foods. Objects are larger than they appear.
Each sack is 50 lbs and approx 2.5 feet tall.
If you took a peek into my kitchen right now, you'd probably be just a wee bit overwhelmed. In addition to my large stockpile of foods in my cupboards and freezer, I currently have 5 large sacks, 2 large boxes, and 1 bag of food I bought yesterday... Coming to a grand total of approximately 350 lbs of dried goods that need to be put away to feed my family.
One nice thing about buying large quantities of food like this is that come what may, whether the zombie apocalypse, alien invasion, or doomsday, or whatever, we'll have enough food. In more real terms, our financial situation is definitely improved from what it was 1, 2, and 4 years ago, but we still live on a very tight budget and are not rolling in dough. Not only that, but our income isn't consistent and neither are our expenses. We've had really tight months financially in the past and I wouldn't rule out ever having a tight month in the future, so its nice to know that even if one month we really don't have any extra cash left over after bare basics, we won't be anywhere even remotely near starving because of all the food we keep in stock in our house.

Being that buying bulk is on my mind, I thought I'd share with you details about the how's, the why's, and the making it as frugal as possible aspects of this purchase.

Why did I decide to make a bulk purchase now? Well, the last bulk purchase I made was in December and that's a good 7 months ago already. When I buy food in bulk, I buy it because I'm able to get things cheaper that way, but in order to do that, I have to purchase the food in really large quantities. Last time I shopped, the food lasted me a good 7 months, but we've been out of oats for a good 3 weeks, been out of coconut oil for a month, and we finished our last bits of powdered milk a few days ago.
I hate paying full price for anything. (Ok, almost anything.) We were just going without coconut oil or oats, but my family can't really manage without milk, and when the milk powder ran out, I grudgingly paid full price for 2 liters of milk and decided that that's it- we're making a bulk purchase as soon as we can!
The other reason I decided to make the bulk purchase now is that I'm officially and completely gluten free now, and gluten free baking products are expensive, no matter how you purchase them, but if you manage to buy them in bulk, they become only moderately expensive instead of dreadfully expensive. The longer I was going on a gluten free diet without making a bulk purchase, the more money I was spending unnecessarily that could potentially be avoided.

When I make bulk purchases, it's not as simple as going to the store and buying bulk. The store is far away from my home (around 40 miles). Gas is hideously expensive and on top of that, I don't have a car. While I manage on a day to day basis without a car by traveling via buses, lugging 350 pounds of food home by bus is just not a doable option. I could potentially borrow or rent a car to go there, but after paying for the car and for the gas to travel there, my savings wouldn't be nearly as much as they could possibly have been. The store does make deliveries if you make orders above 200 dollars, but they don't come to my town and I'd have to find a way to pick up the food from the nearest city.
Because I wanted to buy bulk in this far out place, I started asking around if anyone was anyhow driving to the general area where the bulk store was. Chipping in for the gas money and paying them something for their time and effort to take me along and drive me to the bulk store to make my purchase ends up being less costly than making the drive out there for no purpose other than to buy bulk. 
When buying bulk from a place that is a great distance from your home, it is worth combining the trip there with another errand you'd do anyhow, or carpool with someone else who'd also like to buy bulk, so that the money spent on traveling doesn't end up being more than the amount you saved via buying bulk.

For my purchase, I looked through the company's catalog and noted which of their products interested me. I got a price quote, and boy, was I floored! 
The products that had interested me were 50 lbs of powdered milk, 50 lbs of sunflower seeds, 50 lbs of almonds,  25 lbs of walnuts, 30 lbs of chocolate chips, 2.5 lbs of unflavored gelatin, 4.5 lbs citric acid, 50 lbs of dried coconut, 40 lbs of coconut oil, and 50 lbs of potato flakes. The grand total of the price quote reached a whopping   $1420!
No way. Uh uh. Not happening. It doesn't matter if they're good prices or not, laying out $1420 in one go on something like food was just not. an. option. Emptying out an emergency fund or scraping the bottom of the barrel to buy food in bulk is not a wise decision, because then all your money is tied up in food, and if a true emergency comes up, you won't have money to pay those bills. (Usually, anyhow.)

I decided that I needed to cut back. Cut out a lot of the predicted price by taking out what I didn't need, what was most expensive, and what afforded the least savings.
First cut was the gelatin, 50 dollars. It would have been nice to get, but I wasn't sure how much gelatin cost in the store, so I wasn't sure how much savings there would be, and I didn't need gelatin. That was an extra, so off it came.
Chocolate chips would have been the next to cross off the list. They're definitely an extra, but the savings are really great. (They're a third the price of what they cost in the grocery store.) The only reason I didn't cut these off my list was that I wasn't planning on keeping any for myself- I was selling every last pound to friends who were interested in purchasing choc chips at that low of a price but didn't want to buy a whole 30 lbs. Instead, I'm being the middleman and they're each getting 5 pounds at a really low price.

Once I cut off the gelatin, it was a really hard decision to know what to cut out. 
Oats? They're at an amazing price, my family will eat them daily for breakfast, they can be made into gluten free flour (though I'm trying to minimize how many oats I eat)... 
Coconut oil? No way- I've been waiting to buy this already for months and months, it has so many health benefits and uses, both culinary and cosmetically. 
Coconut flakes? They're pretty cheap when purchased in bulk, are very filling, have many health benefits, and can be used to make coconut milk and coconut flour, great gluten and milk alternatives. 
Sunflower seeds? They are filling like nuts, are full of healthy fats, and are the cheapest "nuts" available. 
Powdered milk? A huuuuge amount of money to spend at once, and even a lot to pay per pound, but once I calculated how much I was paying for the reconstituted milk, I saw it is a fraction of the cost of buying regular milk... 
Dehydrated potato flakes? Now that I'm gluten free, I sometimes have a hard time coming up with a quick meal for those extra busy days, and instant mashed potatoes work as a great base for such a meal. I also calculated that at the price I was paying, the potato flakes made into mashed potatoes worked out cheaper than making mashed potatoes from fresh spuds.

With a heavy heart, I realized that the almonds and the walnuts needed to go. Though I really wanted to experiment with almond meal and walnut meal in gluten free cooking, laying out 260 dollars at once on almonds and 150 dollars on walnuts was just not a smart move. While the prices were decent enough, they wasn't enough of a significant savings to make it worth tying up 410 dollars in nuts to potentially save a little bit of money. 

By cutting those things out and sticking to just the essentials, I was able to lower the cost of our bulk order to "only" $750, which may seem like a lot at first, but if I use these things at the same rate as I did last time, they'd last me a good 10-12 months, making the purchase work out to 60-75 dollars per month, not such a high number after all.

But even so, 750 dollars tied up in food at one go is a lot, no question about it, so what I attempt to do is purchase things that would also interest other people I know. By doing this, I can get the savings offered by purchasing 50 pounds of a product in one go, but I dont need to store or lay out the money for 50 pounds worth of a specific product. Of the foods I purchased, I already knew before buying that people planned to buy all the chocolate chips off of me, approximately half the oats, half the powdered milk, half the citric acid, a quarter of the coconut oil, and a quarter of the sunflower seeds. Being as the powdered milk alone was costing me 280 dollars, having the prior knowledge that someone else was buying half of it off me meant that I was able to deduct 140 dollars from that alone from the 750 I was spending on the bulk.

This post might have seemed like it was going in many different directions, but there were a few specific money saving points that I wanted to bring out.
When purchasing in bulk:
  • It is not wise to empty out your bank account to purchase in bulk, even if it means great savings. Use your grocery budget, a special bulk foods budget, or other extras to make your bulk food purchases, NOT your emergency fund. Buying bulk is not an emergency, and if you spend your emergency fund on bulk, you will be up a creek without a paddle should there be an emergency, which there inevitably will be once you spend your emergency fund.
  • Try to find bulk food sources close to home so you don't need to spend too much on transportation to purchase the bulk food. Alternatively, try to find a way to lessen the cost of purchasing far away by carpooling or shopping when you anyhow are in the area. Make sure to calculate the cost of traveling when figuring out potential savings by buying bulk to make sure it is cost effective.
  • Only tie up large amounts of money in food if there are significant enough savings to make it worthwhile.
  • Try to split bulk orders so you don't need to lay out as much money at once.
Do you buy bulk foods? What do you buy in bulk and how do you decide what to buy? Do you spread your bulk purchases throughout the year or do you do like I do and make large bulk orders relatively infrequently? What are your tips to keeping your bulk purchases as frugal as possible?

Linking up to Pennywise Platter

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