Wait what? A personal finance blogger who is all about retiring early is urging people to buy more stuff? Blasphemy, witchery, shenanigans, and other terrible terms. But wait it actually makes sense. When a person can’t purchase more stuff they inherently spend more money than the person who can buy more stuff. How can this possibly make sense?
Let’s start off with simple economics of buying more and buying in bulk. Say you like Mayo, like REALLY like Mayo. You put it on your sandwiches, french fries, and yes even your Egg McMuffin (true story I used to have a daily customer who added this condiment to their favorite McDelicacy) and you go through enough of it that you buy it weekly. Larger jars tend to be more cost effective, notice I said tend and not definitively more cost effective.
So why is buying more usually cheaper? Simply put it costs a company less to make a larger product. You have less packaging, less materials to build, and are selling more product. Inherently they are more profitable, which is why you see companies selling those ridiculous sizes of some products. It’s why a 2.6 oz small fries at McDonald’s will cost you $1.39, the 3.9 oz medium $1.79, and that 5.6 oz large only runs $1.89. Selling in bulk means that more and more product can be purchased for less.
Poor people, and I don’t mean that in any mean way, buy only what they can afford. It’s why you can buy one roll of toilet paper. But it’s also why that one roll costs a premium. Ever notice how that one roll might cost you two dollars at a convenience store? I won’t hold it against you if you haven’t look, but it’s true. Small batches create premium prices. This is why paying attention to what you are spending and buying in bulk is important. Don’t waste money on things that you will clearly use within their useful shelf life.
This is the next important point of buying in bulk. Buy stuff that you will use within the useful shelf life. If you aren’t going to use it before it goes bad, bulk is not for you. I have friends who continually throw away food that perishes because they see the bulk product and it looks fantastic, but then either they don’t get through it before it goes bad or they tire of it and just let it expire because they thought they would consume more of it than they did. Only buy things that you know you will go through. Paper towels or similar products have no expiration date, see a good deal knock yourself out. Bulk fruit or vegetables perish quickly so buying a bag of 30 apples may result in you wasting money.
Next check the price, sales happen and bulk could be that many little ones are better than one big one. Don’t assume that the larger one is the best priced one. Time and time again people think about how much they use and gravitate towards the larger bottle. I find that to be a poor decision because pricing per ounce changes. Case in point I use Franks Red Hot on everything, yes just like their tagline. So when I see a deal I stock up since it’s a product that won’t expire on me. Last time I needed it the big bottles were actually more expensive by $0.12 an ounce. Granted this is small change, but small change leads to large changes over time. Pay attention to the price per unit on the sticker or calculate it out yourself if they don’t have it. It’s always best to think it through.
Know what your store stocks that does well and what may not be the most fresh. Club stores are your best and worst friend. They can sell you an amazing amount of product for a fraction of the price of traditional retailers. I love Costco, they have some amazing products, cheaper gas, and who can say no to snacks sprinkled throughout the store. That being said they are not always the cheapest price so understand what they excel at and what they don’t.
As a single male I’m not going to go through a crate of apples unless I really like apples. However I will go through a tub of salad mix in a week and not waste it. That’s a good value to me because those crate of salad mix are way more cost effective than my Albertson’s equivalent AND they stay fresher longer. I know Costco produce will last me longer too so I may be willing to chance it and buy that bigger serving because it might last, but it will still be more cost effective if I have to toss a bit. Knowing what your store is good at value wise is just as important as buying more because that more needs to last.