If you've ever visited Costco, you've most likely seen the dark side of buying in bulk: People can't seem to resist the four gallons of ketchup, boxes of diapers and shampoo.
The allure of buying in bulk seems to have only increased as shoppers feel the pinch in their bank accounts.
Wholeseller Costco recently announced a 17% increase in net sales compared to the same quarter last year.
And when the grocery chain Supervalu tested out whether shoppers would prefer 10 for $10 deals versus five for $5, results showed people spent more when the promotion was 10 for $10.
In fact, 60% of respondents in an Acosta Marketing Group survey said they stock up on a category even when its not on sale, and 23% admitted they make fewer grocery trips compared to a year ago.
But should consumers buy in bulk just because they can?
"One of the biggest mistakes people make is that they think they'll use something up, but they end up throwing most of it away," Parker Hurlburt, vice president of research for Acosta tells Business Insider. "The other mistake [they make] is that they don't compare sale prices to bulk prices.'"
Consumers don't have to buy in bulk to get a deal if they don't need that much stuff.
We've compiled the pros and cons.
Membership fees. Both Costco and BJ's Wholesale Club have their standard fees listed at $50. Starting on November 1, Cosco will increase its annual membership fees by $5, while Sam's Club provides memberships for prices ranging from $35 to $100. That's costly.
Budgeting. It's easy to get carried away when buying in bulk, but you'll have to pay more up front, says Sweating The Big Stuff.
Expired shelf life. If you can't use up your purchases before they expire, it's a waste of money to buy in bulk no matter how much money you're saving. It's essential to know how much you use something and relate it to the shelf life, advises The Simple Dollar.
Storage. Make sure you have enough space for all your stuff, says Sweating The Big Stuff.
Savings. Buying in bulk is typically less expensive per unit, says Sweating The Big Stuff. If you have a big enough family and have room to store all your purchases, go ahead.
Fewer shopping trips. Although it can be inconvenient to make more frequent shopping trips, consumers are also cutting back due to rising gas prices.
Refrain from lugging boxes to the register merely because it's available in bulk. Consider what you're buying: Are you actually saving money? Figure out what the per unit price of the purchase would be if you only bought one.
Source : http://www.businessinsider.com/are-you-really-getting-a-better-value-when-you-buy-in-bulk-2011-10