Is Shopping at Costco or BJ’s Really Cheaper? The Truth About Wholesale Savings

When I put it in my shopping cart, that 24-pack of canned mushrooms seemed like a great deal. But six months later, there are still 18 cans taking up room in my cupboard. Conversely, with my three-pack of lettuce, two heads spoiled before I could make that much salad.

These are a couple of the obvious money-wasting pitfalls of shopping at Costco. Less obvious are all of those impulse buys, which can really add up.

“Costco and other warehouse-style retailers look simple at the front end, but behind the scenes, they run lean wholesale machines,” says cost-analysis expert Blake DeWitt. “They are great for people who know how to work the model. They are expensive for everyone else.”

Here’s more about how wholesale pricing works, which items are deals and which are duds, plus other ways to actually save money by shopping at Costco.

The Appeal of Wholesale and Bulk Shopping

Warehouse stores, such as Costco, offer a wide range of food, household, and DIY supplies all under one roof. Because they sell in bulk, their price per unit is often lower than that of standard stores, making them good places for stocking up on frequently consumed items.

But sometimes that value is only perceived, not actual. “Warehouse‑style shopping, by volume and quantity, is set up to make you feel like you are really stretching your buck with every swipe of the card,” says DeWitt. “It is true for some items. It is not true for others.”

How Wholesale Pricing Works

Wholesale stores generally maintains razor-thin margins on staple products, then higher ones on impulse and seasonal items, says consumer finance expert Shay Ramani.

It also works directly with brands to secure lower prices than regular retailers can offer. “Because they can sell at a higher volume, they can cut a better deal with those brands and manufacturers, and have more wiggle room in their margins to still turn a profit even with great prices,” says consumer-savings expert Andrea Woroch.

What Is Actually Cheaper at Wholesale Stores?

Costco typically excels with deals on:

• Non-perishable food staples, like large bags of rice and canned vegetables;
• Paper products, like plates and towels;
• Hygiene basics, including toilet paper;
• Home consumables, like lightbulbs and cleaning products;
• DIY supplies, like contractor bags, shop towels and bulk batteries;
• Ready-to-cook meals, especially when there’s an instant discount;
• Gift card bundles, like restaurants with 10% to 30% off;
• Travel, including car rentals and vacation packages.

Certain power-tool bundles can also be a good value. “Seasonal kits and multi-battery packs can beat DIY retailers if the batteries fit your current platform and the warranty terms are comparable,” says Ramani. “But if the extras don’t serve you, the apparent bundle saving disappears.”

What Isn‘t Cheaper at Wholesale Stores?

• Produce, bread and other baked goods, unless you’re going to use a large amount of them promptly;
• Over-the-counter medicine. “These can become ineffective after the expiration date passes, leading to waste,” says Woroch.
• Big ticket durable goods and specialty items, like some furniture, toys and tools.

Also, beware of the “impulse aisles,” says Ramani. “They are designed for margin, and you’ll often pay more for things you didn’t plan to buy.”

Hidden Costs of Wholesale Stores

If you’re not a savvy wholesale shopper, you can end up spending a lot more than you intended. Some pitfalls include:

• Perishable foods, such as bulk vegetables and baked goods, tend to spoil before you can consume them all.
• Nonperishable food, in quantities large enough to clutter up your pantry. “Buying 25 pounds of flour only helps you if you bake regularly,” says DeWitt.
• Impulse buys of items you don’t need, but get just because they seemed like a good deal.
• Credit card interest, from higher check-out totals. “Although you’re getting a better value in the long run, if you can’t pay it off in full, the interest will take away your savings,” says Woroch.
• The membership fee, which encourages greater spending. “It pressures members to overspend, to rationalize the whole idea,” says spending-savings expert Sean Markey.

Markey was so interested in whether warehouse stores actually saved customers money, he kept track of his household spending and its return on investment (ROI) for six months. What he found was that nearly 20% of the bulk food he bought spoiled. When his family started going to the regular grocery store instead, not much food spoiled, and they reduced net spending by 15%, even though they paid more on a per-item basis.

Real Savings vs. Perceived Savings

Real savings occur when the cost per item is lower than your usual price, after accounting for waste from spoiled items, the membership cost, and any additional travel and time.

“Perceived savings come from big packs that look cheap, inflated RRPs (recommended retail prices) and promos for things you didn’t intend to buy,” says Ramani. “The quick test is to keep a small price book for your staples and compare costs.”

Perceived cost savings can also be prompted by discount price tags, which trigger an emotional reward center in our minds. “People will buy bigger or in bulk because they assume the larger it is, the better it is,” says DeWitt. Instead, “Buy exactly what you’ll use, not what ‘might be useful.'”

FAQ

How do I store bulk purchases so they don’t go to waste?

For nonperishable foods, such as canned goods, rotate the stock as you store it, putting newer items in the back and eating older ones first. Store moderately sensitive items, like crackers, cereal and coffee, in airtight containers labeled with their purchase dates.

For perishable foods, like meats you don’t plan on eating right away, separate them into meal-size portions, label them with the date, then vacuum seal and freeze them. “You can freeze select produce as well,” says Woroch. “Otherwise, cook it and then freeze it for easy reheating later.”

How can I avoid overspending when shopping in bulk?

• Make a list, based on what items you need to replenish, and stick to it.
• Avoid aisles with goods that you don’t need, so you don’t get tempted.
• Use promos only when they match what you already buy.
• Keep receipts and audit your numbers occasionally to see if the membership is paying off.
• Don’t shop hungry. “Have a small snack before you shop or grab a cheap slice of pizza at their food court before shopping,” says Woroch.

Also, avoid impulse buying. “If you come across an unplanned purchase, tell yourself you will come back to it after you go about the rest of your shopping,” says Woroch. “If it’s not something you really need, chances are you will forget about it and save yourself money.”

About the Experts

• Andrea Woroch is a nationally recognized consumer-savings expert who has been covering deals at warehouse club stores for over 15 years.
• Blake DeWitt is founder and CEO at Investorade. As a real estate and construction entrepreneur, he works closely with material cost analysis.
• Sean Markey is founder of LocalSEO.net. His work focuses on eliminating wasteful spending and maximizing true return on investment, whether for a marketing campaign or a grocery budget.
• Shay Ramani is a consumer finance and money‑saving expert, and founder of Freepricecompare.com. He has more than 10 years of experience analyzing unit prices, membership trade-offs and total cost of ownership.

The post Is Shopping at Costco or BJ’s Really Cheaper? The Truth About Wholesale Savings appeared first on Family Handyman.

For top-notch cleaning services, look no further than mj cleaning services, where quality and customer satisfaction are our top priorities. Whether you're in need of a one-time cleaning or ongoing maintenance, m j cleaning services offers a wide range of options to suit your requirements. With a reputation for excellence, m.j. cleaning services delivers professional and reliable cleaning solutions to ensure your home or office stays pristine and welcoming.