Smart Shopping: Buying Small and Buying in Bulk

Smart shopping is one of the best ways to save money or stick to our budget. And there are two good ways to do so: buying small, and buying in bulk.

Both are great strategies but only when properly applied to our situation. And finding the strategy that best applies to us is the topic we'll tackle in this article.

Buying Small

Buying small is basically buying only what we need and no more. It doesn't just mean having a list, though (we should have list every time we shop, even when buying in bulk). What it means is buying only the quantity we will need until the next payday and no more.

  • This approach is best when buying food and other perishables. They might expire or spoil before we get to consume them.
  • It is a great strategy for people with limited cash flow. Depending on our budget, we might not want to use up a lot of money buying excess items because our budget might run out before buying everything we need
  • The smaller sizes of course have a lower price, enabling us to buy all the necessities we will need until the next pay day.

  • The smaller sizes indeed have lower prices, but costs more per volume. This means that in the long run, we're actually spending more.
  • Buying in small quantities also means we're spending time and money traveling to the store regularly. Even if it's nearby, it can still add to the cost.

As an example, I tend to buy food on a weekly basis. It's hard enough to visualize what I would like to cook (or have time to cook) this week, let alone the next two weeks.

And although meat, if properly frozen, can last months, other products like bread, vegetables and fruits have a more limited life span. And it's all too easy to forget about them until they spoil. And letting food spoil just because I don't feel like eating them yet or because I didn't have the time to cook is a terrible waste.

Buying in Bulk

Buying in bulk means buying as much as you can of the product you need.  This means buying the biggest size available - and buying several of them if possible. If a product doesn't expire for a year or more, you can theoretically buy a year's worth of supplies. This applies only to products that don't expire or take a long time to expire. But we should use this only for the products we really need and use regularly.

  • At first glance this is a costly proposal, and indeed it does entail a  large expense upfront. But because the larger sizes cost less per volume, we're actually saving money in the long run.
  • Prices tend to go up in time. So if we bought a year's supply at the old, lower price then that just adds to what we've saved by the end of the year (compared to what we would have spent that year if we bought the small sizes regularly - especially if the prices increased mid-year).
  • Buying in bulk means spending less on "overhead" costs such as traveling to the store.
  • If we buy in bulk when an item goes on sale, the savings are enormous. (But sales of everyday products like toiletries and other necessities are rather rare and unpredictable, so it can be difficult to time this.)

  • A large, upfront expense makes this impractical unless we have a large budget.
  • It's inconvenient to transport a year's supply of anything (unless you have your own car).
  • Storage. Theoretically we can buy as much as two years' worth of certain products like soap, but where will we keep them?
  • Having a large amount of anything can lead to improper use and waste. So we should remember that while there's a lot, it needs to last a long time too.

I remember an episode of The Big Bang Theory, where Sheldon suggests to Penny that she buy 30+ years worth of tampons. It was quite funny. But essentially that's what bulk buying is. We are guarding against future price increases, taking advantage of the cost effectiveness of mass production, and lowering the "overhead" cost of acquiring the items - but in more practical quantities, of course. :)

So which is better, buying small or buying in bulk? Actually, neither is better. We should use both strategies whenever we shop.

The most efficient way is to take time to write down our shopping needs and determine the proper strategy for each item (buy small or buy in bulk). And if we track the prices of the items, we can estimate how much our shopping  would cost and how it compares to our budget.

We can then adjust our shopping list as needed. If the cost exceeds our budget, we can decide to primarily buy small. If there is room in our budget, we can buy in bulk so that next time we shop we can have "extra" money to buy other items in bulk (and thereby increase our savings).

I hope you found this article helpful. And if you would like to receive more money saving tips, please subscribe to The Personal Finance Apprentice or follow us on twitter and facebook.

photo credit: Stitch via photopin cc

No comments:

Post a Comment