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Aug 15, 2008

The Pros and Cons of Buying in Bulk

Before you join a warehouse club, consider the good and the bad.

In the current economic crunch, you might feel the lure of warehouse clubs more than ever. And you wouldn't be alone: While Costco and BJ's Wholesale Club, two of the top three warehouse clubs, reported revenue increases of up to 19 percent in June 2008 compared with the previous year, overall retail and food service sales in the United States for the same period saw a jump of just 3 percent according to U.S. Census Bureau data. But is joining a warehouse club, and coughing up a membership fee of $35 or more, the right move for you? Consider the following pros and cons:

Pro: The price is right.
Shopping at a wholesale club can reap an average savings of 40 to 60 percent on everything from toilet paper to ketchup

not every item comes at a deep discount--fruits, vegetables, meat, and interestingly cat litter are often about the same price found at a supermarket--most do. For example, while a 46-ounce jar of pickles costs about $4.00 at the grocery store, a 128-ounce jar of the same product costs only about $.10 more at a wholesale club.

Con: How many mouths do you need to feed?
The problem with a 128-ounce jar of pickles is the amount of time it will take you and your family to go through it. If your clan consists of you and your spouse, you're lucky if you can go through a standard-size jar in a year, and depending on who you ask, that's long past the acceptable shelf life of an opened jar of pickles. Even pantry staples such as cereal, tea, and flour have less longevity than you'd expect (cereal peters out at two months, flour at four, and tea at 18). So before you stock up at a warehouse club, you should familiarize yourself with the life span of the foods you need. Of course, if you have a ravenous household of large proportions, then buying in bulk may be the only way to go.

Pro: You can get a lot more than just food and household items

Most warehouse clubs also offer health and beauty items, office and school supplies, furniture, electronics, computers, and appliances. You can even find discounts on health-care plans, prescriptions, and travel packages. Although the money you'll save on some things is very small, other savings can be quite significant.

Con: Storage space is key.
If you're thinking of buying 12 rolls of paper towels, 170 ounces of laundry detergent, 12 six-ounce cans of tuna, and five pounds of frozen turkey meat, but you have nowhere to stash these items, you'll only be wasting your money. Therefore you should ensure that you have ample room in your pantry, refrigerator, and freezer before you decide to invest in a warehouse club.