Most people have heard of wholesale clubs, even if they have never actually shopped at one. Wholesale clubs are those large warehouse-style shopping centers, such as BJ’s and Costco, where items are sold in large quantity packages to shoppers who buy memberships to the club. The idea behind wholesale, or warehouse, clubs is that the vendor buys products in bulk at a discount, enabling them to then sell the products at a discount to club members. But many wonder if the prices are, in fact, discounted and if it’s worth it to buy products at wholesale clubs instead of the neighborhood grocery store.
The question of whether prices are discounted often depends on the product. Some products are no more of a bargain than you would find at the grocery store, while others are cheaper, and still others are actually more expensive. You must have an idea of the going rate for the products you buy in order to get the best deals at wholesale clubs. If you simply buy all the items you need at a warehouse club without doing comparison shopping, you may end up paying more for some items than you would at your normal market.
Comparison shopping among grocery stores is fairly easy. You simply compare face-value prices. Wholesale clubs require an extra step. Because the quantities are so large at wholesale clubs, the prices can seem very high, but those prices may be deceiving. Some products are, in fact, cheaper when you look at the cost broken down into the unit price. The unit price is the price per individual “unit” of the product. The key is to make sure that you are comparing the same “units.”
For instance, the club may be selling canned tomatoes in packages of four cans. So at first, it may seem that the cans are the unit. Divide the price by four and see how it compares to a can of tomatoes at the grocery store, right? Not quite. The cans at the warehouse club are likely to be larger than what’s offered at a grocery store. So, in that case, you need a different unit – one that is the same in both places. For tomatoes, a good choice is ounces. Calculate the price per ounce on the wholesale club tomatoes and the price per ounce of the grocery store tomatoes. That gives an accurate comparison.
It requires a little extra effort to comparison shop at wholesale clubs since the product sizes are so different than those at grocery stores, but you figure out pretty quickly which items on your list are routinely less expensive at a warehouse club and don’t need to keep recalculating that every time unless you notice that the prices have changed. Once you have the hang of it, unit-price comparison is not difficult to do, and the extra effort can really pay off in savings.