Warehouse Clubs Offer Bulk, But Is It a Bargain?

Whether it be high end goods like organic foods or staples like dish detergent, warehouse clubs have plenty on hand.

warehouse-shoppingBuying in volume
In fact, the warehouse clubs are so called because of their cavernous size and bulk approach to selling, with, for instance, paper towels coming in 36-packs or even bigger. Entry to all of them is through an annual “membership” fee—$45 at Sam’s Club, $50 at BJ’s and $55 at Costco. The premise for paying to shop there is that costs at the clubs are lower than most stores, and indeed they are—in many cases.

But it is necessary to do a considerable amount of shopping to earn back your membership money and you must buy in bulk. This makes perfect sense with some products, such as mouthwash and soap. But it can be a problem with products that don’t store well. Unless you’re sure you can (and want to) eat five pounds of cheese before it goes bad, the extra food is just a waste of money.

Impulse buys
Warehouse clubs are crammed with an incredible variety of goods. Even if all you want to buy is cereal, milk, and toothbrushes, you’ll probably have to walk past TV sets, clothes, and toys to get to those three staples. This makes it very easy to fall victim to temptation and walk out with a whole cart full of impulse buys.

Where the deals are
With such a vast assortment of goods gathered together in one store, warehouse stores may seem ideal for one-stop shopping. However, while these stores offer great bargains on some items, their prices on others are disappointing. For instance, warehouse stores aren’t your best choice for appliances, as their selection is limited and they don’t offer the frequent sales you’ll find at other stores. Also, neither Costco nor Sam’s Club accepts manufacturer’s coupons. BJ’s takes them, but only in paper form—the stores aren’t set up to take mobile coupons.

And you can get better prices on brand names like Coca-Cola and Tide detergent by looking for a sale—or better yet, stacking a sale with a coupon—at your local supermarket.

But there are bargains to be had for those who want to buy an assortment of items at once and shoppers who have the room to stock up on items they know are more expensive elsewhere.

Perhaps surprisingly, when it comes to overall price, television station WCPO in Cincinnati found in its own survey that retail giant Amazon—which is not known as a bulk seller—was actually more expensive than Costco and Sam’s Club when it came to everyday merchandise. WCPO even figured in Prime pricing.

Club membership requires you carry a card for access, except during promotional periods. So you do have a window once or twice a year to kick the tires, so to speak, as well as look at prices of the products you most often buy.

Worth it?
Weighing the pros and cons, how do you know whether a warehouse store is worth it for you?

The best way to answer this question is to get inside the warehouse club and scout up and down the aisles. Check prices on the items you buy regularly, jot the prices down on paper (or make a note of them on your phone), then compare them to the prices at your local supermarket.

Overall, the shopping experience at any of the big three doesn’t differ much—and doesn’t disappoint. In a survey by consumer researcher Temkin Group, 6,000 shoppers ranked companies based on customer service. Costco ranked third, behind Amazon and Kohl’s, with 79 percent of survey respondents giving it an “excellent” or “good” rating. Sam’s Club and BJ’s were close, however, at 78 percent.

Resources: Forbes, Money Crashers