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Does Buying in Bulk Save Money, or is it a False Economy?

posted by martyb on Monday September 25 2017, @10:33PM   Printer-friendly
from the what-does-Betteridge-buy? dept.

Phoenix666 writes:

The entire big box economy is a big honking subsidy to people with cars living in the suburbs by the poor, the singles, the seniors, the urban, the cyclists.

It only works because of the highways and the parking lots and the infrastructure paid for by everyone (road taxes do not cover the cost of the roads) and enjoyed by the drivers. The companies charge twice as much for small packages as big ones because they can; the purchasers without cars and access to the big boxes, the ability to drive between the Walmart and the Costco and the Price Club, don't have a choice.

Read on for Treehugger's reasons. Is bulk buying bad after all?

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  • (Score: 1) by khallow on Wednesday September 27 2017, @02:31AM (2 children)

    by khallow (3766) Subscriber Badge on Wednesday September 27 2017, @02:31AM (#573623) Journal
    Let's keep in mind that the business isn't making huge profit off of those membership fees. That's not the point of them. The point is to create an sunk cost for the customer to recoup and thus, an incentive to visit the store and buy serious amounts of goods. It also keeps out the window shoppers, and a good portion of shoplifters and other criminals. In other words, it's a filter that weeds out poor customers from the business's point of view.

    Even the gift card trick works moderately to the business's advantage (which is yet another reason not to treat it as an ethical dilemma). They don't get the $50 or so per year, but they do get a repeat customer which what they wanted all along.

  • (Score: 1) by j-beda on Wednesday September 27 2017, @06:25PM (1 child)

    by j-beda (6342) on Wednesday September 27 2017, @06:25PM (#573938) Homepage

    Costco's membership fees do seem to be a significant source of their profits:

    http://www.investopedia.com/articles/investing/071015/3-reasons-costco-has-membership-fees.asp [investopedia.com]

    "....

    In the volatile world that is the grocery business, Costco has a way to ensure a steady source of income: membership fees. In 2016 alone, the company's 86.7 million members worldwide brought in $2.6 billion in membership fees.

    Revenues from membership fees are great. Aside from a few minutes of an employee’s time, plus the cost of the card and subsequent promotional mailings, managing membership isn't too costly. As such, Costco’s $2.6 billion in membership fee revenue is almost entirely profit.

    When you consider that in 2016, Costco’s operating income was only $3.6 billion, you can see why the company needs membership fees to stay in business. Thankfully, its membership numbers keep growing: they were up 8% in 2014, 6% in 2015 and 9% in 2016. "

    • (Score: 1) by khallow on Wednesday September 27 2017, @07:54PM

      by khallow (3766) Subscriber Badge on Wednesday September 27 2017, @07:54PM (#573993) Journal
      How about that. I stand corrected.