If there's no volume discount, does buying in bulk still make sense?
If they don't spoil, you can still get some marginal benefit if buying in bulk means you avoid the need for a trip to the shops to get a replacement. If the item is a commodity that you will use eventually you are unlikely to lose out as the prices tend to remain fairly stable. There's also the inconvenience factor, I like to have plenty of some items so I'm not caught short, consider how important your furnace is in mid winter, or the inconvenience of running out of an item right when you need it. Let me add a counterpoint.  I don't know about you, but for some psychological reason, when I know I have an abundance of something I tend to be less frugal about the way I consume it.  For example: When there is a six pack of cokes in the fridge I feel like I am more prone to not drink them up so quickly so I have some for later on. However, if I knew I had 3 more cases in the pantry, I seem to go through a lot more of them. As with everything else, it's a question of trade-offs. Pros For Buying In Bulk Cons For Buying In Bulk Inventory cost. You need to purchase more shelving/cupboards to stock the goods.  This is a real cost. The psychological effect of having more means you are more likely to use more, thus costing you more. Deflation of the cost of the item should occur over time in a well-functioning market economy.  A $10 item today might be $9.50 in one year in real terms. There is a real opportunity cost associated with overbuying.  Granted, an extra $100 in your bank account won't be earning too much if you have to spend it one month later, but it does mean you have less financial independence for that month. Risk of spoilage.  There is a nonzero risk that your goods could be ruined by flood/fire/toddler/klutz damage. You need to decide which of these pros and cons are more important to you.  Financially, you should only buy what you need between shopping trips.  In reality the convenience of holding goods in storage for when you need them may outweigh the costs. To Rich Seller's point, we live 1/2 gallon of gas and 30 minute round trip from the supermarket.  For the items that are non-perishable, such as bathroom or facial tissue, paper towels, shampoo,soap, toothpaste, etc, there's value in never running out of it.  (@JohnFx - your point is well taken. When my daughter was a toddler, I found her covered in band-aids. One tiny scratch, 9 band-aids. My wife asked why I was concerned, we had hundreds in the pantry. I can see how some items might just encourage over-use) I agree with Rich Seller.  Avoiding a trip to the store is a benefit.  Not only do you save the time and hassle, but there's real money saved if a car trip is avoided: I maintain a spreadsheet for all of my car expenses – depreciation, maintenance, insurance, license & registration, gas, etc. Combined with starting & ending odometer readings for the year, I can see exactly what it costs me to drive one kilometre.  Granted, some costs are fixed simply by virtue of having the car, but gasoline is a variable cost avoided when a trip is avoided. It could be a sunk cost.  If you buy 5 gallons of vegetable oil it costs $50.  Until you use up all the vegetable oil you dollars are tied up and cannot be spent on popcorn or any other good. So weigh if the convenience is more important than having the cash on hand for other purchases is another factor to consider There is a trade-off. It can be worthwhile because you save those extra trips. (On the other hand, don't you need to go shopping all the time for perishable items anyway?) On the other hand, having those items on stock implies inventory costs (the space they take up might be limited, the money they represent is sleeping and cannot be put to other usage, some of them might break...). This trade-off gives you the economic order quantity. Your stock levels over time based on that would look like a saw-blade. In addition, you might want to keep a safety stock for emergencies (if you use them faster than expected, if there is a supply shortage...). Instead of buying in bulk, I invest the money in equity mutual funds, for an expected return of 12%, which is more than inflation. So, I make more returns. But at the cost of a slight risk, which I'm comfortable with.
"I disagree. I believe money should be invested, not spent. Investing is something you should do as early as possible, even (especially) before incurring personal debt, such as cars, houses, student loans, etc. As Warren Buffet says, delaying investment until you are all paid up, is like saving sex for your old age. Remember that you are considering an investment, not another expense. The only consideration is whether or not the property will be cashflow-positive, i.e. ""does it make more in rent than it costs to maintain?"". If it is, buy it. You can use the income to pay off those debts faster, and at the end you will still have the income stream. Second, it makes no sense to use all your cash when the bank is willing to lend you money. There is nothing wrong with debt, as long as it is attached to an asset, i.e. something that makes more money than it costs. If you have that much cash, buy several apartment buildings, hire a management company, and retire." I know that for me personally, if I buy that giant box of Goldfish instead of the bags, it doesn't mean I'm saving money... just eating a lot more Goldfish.  The trick, I think, to buying in bulk is to make sure that you're not consuming in bulk.  You're not likely to go through more dishwasher detergent just because you bought the big bottle, but you may find the kids are eating a lot more fruit snacks, or you're throwing away half of that huge bag of baby carrots that went bad, because you bought in bulk. If you will be there 5-6 years it could be viable. Here are some of the cost considerations: There may be some more fees, but that should be the bulk of it - You'll have to do the math on all of the above and see which makes sense :) * stop buying smarthphones * buy dry food in 'bulk', larger packs * Don't go to restaurants, cafés * Don't travel * Don't live in a city where the average rent = $1200  * Don't follow hypes  There are many poor people who are poor because of their poor decision making skills. Competition, or actually lack of competition, mostly due to a demand curve that has minimal change due to price. You would buy the equivalent, cheaper option if it was available, but the store has little interest in offering multiple, competing options that would drive their same store revenue down. And the competing stores (Grocery, Department, Drug, Card) have similar overhead costs (floor space, lights, personnel). Most carry the cards for incremental revenue, and observe little advantage to lower price for a card (customers seldom buy more cards due to a lower price). Thus they mark the price to what (most) customers are willing to pay. You may choose to shop the various stores and find the one that has a (slightly) better pricing for cards, and then stop at that store when you want to buy a card. But many cards are sold as an incremental purchase as part of a larger shopping trip (convenience), as the customer combines trips (reduce the time spent shopping, albeit not reducing the money spent). I'm not a finance guy by trade, I'm an accountant, so I'm not 100% sure, but I'm going to say no.   EBITDA is your accounting profit before interest, taxes, depreciation and amortization. So it's already free of many non-cash items, and is closer to a cash-basis measure of profit, but still includes many non-cash revenues.   As far as I know, the discounting is to take the time value of money into account so you can make a decision on whether the present value of the expected future cash flows are greater than the present value of the cash outflow being asked today. If it is, then you buy. If not, then you don't. You're implying that Whole Foods' margins on many items is [in the 30% - 40% range.](http://i.imgur.com/xUG4lOw.png)  That's much higher than I would have expected.   My guess is they'll be scrapping the most expensive product lines, though - the whole trade organic, for example. "Well, one could almost instead think of it as a swap, with no set maturity date. While it might not make sense for most investors, it could be useful to, say, a restaurant or someone who simply *really* likes wines.   But yes, from the ""mechanics"" of it, it doesn't make sense. It'd be close to a royalty in that way; taking physical inventory instead, thus costs are there, revenue isn't.   I'll flesh it out a bit more mentally, but meh. Just an off-the-wall thought."