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Money Myth Buster: Buy in bulk

03/12/07

Posted under Millionaires, Money Myth Busters, Saving money

MONEY Myth Buster of the week: Buying in bulk saves time and money.

Walter Mart, Price Smart, and the now-defunct Super Sale Club attracted a lot of buyers using this marketing strategy. I remember watching frazzled mommies cart away boxes of noodles and bags of different-flavored cereals with my own overflowing cart in tow. Time to do some Money Myth Busting to find out if this tip really holds water.

Money Smarts went shopping (how I love being a journalist! :) ) and asked a lot of mommies for this blog entry. The result of the Myth Busting session? Goods in sachets are extremely expensive, especially shampoo — but all other sizes have almost the same prices.

In SM Hypermarket, (no plugging here, it so happens that SM is close to where I live) a sachet of Rejoice shampoo costs P21.75. That’s a 10ml pack. The next-bigger size is a 200ml upside-down tube that costs P86.75, then a 400ml tube for P155 and a 750ml bottle sold for P300.

If you buy a 200ml tube of Rejoice using sachet price, you’ll be paying around P435! That’s more than five times more expensive. But here’s the weird part, buying two 400ml tubes is cheaper than buying the bigger sizes. The same goes for Head and Shoulders shampoo.

With my newfound understanding, I march to the condiment section. I remember shopping in Price Smart where you can only buy big Silver Swan plastic bottles. A close look at prices shows that it doesn’t pay to buy in bulk at all! In fact, the medium-sized bottle (500ml) is most expensive. The refill pack and the big bottles cost P0.025 per one ml. I groan as I remember that most of my money ended up at the bottom of the bottle as a dark, grainy liquid that I couldn’t use even as a marinade. How in the world can you use up a two-liter bottle of soy sauce in a month for a family of four?

Again, the same goes for canola oil and Pride detergent. It’s different for sugar, though. I got a P1.45 discount for buying a 2.5-kilo pack of Hermano sugar as opposed to a one-kilo pack.

There’s another consideration aside from price. Goods can get spoiled and can be used irresponsibly. If you buy products good for two months to get the discount, and use them all up in a month, you have actually overspent and not realized it. Also remember that veggies can wilt and canned goods have expiration dates. That huge slab of cheese can look like a great bargain, until you start eating out because you’re tired of macaroni-and-cheese, spaghetti with a lot of cheese… you get the picture.

So there you go. Instead of mindlessly buying in bulk, buy wisely. For mommies in the grocery, let me add this: Buy what you need — and get the hell out of there!

Till next week on Money Myth Buster.





14 Feedbacks on "Money Myth Buster: Buy in bulk"



aLEX YALUNG

In other countries, SALE!! will save you a lot. Why in the philippines “SALE” is not a very popular strategy for department store..



salve

Oh it is, Alex. A lot of people are sale-crazy here too. It can get so bad that they cause traffic jams especially in December. But i think you have to be very, very careful when you go to the malls during sale season because it is so easy to buy things you don’t really need. Don’t you all have something in the house you bought on sale that has not been used until now? Me.. (looking around).. i guess I’m pretty disciplined now hehe. I try to avoid mall sales unless i really need to buy something.



Sonnie

As a matter of practice, I don’t buy anything for myself unless it is sale– no not the 10% off, at least 20% and the buy one take one offer.

I window shop first then watch for the item go on sale either during sale season or if the the product is slow moving.

If feasible, I go to branches wherein the product I want could be slow moving, thus, a greater chance of getting a discount.



Nina

Alex, I think in other contries, they can give very large discounts during the sale season because they have a greater profit margin. If you notice, you don’t really get huge discounts for grocery items in the Phils because the supermarkets have very little mark-up on that (we used to have a grocery store and our mark-up is anywehre between 3-5%). In the supermarkets they have high overhead cost for rentals, salaries, etc. Although for clothes and shoes, you can get as much as 80% during the sale season but normally, these are for broken sizes and last piece items so the selection and availability of sizes are limited. In other countries, they normally have end of season sale in which they really drop the prices…I guess, because nobody will buy a regular-priced winter coat after winter…they just have to dispose it.



salve

HI Sonnie, thats a pretty good tip. Do you live here in Metro Manila? I discovered some time ago, no actually my husband did, that if you compare prices from different establishments, you will eventually find a shop that offers the same product at a much lower price. Bottomline: no impulse buying. Thanks for dropping by!



Jayvee

is it enough to choose what size to get by dividing the cost per unit (pesos per gallon / ounces) and comparing across the board? i usually debate on doggie food this way.



salve

Hi jayvee, yes, to me thats the best way. Its easier to compare when you compute the unit cost, unfortunately some don’t want to bother. I haven’t been inside PriceSmart lately, but they used to display the price of each item plus the unit cost. Di ba, you would see for example a big bag of Tootsie Roll (revealing here my sweet tooth haha), so they would display the total cost of the whole bag AND the cost per candy. Isn’t that blissfully convenient? I wish more groceries will do that.



lzkazr

at a ministop store, you can buy a rejoice sachet worth 5 or 6 bucks? why 21 pesos at SM? maybe they’re in bundles of 4.



Mark D

i agree with setting your “discount” criteria before buying anything. my minimum is 20%. and i find it helpful that i live in bacolod where “sale season” isn’t very often so i end up spending less each year because i’m somewhat forced to buy only the things that i need. by the way, this may not be concentric with the topic but there are many seasonal sales in UP Campus for branded apparel and stuff that offer as much as 70% discount. of course, it’s still important to stick to your needs, but if you’d have to give in to your “luho,” at least they’re now heavily discounted. oh, and for ladies, i have a close friend who buys her “Mango” stuff really really cheap! like 90% off!!! but that’s a trade secret. hehehe. ;)



salve

hey mark, i heard about those 70% discounts in UP too! I heard from a vendor that these are export overruns, but so what right? same with the stuff people buy in greenhills, i think :)



db

I asked my mother before why she prefers buying those shampoo in sachets and the answer was that so my sister and father won’t use it like there’s no tomorrow. we computed as you did and we both agreed that our problem really is the ‘discipline’ in using enough for a day’s hair =)



G

hahahah i saw that funny behaviour with shampoo prices before in shopwise festival, and i’m like what the f*** hahahaha but my gf says the pricing of those was already adjusted to be more sensible now, but to this day i dunno why the marketing/sales people of those shampoos thought this was a smart pricing strategy, it simply defies logic, not to mention destroys brand equity for people who get wise, you feel you’re getting ripped off for buying in bulk



Peter

In the UK, most groceries and even convenience stores show the price of the item and under it the price per unit (GBP/litre).

I think we need to suggest to DTI to require our price tags to follow the same.



allan

Peter is quite right. If you go to a wholesaler they display the bulk price and then the “per piece” plus the VAT if applicable (basic foodstuff normally dont have VAT here) the other Pinoys I know and me as well usually buy stuff to fill balikbayan box in a warehouse store similar to Macro to maximise the benefit of bulk buying. Like what Salve had said what would you do with a load of stuff that you may actually get tired of using after awhile? What we do is “hati-an” which also means we divide the cost and then it wouldnt be too much for one person. Commodity pricing is under the jurisdiction of the DTI so I suppose they should be aware of these practices of luring people to think that buying in these “sachets” actually isnt consumer friendly. Maybe we should give consumer watchdogs a bit of a nudge…



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