Warehouse clubs such as Sam’s Club, Costco and BJ’s Wholesale Club are marketed to consumers as great places to find bargains on all kinds of goods, particularly items sold in bulk. However, their prices aren’t…
Warehouse clubs such as Sam’s Club, Costco and BJ’s Wholesale Club are marketed to consumers as great places to find bargains on all kinds of goods, particularly items sold in bulk. However, their prices aren’t always a big savings, especially when you consider the price of membership. Many discount grocers offer comparable prices on the goods you can find at a warehouse club.
That’s not to say you can’t find a great deal of value from a warehouse club membership, but you have to focus on the areas where a membership can save you money. For most customers, there are three major areas that will provide enough savings throughout the year to pay for a warehouse club membership. Those products are:
— Bulk purchases of nonperishable items
— Big individual purchase such as tires or electronics
For each of these items, you can easily figure out if they’ll save you enough money over the course of a year to make a membership worthwhile. Here’s how to do it.
Many warehouse clubs sell gasoline to members at a price that’s approximately 5 cents to 10 cents per gallon less expensive than at nearby gas stations. This alone saves enough to make it worth making it your regular gas station if you drive by it frequently, but not enough if you’re going significantly out of your way to refill.
Thus, if you happen to regularly drive by the warehouse club on your commute, check the gas price and compare it to gas prices at other stations along your commute. Note how often you fill up and how much the warehouse price club would save per fueling stop. For example, if you fill up weekly and buy 10 gallons of gas, and the warehouse club would save you 7 cents per gallon, then the club would save you 70 cents per week or $36.40 per year.
In general, if you’re using a membership to fill up two cars weekly, the gas savings alone will pay for the membership.
Do a Price Comparison of Household Supplies Online
Warehouse club memberships tend to offer their best value with their store brands, which are generally high-quality products for a low price. Both Member’s Mark (at Sam’s Club) and Kirkland Signature (at Costco) are highly regarded in terms of quality and price across all types of household supplies and often rank highly in comparative rankings in publications such as Consumer Reports. They are frequently marked as “best buys” for being among the least expensive options while also being near the top in quality.
However, store brand items are generally only available in bulk quantities at warehouse clubs. In order to save money, you’ll need to be able to buy those large quantities and store them. You’ll also need to use them up before they expire while saving enough over the course of a year to make such purchases worth the cost of a membership.
To determine whether a membership is worth it, compare the price of warehouse club household supplies such as trash bags, toilet paper and dishwasher detergent using the warehouse club website and the website of your preferred local grocer or department store. Will you actually save enough over the course of a year on club-brand household supplies to make a membership worthwhile? How often do you do the laundry or use up a roll of toilet paper in your home? Use those calculations to figure out the savings for each household product.
What you’ll often find is that there’s not nearly enough savings for a single person to make a membership worthwhile, but in a household with three or more people, the savings add up.
Do a Price Comparison Online for an Upcoming Major Purchase
Warehouse clubs tend to offer strong prices for home electronics (particularly televisions and laptop computers) and car tires and appliances. Often, warehouse club prices on those items beat both local and online competitors for items of similar quality, but you’ll want to research the specific purchase yourself.
If you find that you’ll save enough on a major warehouse club purchase to pay for a year’s membership (or more), then it’s worth it to join the warehouse club for that purchase alone. Any other savings are a bonus.
If These Cases Don’t Apply to You, Be Wary of Buying a Membership
Instead of joining a warehouse club, look for friends who are members and go shopping with them for a few purchases. You might find that using a friend’s membership can help save you money when buying a television or stocking up on some household supplies.
In short, a warehouse club is worthwhile when you can save enough money using that membership to pay the annual fee without changing your lifestyle routines and habits. If you have to make changes in order to “save,” then the warehouse club membership likely isn’t worth it for you.