How to make wholesale clubs worth the cost | College of Business Administration | Kent State University

How to make wholesale clubs worth the cost

Big discounts await shoppers at wholesale membership clubs like Sam's Club, BJ's and Costco, and shoppers swear by them to save money.










Some grocers have begun packaging items such as meat in bulk as they try to lure back some shoppers. "A lot of supermarkets have moved to club packs where you can buy a whole group of chicken breasts and cut them apart and freeze them for later use," Allen said.


But it's hard to compare prices between a buying club and a regular store because of the bundled quantities of the items. That can skew the per-unit cost.

"So the idea of being able to say I normally pay X for this, versus getting it in the supermarket, is a very difficult comparison unless you're really doing some strong research," Allen said.


"A lot of consumers don't realize they're tying up their cash flow. It's like business. Businesses don't like having too much inventory; families shouldn't have too much inventory either. When your cash flow is tied up, what happens? You can't spend money on other things," he said.


"For households on tight budgets, you don't want to tie up your cash flow. You may have to pay for ... visits to the emergency room or something like that and you don't have the money," he said, adding that families on tight budgets should stick to other retailers, such as dollar stores, and not spend the money on a membership, he added.

Part of how the stores make money is on the memberships -- which sometimes are refunded at the store's discretion, Allen said. Having a membership increases a person's store loyalty, Mills said, and can lead to overspending.

"Many customers spend more than they otherwise would because they pay the membership fee, (then) they are committed -- sort of 'locked in' due to the expense of the membership and buy more than they really would normally want," Mills said.



Impulse shopping is difficult to avoid, said Mills, who advised buyers to go in with a list and stick with it. But that can be hard.



"Fifty-five dollars a year (is) one dinner at Chili's. That's what we're talking about to make a year-long commitment to my family to buying groceries, which is something we buy all the time. We're talking about spending thousands of dollars each year.

"Fifty-five dollars is not much in the grand scheme of things. Individuals should not shop at Costco. Families should."


POSTED: Thursday, April 10, 2014 - 4:00am
UPDATED: Tuesday, August 9, 2016 - 12:32pm