Why is Buying Items in Bulk Cheaper?

There are a number of reasons why buying certain items in bulk is a good idea: it’s better for the environment (less packaging waste), it saves you trips to the store (especially if you’re buying online), and if you have a house full of voracious eaters, it can help ensure your kitchen cabinets stay stocked longer.

But one of the main reasons one third of all shoppers are buying in bulk is to save money.¹ Even if the price tags look intimidating on the front end, research has found that shoppers making bulk purchases can save an average of 25%.²

So, if you’ve ever wondered, does buying in bulk save money, the answer is a resounding yes. But why is buying in bulk cheaper? In this article, we’ll take a look at six reasons why buying in bulk can save you money.

Why Companies Offer Bulk Prices

Bulk buying can almost seem like taking advantage of a loophole, but the truth is that most manufacturers would probably love it if more of us became bulk shoppers. Take a look below at four reasons why companies can afford to offer bulk purchase discounts.

An Incentive to Buy More

Companies are always looking for ways to increase their profit margin—the difference between their costs per product and the total amount of money they make from the sale.

However, in most cases, manufacturers are willing to take a considerably lower profit margin in order to make a bigger overall sale.

This practice, known as wholesaling, is how companies sell their products to retailers, where most customers purchase them. Those retailers then markup the prices to cover their own costs and make their own profit margins.

Through bulk pricing practices, manufacturers can essentially offer a wholesale price directly to the consumer.

More Efficient Production

When more units of a product are produced at the same time, production becomes more efficient. In other words, manufacturers spend less time, use fewer materials, and utilize less labor per unit.

This is known as economies of scale, and many companies are happy to share the savings from bulky production runs with consumers in the form of bulk pricing.

Less Packaging

A product’s packaging accounts for about 10% of its price.³ But when items are packaged in bulk, less packaging is required.

And this reduction in packaging doesn’t just mean savings for the manufacturer and the consumer—as a bonus, it also means less packaging waste. So, if you’re looking for ways to reduce plastic packaging buying bulk is the way to go.

Decreased Distribution Costs

The process of individual product distribution from manufacturers to various retailers requires time, labor, and fuel—all of which add to an individual product’s retail price. However, products that are packaged and purchased in bulk require less distribution, lowering overall manufacturer distribution costs and, in turn, the final sale price.

Why Buying in Bulk Is Cheaper for Consumers

Ready to learn how to buy in bulk? Lower manufacturer costs are only part of the reason why buying in bulk quantity is more affordable for consumers. Other reasons include:

Elimination of Retail Expenses

As mentioned above, the price you pay for individual products at a retail store includes a markup over the manufacturer’s price so that the store can pay for expenses like rent, utilities, employee wages, and other costs of doing business.

While most of us like the convenience of a local grocery store for perishable household items like milk and eggs, purchasing non-perishable items in bulk from a wholesale store prevents you from having to pay these markups.

Fewer Trips to the Store

Fewer trips to the store mean fewer purchases in general, but there are other ways this bulk buying benefit can help you save money. For instance:

• Less gas – 88% of households drive to the grocery store for an average round trip of four miles.⁴ Considering the cost of gas, reducing the number of grocery store runs in your routine can lead to serious savings.

• Fewer impulse purchases – Grocery stores can often tempt us with sales on items we don’t actually need or indulgences we end up impulse buying while we’re standing in line at the register. Even if individual price tags aren’t huge, those impulse purchases can easily add up over time.

Reel Paper, Real Savings

From manufacturer savings to savings on gas, buying in bulk can significantly reduce how much you spend on non-perishable items you regularly rely on, like bamboo toilet paper and paper towels. But what about buying bulk toilet paper that saves you money while saving the planet?

At Reel Paper, we make 100% tree-free, plastic-free toilet paper, paper towels, and tissues that start at a better value than comparable retail brand products and help protect our planet. Plus, with our subscription plans, you can save even more and get your products shipped for free right to your door. (That means less money spent on gas and less environmental pollution.)

For bulk buying that’s good for you and good for the planet, choose Reel Paper.

Sources:

1. The Penny Hoarder. How Buying in Bulk Can Save You Money Right Now. https://www.thepennyhoarder.com/save-money/buying-in-bulk/
2. MagnifyMoney. Consumers Can Save 25% by Shopping in Bulk, but Is It Always Worth It? https://www.magnifymoney.com/news/bulk-buying-study/
3. Finch. The Pros, Cons, and Environmental Impacts of Buying in Bulk. https://choosefinch.com/blog/cheaper-by-the-dozen