Should You Join a Members-Only Warehouse Club?

For some people, the only way to shop is big. There are stores that cater only to people who want to buy big and store big without spending big. Called warehouse clubs, wholesale clubs, or members-only clubs, the three major American stores that sell wholesale to regular people are BJ’s, Costco, and Sam’s Club. All three offer similar products, atmosphere, and prices. All come with upsides as well as negatives, and all three have loyal customer bases that wouldn’t shop anywhere else.

Here’s a guide to the big wholesale clubs.

Pros

Gas

One of the long-term benefits of buying in bulk at a club store is that you save on gas. This happens in a few different ways. First, the clubs sell gas. Although oil – and, therefore, gas – prices, like all commodities, fluctuate and are subject to a complicated and constantly changing blend of political, social, and market forces, gas prices at the big clubs are competitive and often lower than that at surrounding gas stations. Second, when you buy in bulk, you drive to the store less frequently, thereby saving money on gas you don’t use on trips you would have otherwise taken.

Non-Essential Items

When most people think of Costco, BJ’s, or Sam’s, they usually think of two-pound boxes of Cheerios and bags of marshmallows the size of pillowcases. But it’s non-food items that often bring the biggest savings.

The clubs sell almost everything. ATV’s, dining room furniture, stereos, swing sets, and virtually anything else you can imagine can all be purchased at the clubs, all at very competitive prices. Their electronics usually come with warranties that run dramatically longer than those offered by the manufacturer. Costco allows returns for up to 90 days on computers and electronics, three times longer than at Best Buy. They also have a truly underrated specialty, luxury, and exotic food section. From crab legs to filet mignon to caviar, their luxury food is highly rated and significantly cheaper than single-unit competitors.

Low Prices

All members-only warehouse clubs are based on the age-old principle of wholesale vs. retail: Whether it’s pineapples, mitre saws, or heroin, the more units you buy at once, the less you pay per unit. Buying in bulk is cheaper. There is no argument to the contrary.

Then why does retail exist? Why wouldn’t everybody simply buy wholesale to reap the financial benefits of purchasing in bulk? Because wholesaling comes with drawbacks. Here are the cons.

Cons

Space

The problem of buying in bulk is, well, bulk. Wholesalers own warehouses, which are huge empty spaces to put all that stuff. For people who have big families, houses with pantries, closets, basements, attics, or lots of cabinet space, buying in bulk makes sense. Food gets eaten and stuff gets used more quickly – and the surplus can be tucked away. For a couple that lives in a small one-bedroom apartment by themselves with a chihuahua, a 50-pound bag of dog food is likely going to spend a long time under your bed.

You save money at club stores by buying items that are sometimes almost comically large. Perishable food perishes if you can’t eat everything you bought. Make sure you have room in your house for the 200-count toilet paper case that you just saved all that money on, or it could become your new coffee table.

Membership Fees

Some clubs, you have to pay to join. All three of the big wholesale clubs fit into that category. Membership fees are purchased annually. BJ’s will run you $45, Costco will set you back $50 for the year, and the lowest of all, Sam’s Club, is $40. All have varying cancellation and refund policies. BJ’s is the only one to accept manufacturers’ coupons. For non-members, BJ’s has the highest surcharge at 15 percent. The lowest surcharge is offered by Costco, at 5 percent.

Other Considerations

Booze and Medicine

Although not all clubs have liquor stores, and laws vary widely state by state, the ones that do often allow non-members (of legal age, of course) to shop there. The stores are well stocked and often sell at 35 percent less than the supermarket.

For prescription medication, the clubs have some of the lowest prices anywhere in the country. By law, they must sell prescription drugs to anyone, even non-members.

New Age, New Products

Wholesale stores have evolved, however, into the modern era. In an effort to compete with the major banks for the financial needs of the American public, it’s been reported that the clubs are finding success in financial loan markets.

For some Costco members, the biggest item they’ll purchase through Costco is a house. Costco offer mortgages through local brokers – they compete with the mortgage giants by, among other things, capping fees for their members. Members can find good deals on auto loans through the big three – on the Internet for Sam’s and BJ’s members and through local dealers for Costco. All offer no-haggling, as-is prices. All three offer credit cards with interest rates that are generally competitive with those offered by the banks.

Wholesale clubs make perfect sense for some shoppers and no sense at all for others. They all offer a free day for you to shop as a trial period to help you decide. Take them up on their offer and see if it’s right for you. Decide if you think the fee is worth it and then be honest about how much space and how many mouths you have in your household. After that, clear out the pantry and go shopping.


Andrew Lisa is a freelance writer living in Los Angeles. He writes about bargain shopping and Internet marketing, and gives advice on how to rank first on Google.

One thought on “Should You Join a Members-Only Warehouse Club?

  1. I love Costco and can’t live without them. Buying bulk makes me to use my time to go less grocery and their produces and meats are always fresh and their turnover is really high. Haha

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