See the results of our 2022 Personal Finance Study!
The Best Wholesale Shopping Clubs: Are They Worth It?
Warehouse clubs tend to offer some of the best prices available as long as you are willing to pay an annual fee and have room in your home for enough paper towels to dry a small nation.
These discount stores offer low prices and additional perks that are generally closed to nonmembers. Three of the major warehouse retailers in the United States are Costco, BJ’s, and Sam’s Club.
The club store that makes the most sense for you will likely depend on the most convenient option in your area. Still, there are some slight differences between the warehouse stores, so we’ll give you a free sample, and then you can make a price comparison to decide which club membership -- or club memberships -- make sense for you.
Shopping clubs: What are they?
Groucho Marx said that he would not want to join a club that would have him as a member, but he was probably unaware of the savings on toilet paper, food items, and even electronics like Apple products he could have gotten through wholesale shopping clubs.
Wholesale shopping clubs offer a much better price-per-muffin -- or whatever you are choosing to buy -- than the alternative options. Sounds pretty good, right? So what is the catch? There are two.
Catch No. 1: Membership fees
Typical warehouse shopping clubs require you to pay a regular membership fee. Yes, this is in addition to the cost of the groceries you are buying. That means you could end up losing money if you do not frequently take advantage of your membership. Depending on the store, nonmembers may be able to use a gift card or can have a partial membership gifted to them.
Catch No. 2: Bulk purchasing
Most of the products at stores like Costco and Sam’s Club are sold in bulk. Assuming you have the room in your home for large quantities of nonperishable goods, or have a need for a product you use quickly and frequently, that may be the lowest price option for you. New parents: Think diapers, formula, and wipes. But if you are looking to buy a 5 pound bag of eggs, you may need to plan out some enormous omelettes to avoid throwing away your hard-earned goods.
The first Costco opened in San Diego inside a converted airplane hangar in 1976 and was not a Costco at all. It was called Price Club and served businesses rather than individual consumers.
In 1983 the first Costco opened in Seattle. In 1993 the two companies fell in love and merged to become PriceCostco before Justin Timberlake told them them to drop the “price” from their name because just “Costco” would be cleaner.
The previous sentence may have contained a little bit of exaggeration. Today Costco has more than 700 locations across 11 countries. Perhaps there is even one near you. If there is, you could choose one of the various Costco membership plans that works best for you to gain access to deals on bulk goods, a random assortment of electronics, trampolines, gas, and much more.
And then there is the food. Aside from the free samples that could serve as lunch if you are savvy and shameless enough to piece together a meal from them, there are some cheap giant hot dogs and pizza slices available to round out your trip. If you don’t require certain name brands, Costco’s Kirkland Signature line offers full high-quality grocery store options for less money than many other store brands.
Finally they have a very generous return policy. With the exception of certain items, you can get a full refund any time.
BJ’s Wholesale Club was founded just a year after Costco on the East Coast. It has not expanded as widely as Costco with more than 200 locations in 17 states.
Your choice between the two may depend more on which club is most accessible for your location. There are some differences in membership costs, so it is worth making a comparison if you do have more than one option nearby. Their return policy is also a little bit more restrictive.
Sam’s Club is Walmart’s answer to the wholesale club sector, and was founded in 1983. Is it a coincidence that all three of these competitors launched around the same time?
Was there corporate espionage? Multiple people having the same idea at the same time? Some new law or regulation that allowed wholesale clubs to launch all over the country when they could not have before? There is probably an actual reason for it, but we are too busy telling you whether membership to one of these clubs is worth it to find out at the moment.
Sam’s Club membership is similar in price to the other clubs and has nearly 600 locations across four countries.
Is it worth it?
As said earlier, the ultimate determination of whether or not a wholesale club is worth it comes down to your personal shopping routine. If you will be shopping at the club often enough and can manage the volume of bulk products in your home, wholesale clubs can offer literally hundreds of dollars in savings per year.
Each of the clubs also offer their own credit cards, like the Sam’s Club Mastercard, which may be worth using if the benefits work in your favor. If you do decide to get a credit card, always be certain to pay off your entire bill, in full, every month so that you will not have to deal with interest.
Now go out and “bulk up,” if you decide it is worth it to you!