I used to think I knew something about bulk shopping. I was the queen of stocking up on toilet paper when it simultaneously went on sale at three different retailers. I took advantage of double and triple coupon promotions to buy enough cereal to last my family almost an entire year. But the fact is, I was just fooling myself. Because these days, you can’t say bulk shopping without saying Costco, Sam’s Club, or BJ’s.
When my husband and I were first married, we had a membership to BJ’s Wholesale Club. The reason was simple: it was the closest grocery store (and I use the words “grocery store” lightly here) to our house, plus membership came with a steep discount on gas and – you guessed it – BJ’s also was the closest gas station to our house. It was a no-brainer. We bought everything at BJ’s: food, gas, our first bedroom furniture, a new TV, a washer/dryer combo. It was our one-stop shop.
But when we moved, the nearest BJ’s ended up being more than 70 miles away, so we let our membership expire. Within a year, we were moving again – this time to a large city with a BJ’s, a Costco, and a Sam’s Club. We promised ourselves we’d buy a membership to one of these three bulk retailers once we figured out which one was right for us.
It’s been almost six years, and we still haven’t made any decisions.
Let’s begin with the facts:
- Basic annual membership cost: $55
- Membership tiers: 3 (Gold Star, Business, & Executive)
- Store locations: 590 locations in 41 states and more than half a dozen foreign countries
- Number of members: 60 million
Costco made headlines this spring for rolling out a nationwide home mortgage system. The program actually links homebuyers to a third party lender, with Costco as the middle-man. Costco says if the program continues to do well (it performed well in a pilot program in 2011), then the company may start offering student and car loans as well.
Who is Sam? Sam’s Club is actually named after Sam Walton. Name strike a bell? That’s because Sam Walton is the founder of Walmart.
- Basic annual membership cost: $40
- Membership tiers: 4 (Advantage, Advantage Plus, Business & Business Plus); also offers special memberships for college students and members of the military
- Store locations: 610 locations in all 50 states and four foreign countries
- Number of members: 47 million
Like it’s sister company, Walmart, Sam’s Club is known among the three bulk retail giants for its low prices on every day items. It was the first of the three bulk retailers to start offering paperless in-house coupons. Sam’s Club also boasts a full pharmacy, which also comes with steep discounts.
BJ’s Wholesale Club
BJ’s is the baby of the group, founded in 1984 – a whole year after Sam’s Club and Costco.
- Basic annual membership cost: $50
- Membership tiers: 3 (Inner Circle, Business, BJ’s Rewards)
- Store locations: 190 locations in 15 states, all located east of the Mississippi River
- Number of members: 9 million
BJ’s has made a name for itself thanks to several in-house brands, like the Berkeley & Jensen and Executive Choice private labels. Additionally, BJ’s is the only one of the three bulk retailers that accepts manufacturers’ coupons as well as its own in-store coupons.
Is Bulk Shopping Worth It?
I watched a really interesting documentary about Costco last week on CNBC (“The Costco Craze” - check it out of you have time), that outlined how these bulk retailers make their money. Basically, the business structure allows Costco to break even on the products and services it sells its customers; almost 100% of the company’s profits come from annual membership fees.
And it’s those membership fees that you really have to evaluate when choosing which bulk retailer is right for you. Are you going to be able to recoup your $55 membership fee at Costco? Or are you going to spend more money than you should, simply because you can?
For my family, we’re just about equidistant from a BJ’s, Costco, and Sam’s Club. In each case, we’d have to drive about 20 minutes – through heavy traffic – to any of these locations. Combine that with the membership fee and the temptation to spend money on things I don’t need, and I finally know why I’ve put off making a decision on which club to join: because I don’t need to join any of them.
Reader, do you belong to one of these bulk retail clubs? Which one did you choose, and why?