Spending

'I would strongly recommend against' buying in bulk right now, says supply chain expert: Here's why

In some cases, buying in bulk can "can lead you to overspend and even waste money," one expert says.

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Buying in bulk is a shopping strategy that can often save you money. However, with a truck driver shortage and shipping delays slowing down the supply chain, buying more than you need right now could backfire, says Scott Grawe, chair of the department of supply chain management at Iowa State University.

"In regards to buying in bulk, I would strongly recommend against doing that because it will cause additional problems in the supply chain," he says.

Here's why he suggests you think twice before buying bigger quantities of household goods than you need.

The supply chain is already stressed

With stores already struggling to keep up with demand, panic buying large quantities could result in not everyone being able to get the goods they need, Grawe says. "Firms are making adjustments to their operations to try to ensure that customers are able to get the product that they need when they need it," he says. "Large purchases disrupt firms' abilities to accomplish this."

When customers suddenly begin buying in bulk, it "creates a false demand signal," he says.

If shoppers start buying a ton of toilet paper, for example, it could encourage stores to increase their orders, which will further slow down the supply chain, even though extra toilet paper isn't really needed.

"Paper companies will be faced with more orders than they can handle and will likely fail in their efforts to keep up," Grawe says. "In reality, however, people are not going to be using the toilet paper any differently than they have before. They have just pulled inventory away from the retailer and other customers and put that inventory into their own homes."

The smallest change in demand can have lasting effects on the supply chain, says Karan Girotra, a professor of operations, technology, and information management at Cornell University. "Bulk buying makes demand for products more volatile, unpredictable, and 'bunchy,'" he says. "In a stressed supply chain with little slack, even a little bit of volatility can have ripple effects and lead to many disruptions and delays."

Buying in bulk could also force stores to implement purchase limits, as Costco is already planning to do, says Julie Ramhold, consumer analyst with DealNews.com. "Beware that if the buying limits are maxing out, these retailers could impose stricter limits in order to make their supplies last longer," she says.

Buying in bulk doesn't always make sense

Assuming you have the storage space, buying in bulk can save you money, if the cost per unit will be less than when you buy individual items. And with purchase limits looming, you might fall victim to filling up your cart and panic shopping.

Sometimes buying in large quantities doesn't make sense, though, says consumer savings expert Andrea Woroch. "Shoppers often assume that buying everything in bulk is going to be the best bargain, but in some cases this can lead you to overspend and even waste money," she says.

Beware that if the buying limits are maxing out, these retailers could impose stricter limits in order to make their supplies last longer.
Julie Ramhold
consumer analyst with DealNews.com

You might not want to buy perishable items in mass quantities, for example, she says: "If you buy foods like fruits or vegetables or meat in bulk but don't plan carefully, you could run the risk of this food spoiling before you get a chance to consume it."

And while bulk buying might be less costly in the long run, you almost always end up spending more money at the register. If you're using a credit card, it's important to make sure you can afford to pay it off later.

"When you buy everything in bulk at once, you can rack up a credit card bill that becomes harder to manage, and you end up carrying a balance from month to month. Whatever you purchased in bulk is now more expensive thanks to the interest you're paying on those items," she says. "If you prefer to buy certain items in bulk like toilet paper and paper towels or cleaning supplies, do so in a way that you spread these out so you don't rack up a big credit card bill."

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