Buying Wholesale

One of Dave's callers asks what he thinks about big warehouse stores like Sam's and Costco.

QUESTION: Listener on Twitter wants to know what Dave thinks about wholesale club memberships.

Dave's ANSWER: I'm a member of Costco and Sam's. We don't buy everything there. Does it make you enough on some things to justify the small annual fee? I obviously think so, or I wouldn't be doing it. The big danger is who needs nine gallons of mustard?

Unless you're in the restaurant business, don't buy nine gallons of mustard. The point is that those places sell a lot of things in bulk at a level that you don’t need. Since you don't need it at that level, you don't buy it at that level and you don’t buy it there. You've got to shop and you've got to know your values.

I can guarantee this: Sharon Ramsey knows what she can buy at Costco or Sam's at a deal and what she can't. She does not do the deal where she just goes and buys 27 of anything unless there are 27 people coming that night that need one of each. The danger is the overbuying.

People do overspend in those situations, and it's really dangerous. I think the reason they check your receipt when you're leaving against the items that you purchased is because it's almost like federal law that you spend $200 in there. They check to make sure you spent your $200 because people just impulse their tails off in those situations.

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