I know, it’s been a while. But I’m back here. Really, in 2010 you’re going to see a lot more posted here. I’m not happy with the relatively low article count here and I know the rest of you probably are not either.
For those that never really understood it, I’m going to write a quick little blurb on buying in bulk and unit pricing. This is also going to debut what’s going to be a new standard on this blog: use of the ISO non-country-specific currency symbol ¤ where the actual unit doesn’t really matter. Feel free to mentally replace ¤ with $, £, €, ¥, etc. and adjust.
Unit pricing is calculated by taking the price of the item and dividing by the amount of product contained within. It is important to know how to calculate unit pricing because sometimes stores mark down smaller price items and sometimes these smaller size items are temporarily a better deal than buying the larger size items.
Consider the following example for a store’s regular prices (plausible, but completely fictitious, I just made these up):
¤0.60 for a 12 oz. (355 mL) can of soda
¤2.50 for a six-pack of 12 oz. cans of soda (72 oz., 2.13 L)
¤4.50 for a twelve-pack of 12 oz. cans of soda (144 oz., 4.26 L)
¤1.90 for a 2 L bottle of soda
¤2.75 for a 3 L bottle of soda
Calculating unit prices for all of these (per liter, just for an example, rounded off to the nearest ¤0.01/L):
¤0.60 / 0.355 L = ¤1.69/L
¤2.50 / 2.13 L = ¤1.17/L
¤4.50 / 4.26 L = ¤1.05/L
¤1.90 / 2 L = ¤0.95/L
¤2.75 / 3 L = ¤0.92/L
As you can see, the 3 L bottle is the best deal, judging by unit price. Now, that does not always mean it is the best deal. Certain circumstances may make large bottles impractical, such as when one is hosting a party. To go along with those bottled sodas, one must then purchase plastic cups, keep ice handy, etc. When going on a road trip it’s much easier to throw twelve cans in an ice-filled cooler and drink straight out of the can, versus fiddling with larger bottles and cups. If inconvenience outweighs the lower cost, it’s not really a better deal at all.
Now, let’s say this particular supermarket marks down the 2L bottles to ¤1.60. The new unit price then becomes:
¤1.60 / 2 L = ¤0.80/L
One can easily see this works out well for the observant shopper (and yes, this really does happen, it's beyond the scope of this post for me to elaborate why). Another example, assuming the above markdown is no longer in effect, and this market has instead marked down twelve-packs of cans to ¤3.80:
¤3.80 / 4.26 L = ¤0.89/L
This would be the best available price, beating out even the regular price for 3L bottles (this also happens in the real world, but is a bit rarer as packaging is much more expensive than the soda itself, especially when aluminum is involved.).
There are cases, however, where it does not make sense to buy in bulk, particularly for items with limited shelf life: milk, fruit juices, butter, meats, and even in some cases sugar, flour, salt, and similar items.
There is also one's current situation to consider. The reason stores (especially corner/convenience stores) sell single cans or bottles of soda (at a unit price typically twice that of a six- or twelve-pack) is that it is often more convenient to buy a single item than bother storing and carrying around a larger package. Use this to your advantage: if you're with a couple of buddies, instead of everyone grabbing a single can of soda, consider splitting a six- or twelve-pack or a 2L bottle; even after everyone buys a cup of ice, you are still very likely to come out ahead!
