They promise huge savings, freebies and advance notices of specials. But many wholesale and buyers clubs require members to pay membership fees, and other clubs charge high shipping and handling fees on delivered goods. How much will you really save when you join a buyers club? We zero in on some of the more popular clubs in the country to find out.
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You likely remember their name from your mail in the 1990s - flyer after flyer promising CDs for a penny each. Well, since no one buys compact discs anymore, Columbia House has become a DVD buyers club, instead offering deals like "Get three movies for $1 each" when you join the club. But once you've selected your three freebies, you must buy three more DVD or Blu-ray discs at regular price, plus shipping and handling, within one year.
After this, you can decide whether you want to cancel your membership or continue on. At prices starting at $19.95, plus the $3.95 shipping and handling fee per item, plus the $3 on the original deal, each DVD will end up costing approximately $12.45 before tax. Compare that to prices advertised at on Walmart.com, where newer titles are listed between $16 and $21, Columbia House may in fact save you a few dollars.
This self-described "warehouse savings" outlet offers numerous products, from appliances to car services to groceries, and they have a variety of types of memberships to choose from as well. A basic membership for you and one other family member will run you about $40 each year to gain entry to any location nationwide, or to order online for pick-up the following day. (Learn more about smart shopping, read 5 Money-Saving Shopping Tips.)
A quick price comparison scan comes up with the following results: At Walmart (NYSE:WMT), "The Dark Knight" Blu-ray with Bat-Pod Display case costs $39.96; at Sam's Club, $48.23. At Walmart, a Kalorik 4-slice toaster is priced at $44.95 to buy online; at Sam's Club, it's $42.18, shipping included.
Doubleday Book Club
This long-time discount bookseller has been in the business for 80 years, and much like Columbia House, offers incentives based on you promising to buy books at regular price down the line. They offer five books for 99 cents each plus free shipping when you sign up, as long as you buy four books at regular price plus shipping and processing. You can also choose to buy a sixth book with the introductory offer for $5.99, and then buy just three books at regular price in the next year.
If Doubleday prices are between $12.99 and $18.99 as advertised in their membership agreement, then with the five books for 99 cents, plus the sixth book for 5.99, plus shipping and handling at about $3.95 for the final three books, then you'll be paying between $6.89 and $8.86 per book. Not bad - depending on the selection of titles.
BJ's Wholesale Club
This east coast wholesale retailer is similar to Sam's Club, but with a focus on electronics, office and home products; you won't find groceries here. For a 12-month membership, customers pay $45, and for additional membership cards for each household (limit up to three), members pay another $20. At Target (NYSE:TGT), one 16 oz. bottle will cost you $7.99. However, you can get two 20 oz. bottles of Cetaphil moisturizer for $15.99 at BJ's (NYSE:BJ) - perhaps indicating that buying in bulk when you can is the way to go at buyers clubs.
That brings us to the king of bulk - Costco (Nasdaq:COST), the largest of its kind in the United States. Joining Costco will cost you $50 per year, plus the cost of having to build a bomb shelter or storage shed in your backyard to house the high volume of goods you'll be bringing home with you.
But there are still many deals to be had, particularly if you look at the special offers. An Ezip-Eco Ride electric bike is $999 straight from the source, but it's just $829 at Costco. Or, for the bulk and emergency-minded, buy a one-year supply of Shelf Reliance THRIVE dehydrated and freeze-dried food (yes, you read correctly) for $999.99 at Costco, or buy the same 84 cans of food straight from Shelf Reliance for $1,075. (Buyers clubs aren't the only place that you can save; learn more in 6 Ways To Save Online.)
The Bottom Line
The comparisons listed here are just a small sampling, but they remind us that just because you are part of a discount club, doesn't mean everything will be discounted. You will still have to do your homework to decide which items to buy where.
Choosing to join a buyers club may save you a few dollars, but there are a few other considerations you should take into account before rushing out to the nearest club. For one, you could sacrifice wide selection for lower cost. Finally, make sure you read the fine print. Joining a club sounds informal, but you're still entering a contract when you become a member. Review any cancellation fees or other hidden costs in your contract before you put any money down.
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