Buying in Bulk
Wholesale stores have become a popular destination for consumers to buy products in bulk. Many buy in bulk because there is a perception that it is cheaper to buy in bulk. While this may be true in general, the only one way to verify the assumption is to compare price per unit. To compare prices of items sold in bulk versus the same item sold individually, the cost of the bulk item must be priced per unit.
Sometimes it is easy to determine the unit. For example, say that you are comparing the cost of buying ten individual 20 ounce sodas versus buying a single pack which contains ten 20 ounce sodas. Because all the sodas are 20 ounces, we can simply use an individual soda as a unit. Say for example the individual sodas costs $2.00 each, and the pack of ten sodas cost $16.00. Dividing $16.00 by ten (the number of sodas) gives a price per unit of $1.60. In this case buying in bulk is the better option if you planned on buying a lot of soda.
A case where the choice of unit is not so obvious is when comparing items of different sizes. Now consider the case where we want to compare buying the same ten pack of 20 ounce sodas for $16.00 versus buying a two-liter of soda for $3.00. In this case we must compare the sodas using a new unit. This can be accomplished by comparing price per ounce. There is a total of 200 ounces of soda in the ten pack. The price per ounce is given by , or 8 cents per ounce. Using the fact that there is approximately 34 ounces per liter, the two-liter of soda contains 68 ounces. The price per ounce is given by , or 4.4 cents per ounce. In this case it would be cheaper to buy multiple two-liters if you planned on buying a lot of soda.