How To Start a Warehouse Buy In Bulk Co-Op

Take the Bulk Out of Bulk Buying But Keep the Savings

Buying in Bulk
Getty / Joos Mind

Shopping at warehouse stores like Costco and Sam's Club can offer significant savings, depending on your household needs, but there is also the downside of having to purchase bulk quantities. It's easy to get caught up in that consumer mindset that the warehouse prices are so good that you forget about the big picture. But is buying in bulk really a great saving?

Most of the time the answer is yes, but then you have to ask yourself if you have the room to store your purchases and if you will actually use what you have purchased before it goes bad or you just get plain sick of eating it.

If you have dealt with either situation, here is a way around it.

Bulk-Buying Co-Operatives Explained

A bulk-buying co-operative is a group of people who pay for and split up the bulk portions of specific products. For example, if space is a problem than storing 72 rolls of paper towels may not be manageable, but if you and five friends or relatives split the order then you are looking at storing only 12 rolls, yet you still get the savings of buying in bulk.

How to Get Started

A bulk-buying co-op can either be a simple project or one that ends up being a lot of work with few rewards, depending on how you start it up. Having experienced both scenarios, I've put together the  basic steps to follow to make it a win-win situation for yourself and all involved.

Think Small

When you first begin a co-op it is very tempting to get as many people interested in it as possible in order to strengthen your buying power.

The idea behind it being that the more you can buy in bulk, the cheaper the prices are per unit and although this is true if you have too many people involved it can quickly become a maintenance nightmare.

Imagine for a moment that you are the only person that is doing the shopping. If you have a lot of people to buy for you will be pushing three, four or even more carts around the stores.

Next, you have to load all of it your car then either drop off each individuals order or unload it and store it at your home.

Next, you have to be available for each person to show up to get their items and hope that they have the money to pay for it.

Also, the bigger the group, the less accountability there is for each person. This could result in a lot of no-shows and you ending up footing the bill, storing and using/or consuming a lot of the same products.

My suggestion is to start off with three members, then gradually build to five, making it a total of six including yourself. This will still allow for a strong buying power which will result in saving money and space.

Limit the Products Purchased

Again, with the idea of thinking small, when you first begin the co-op, limit the list of items that you plan on purchasing. Most warehouse stores carry the following major categories:

  1. Baby
  2. Beverages
  3. Breads
  4. Canned Foods/Soups
  5. Condiments
  6. Dairy
  7. Frozen Foods
  8. Laundry/Cleaning
  9. Meat
  10. Pantry
  11. Pets
  12. Plastics / Paper Products
  13. Produce
  14. Refrigerated Meats/Cold Cuts
  15. Snacks
  16. Toiletries/Health

If you plan to go shopping weekly, you can focus on four major categories each week. If you plan to shop twice a month, focus on eight categories.

This will help you control how much time that you spend shopping and distributing the goods and also allow for you to plan for how to store perishables until they get picked up by the members.

Create a Price Book

Your next step will be to create a price book and although this may sound like a daunting task, it isn't as hard as you might think. You can either do this in an actual notebook, on note cards or with a shopping app. on your phone.

Basically, a price book is an itemized list of products that you or a co-op member purchases on a regular basis. You will want to list the items by name, price, size, unit price, actual price, tax and include an area for notations.

I found the easiest and the most time-friendly way to go about this was by making the notations while I shopped, then figuring the tax per item once I got home.

Example of a Price Book

ItemPriceSizeUnit PriceActual PriceTaxNotes
BABY      
Diapers:      
Huggies Snug & Dry Diapers, Size 2$38.99228ct$.171per diaper   
Kirkland Supreme Diapers, Size 1,2$31.99216ct$.148 per diaper   
       
Formula:      
Similac Advance Early Shield Formula$29.9934oz$.941 oz   
       
Wipes:      
Huggies Natural Care Plus Wipes$29.991120ct$.022 per wipe   
       
BEVERAGES:      
Folgers Classic Roast Ground Coffee$10.9948oz$3.763 lb   

Note: Some people add a few cents to the cost per item amount in order to cover their gas, time, and cancellations or no-pays.

Once you've completed the basic list you will want to distribute it to the co-op members. This will help them when it comes time to place orders.

Plan Your Shopping Trip

When it is time to go shopping, contact the co-op members and ask them which items and how much of each they want you to purchase based on the categories that you will be shopping for during that trip. You can do this through email, on the phone, or whatever is easiest.

Make a master shopping list so that you know what and how much to buy for all members. Prices fluctuate, so as you shop, verify the actual prices that you pay. Distribution

When you get home, distribute each member's purchases into bags or boxes. Talley up what they owe, including tax, and call, text or email and let them know their items are ready for pickup. Include their list with any adjusted prices noted inside their box.

What About No-Shows?

I have been running a small bulk co-op for five years and (knock on wood) I have never experienced a member failing to pick up their order. However, if it does happen I know that there is little I can do about it. People have unexpected things happen. That's life. If it is an item I know I will not use, I'll save it until another member orders it or send out a shout-out to see if anyone wants it.

Believe Me, It Gets Easier

The best thing about running a bulk-buying co-op is the savings and that managing it becomes easier with each shopping trip. I am so used to doing it now that I don't even think about it. It's just a normal shopping trip with great savings on products that I use, but in the sizes that I want.