Buying in Bulk: An Investment Anyone Can Afford

According to Cuban, one of the best investments you can make is buying in bulk at a discount.

“The money you save by [buying] in bulk will provide a better return on investment than any investment vehicle on the planet,’ Cuban wrote to a representative of NPR. In an interview with Vanity Fair, he expounded, “It’s so hard to make a return on regular investments, that you’re better off,…buying two years’ worth of toothpaste when it’s on 50 percent discount.” It is, of course, a strategy that extends beyond toothpaste. “Any of your reusables, consumables that you have to have, when they’re on a huge sale…buy them,…that’s a real savings that you get to put in your pocket.”

Savings Possibilities and Investment Returns of Buying in Bulk

Like any investment, buying in bulk at a discount involves both costs and returns. The larger the discount, the better the rate of return.

Suppose that year’s supply of toothpaste typically costs $50. Purchasing that amount of toothpaste in bulk at a 20% discount costs $40 now but saves $10 over the year, yielding a 25% return.

A Few Costs of Bulk Buying

Many investments come with fees and other costs that can reduce your rate of return. Bulk buying is no exception.

Warehouse Club Memberships

Shopping at a warehouse club may require purchasing a membership. If the membership is rarely used, the cost may be so large relative to the savings that shopping at the warehouse club becomes unprofitable. (See Is a Warehouse Club Membership Worth the Cost for a Small Family or Tight Budget?)

Storage Costs

The need for storage creates another cost. For those renting their homes, every square foot comes at a cost. Even if the choice of home is unaffected, the need for storage incurs a cost, as the space used for storage could have been used for something else.

For someone like Cuban, who lives in a sprawling mansion in Dallas, the burden of storage may be negligible, but for someone living in a studio apartment in New York City, it may be prohibitive.

The Risks of Bulk Buying

Most investments involve some risk, and buying in bulk is no exception. The primary risk of buying in bulk is that changes in preferences or circumstances, or mere overbuying, may result in unused goods. For perishable goods such as food, this can lead to spoilage and waste. (See How To Maximize Bulk Buying Benefits and Avoid Waste: 9 Tips.)

If you’re on a tight budget, tying up too much of your income in bulk purchases can leave you short on funds for other needs. This could mean going without or having to use a credit card and paying interest that might offset your bulk purchase savings,

The TDS Takeaway

Most people will never have access to the kinds of investment opportunities available to someone like Mark Cuban. However, according to Cuban, everyone has access to one of the best investment opportunities available to anyone. Buying in bulk at a discount doesn’t require a business degree, the ability to read financial statements or even a bank account, and the rate of return it provides can exceed those achieved by professional investors.

• Foods Worth Buying in Bulk To Save Money + Storage Tips
• A Grocery Stockpiling Guide: How and When To Save
• The Benefits of a Household Stockpile
• How a Full Pantry Saves You Money

Reviewed January 2025

About the Author

Daniel Wilmoth is a professional economist living in Maryland. He holds a doctorate in economics from Cornell University.