Opportunity Cost vs Bulk Amazon Purchases
If you buy common items in bulk on Amazon you can save yourself a lot of money but watch out and do the math!
There's a YouTube video with Mark Cuban where he explains a few ways you can save and make money. One example he gives is spending money on buying common items in bulk which is very true! At the end of the article is examples of items that you can find on amazon that a great for the bargain hunters out there. While you're down there make sure to leave a comment on what you have found to save money using amazon.
Where is the Opportunity Cost? - It will surprise you
Let's use the toothpaste example as our study. If a single tube of toothpaste costs $1.99 at the store and $8.44 for a pack of six then if you bought six single tubes it would cost $11.94 saving you $3.50 by buying on Amazon. Seems pretty straightforward right? But you actually save less than $3.50!
What the Chart Means
The chart above demonstrates what would happen if you had the $11.94 - the max amount you would pay for all of it and either bought it through amazon and invested the rest into the S&P 500 Index or you bought one by one every other month and invested the rest in the meantime (I assumed a 7% growth a year which is healthy and accounts for fees). The longer a toothpaste tube can last, the dollars saved will decrease until eventually it reverses.
“The dollars saved will decrease until eventually it reverses.”
Putting it all Together
Fortunately for us this will take an unreasonable amount of toothpaste frugality proving that buying in bulk is worth your while! Things to mention are that the S&P 500 might not be your opportunity cost, it might be that you can get a lucrative return on the difference higher than the S&P 500 also or you might have less if the money was kept in a bank, for example. Also what would happen if you took a large advantage of this and spent your last $100 or $1,000 on buying everything in bulk and then some tragedy happened where you needed that money but didn't have it? What if there was a course that was offered that could ridiculously increase your earnings that costed that amount and again you didn't have it?
Yes I am Being a Bit Particular But...
It might sound nit picky but in truth that's exactly what opportunity cost is all about. I hope by putting a silly example like looking into Mark Cuban's claim can help expand the mind of a reader and really look into how buying in bulk can affect a budget. The funny thing about opportunity cost is that sometimes the right answer isn't always the right answer. I will write more on this late but I hope this was interesting as it was fun. Make sure to check out the short list of bulk ideas below and feel free to add your own in the comment section below.
List of Bulk Product Ideas
6 Pack of Colgate Toothpaste https://amzn.to/2UmwO7z
12/24 Pack of Listerine Breath Strips https://amzn.to/2tISb7h
6 16 Ounce Old Spice Body Wash https://amzn.to/2Td8Uyu
24 Mega Rolls of Charmin Ultra Soft Cushiony Toilet Paper https://amzn.to/2Uf197S
16 Bounty Quick-Size Paper Towels, White, Family Rolls https://amzn.to/2EIqTnU
78 Cascade Complete ActionPacs Dishwasher Detergent https://amzn.to/2HdYY0z
750 count Q-tips Cotton Swabs https://amzn.to/2JTFmBK
100 Toothbrushes https://amzn.to/2UmzKRD
Disclosure
As an Amazon Associate I earn from qualifying purchases.