This is just one of the stories in our “I’ve Always Wondered” series, in which we address all of your questions about the business world, no matter how big or small. Have you ever wondered if recycling is? It is worth it? Or how to store brands stack against Name brands? Check out more from the series here.

Listener Anne Prianti from Alpharetta, Georgia asked:

Do warehouse clubs (e.g. Costco, Sam’s, BJ’s) cost more than you save? I run a high school kitchen and when my monthly inventory is high (dollar terms) it has a negative impact on my finances. Wouldn’t buying and storing bulk items also have a negative impact on my household finances?

When Sarah Boling raised five children as a single mother, she recalls being unable to buy household goods in bulk because she didn’t have enough cash on hand.

That meant buying a four-pack of toilet paper for a few dollars, for example, compared to a 16-pack, which cost more but would last a lot longer.

“With all of these kids, you know, toilet paper, paper towels – it all goes through pretty quickly,” said Boling, who lives in Inverness, Florida. “So it would have helped if I could have bought large quantities.”

Now that she has a more stable salary and is married, she can shop in bulk at Sam’s Club, purchase household cleaning items and paper products, and long-life groceries such as condiments, in a two-income household at Sam’s Club. She said she saves hundreds every year.

Boling’s previous experience is reflected the “poverty penalty” – a phenomenon where low-income consumers actually pay more than rich people.

Low-income households typically buy smaller packages from cheaper brands. This undermines their efforts to save money as the unit price is loudly higher than that of items sold in bulk a 2016 working paper by Professor Yesim Orhun at the University of Michigan and Mike Palazzolo, a Ph.D. Student at that time.

Their data showed that low-income households, for example, pay 5.5% more per roll when buying toilet paper than if they had done their shopping like high-income households. These households buy in bulk and use sales more often. Not only do these less affluent households lack upfront cash, but they also don’t have the space to store extra items, so they can’t wait for the products to go on sale.

The study also showed they take advantage of volume discounts and sales when they have more liquidity.

“I was definitely aware that I was basically spending more money than I should have spent,” said Boling. “I’ve been pretty poor for most of my life, and I’ve been a single mother for a long time. So basically you have to get what is cheapest. “

Nicole Dow, Senior Writer at The penny hoarder who focuses on savings and budgeting strategies, said warehouse club shoppers can usually see price breakdowns that help them make smarter decisions.

“If you look in the store, you will find that the store actually gives the price per unit,” said Dow. “And you can use that for comparison. Because there are times when you find that the item you normally buy is better to buy as a stand-alone item rather than a bulk item. “

She also noted that while bulk foods tend to have a lower price per unit, you need to make sure you can consume them before the expiration date.

Borrowing from this point, Kara Grant, assistant professor of economics at Missouri Western State University, pointed out that the size of your family has an impact on how beneficial these businesses are in the long run. For example, buying items like fresh produce in bulk may not be the best option for smaller households.

For non-perishable items, Dow suggested sharing the cost with a roommate or friend.

Shopping at warehouse clubs like Costco, Sam’s, and BJ’s also require a membership fee between $ 55 and $ 120 per year depending on which tier you buy. However, Boling pointed out that warehouse club membership is another thing that low-income consumers typically can’t afford to buy in advance.

One tip from Dow is to find someone who has a membership, such as a neighbor, who can pick up an item for you. You could then refund them for this purchase.

“If you only shop once a month, or if you don’t really take advantage of that purchase, these stores may not be good business for you to shop for,” said Dow. “But you can still buy in bulk from your everyday grocery stores.”

Nancy Wong, a professor of consumer science at the University of Wisconsin-Madison, said she stopped shopping at Costco because she felt like she was losing money.

“I remember buying things like guacamole,” she said with a laugh. “I realized I could only dent the crowd. I threw the rest away in the end. ”

There are easily taken for granted lifestyle features that come with being able to shop in stores like this. For example, you need a car and a house with storage space to house these items, Wong said.

Costco is “clearly targeting a specific market segment,” she explained.

The typical Costco shopper is a 39 year old Asian American who earns more than $ 125,000 a year, according to data from the analysis company Numerator, which were made available to insiders. The big box retail chain draws a richer clientele than stores like Walmart – hence theirs luxurious offers.

Orhun of the University of Michigan said retailers could provide low-interest lines of credit or manufacturers could run promotions to cut the costs associated with the inability to purchase in bulk.

“There are ways to save money when you have money,” noted Boling. “And you can’t do that if you don’t have any money.”