What Is a Wholesale Club?

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A wholesale club is a retailer that requires customers to become members, and they in turn can purchase groceries, gas, auto services and even health screenings. Products sold at wholesale clubs are available in larger quantities than they are at grocery stores, with a lower cost per item. Wholesale clubs do not accept coupons, and sell only specific brands rather than a wide variety.

Bulk deals are the focus of warehouse clubs, but they do have individual items as well. Prices can be 10 percent to 40 percent cheaper, although membership costs a fee annually. Stores like Costco and Sam's Club are ideal for large events such as parties, especially when shoppers have large storage space at their disposal.

Big-box stores have started to sell a wider array of items, including jewelry, electronics and even car tires. Collectively, these clubs have more than 120 million members, with families potentially saving as much as $2,000 annually through club shopping.

Prices do vary between wholesale stores, with Costco selling some items like milk for less than Sam's Club. Sam's Club generally accepts more payment methods than Costco, has more membership options and provides better delivery and installation, according to Time magazine. Wholesale membership is not always a better option; the savings vary by family and their respective needs and lifestyles.