How does buying in bulk often cheapen the final price?
In: 3
The effect is called Economy of Scale and there are benefits all along the supply chain.
First, larger production runs make specialized tools and automation more cost effective. If you pay $100 for something that saves you $1 per item then you need to sell at least 100 items to merely break even.
Second, shipping one big package is easier than shipping 100 small packages even if the weight is the same. Up to a point it’s faster to put all 100 items into a single cardboard box and carry them all at once rather than pick up and move each individually wrapped package.
There’s also a minor benefit of organization. Having less buyers means there’s less paperwork to keep track of.
Now scale this up to every level of production from harvesting the raw materials to your purchase being boxed and shipped to your door and honestly we’re doing businesses a favor when we order in bulk.
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