On being … in bulk

By Ingrid Sapona

We’ve all heard the adage: cheaper by the dozen. Before sitting down to write today’s column, I decided to look up where it comes from, figuring it’s been around for a looooong time. Apparently, it’s not that old – it comes from the name of a novel published in 1948. In contrast, the idea of 13 making up a baker’s dozen goes back to the Middle Ages when baker’s started including an extra loaf so they wouldn’t be charged with shortchanging buyers by making loaves that weighed less than legally required.* (I thought cheaper by the dozen might have a pedigree like the baker’s dozen, but it doesn’t!)

Cheaper by the dozen came up recently when I was shopping for corn at my local farmer’s market. A friend was coming for a barbeque and, though I thought it might be too early for local corn, it was worth a look. I was delighted when I found two farmers selling what they described as the season’s first.

They were still setting up when I got there, so there was no indication of the price. I went back when they were fully set up. When I got to the table, I heard a gentleman ask the price of the corn. While I expected a price difference depending on how many you bought, I was very surprised when the farmer said $5 for 6 or $7 for 12. From the look on the face of the man who asked, I think he was surprised too!

While I didn’t mind having a couple ears left over for another night, there were only two of us for dinner, so there was no way I could use a dozen. But, $5 for 6 seemed really unfair. When the gentleman who asked the price also hesitated, I asked him if he wanted to split a dozen. Though he was surprised at my suggestion – he quickly agreed. As I handed him $3.50, a farmer within earshot said, “That’s the way to do it!” and another joked, “See how the market brings people together!”

On the way home, though I was pleased at my quick deal with the stranger, I was still irritated at the price difference. The “cheaper by the dozen” phenomenon – and variations of it – come up a lot. I’ve often pondered the rationale – and I have to say, in most circumstances I don’t get it.

I can understand it if the vendor needs to move a big quantity and so they set a low bulk price encourages people to take more. But with the corn that morning, I don’t think that rationale applied. Since it was so early in the season, he didn’t have that many bushels. I doubt he’d have had trouble selling what he brought to the popular market. 

Sometimes I figure they charge more for a smaller amount because there’s added costs involved in providing an unorthodox size. For example, I understand paying more per pound for a wedge of watermelon than for a whole one. In that case, the seller spends time cutting, wrapping, and weighing the cut piece, not to mention they need to be more careful the way they display or store cut pieces because they’re more delicate.

Other times I suspect the discount offered for a large quantity is related to the marginal cost. For example, when a fast food place only charges 30¢ more for an extra large coffee instead of a medium – clearly the incremental cost of the added volume of coffee is low. In other words, the sunk costs are the same on all sizes: the cost of a cup, a lid, and labour to make a cup, etc. So the additional 30¢ only has to cover the cost of a bit of extra coffee, cream, milk, sweetener, and profit.

But there are lots of situations where a healthy price difference just seems discriminatory. The most egregious example is the so-called single supplement that’s often charged to singles joining a tour group. I get that a couple staying in a hotel might spend more on incidentals, and the marginal cost of having a second person in the room is minimal, but why should a solo traveller have to pay more to be in a room alone?

I know that for most folks, the favourable price available when buying in bulk is seen as a bonus. But for those who don’t need the added quantity (for example, because they live alone or don’t have a ton of storage space), such bonuses feel like a penalty. In the scheme of life’s irritants, this might not rank high for some, but it does irk some of us who fly solo…

I don’t know, maybe the solution is to always shop with a friend – someone willing to split the occasional dozen or multi-pack. Actually, maybe I should be looking for a Silicon Valley whiz kid to work with me on an app to bring the sharing economy to those interested in bulk buying!

© 2016 Ingrid Sapona