In this video, we’re going to play a game I like to call What is the Better Deal? Let’s look at an example. There’s a 16-ounce bottle of shampoo that costs four dollars, and there’s another bottle of the same brand and shampoo next to it on the store shelf. It’s 35 ounces and costs seven dollars. Pause the video and think about which is the better deal.
There are several ways to approach this. You might see that 35 ounces is more than double 16 ounces, and the price isn’t more than double four dollars, so this is probably the better deal. But just in case it doesn’t jump out at you that way, you could think about something known as unit pricing or unit costs. To do this, we take the price (in this example, four dollars) and divide it by the number of ounces (16 ounces). That gives us 25 cents an ounce.
The other situation, seven dollars divided by 35 ounces, gives us 20 cents per ounce. Here, you can make an apples-to-apples comparison to see which is cheaper per ounce. Our initial intuition was right that the larger bottle is indeed cheaper.
It’s good to verify. Sometimes bulk pricing isn’t cheaper than less-bulk pricing. So, always try to do the math. You could walk around with a calculator, or stores often do the unit pricing for you.
For example, there’s a product that says six rolls of Ultra Comfort Care and the price is eight dollars and 49 cents. They give us the unit pricing, which is five dollars and two cents per square foot. If there was another different size of the same toilet paper, you could compare it on a per square foot basis to figure out which is cheaper. Or, if there are two brands with different sizes, you can compare which is cheaper by looking at the per square foot.