Amazon Grocery: When Is It More Cost-Effective Than the Local Supermarket?

Recently, I made an offhand mention that I’m a user of Amazon Grocery and this intrigued several commenters, so I thought I’d walk through the shopping process that leads me to using Amazon Grocery for some items.

What’s Amazon Grocery?
For those unaware, Amazon Grocery is a section of Amazon.com where one can buy most dry grocery goods and have them shipped directly to your home. This ranges from things like baking mixes to things like diapers and baby formula. Rather than transporting them yourself, Amazon ships the items right to your front door.

As a rule of thumb, the prices at Amazon Grocery are usually a bit higher than the prices in the grocery store, but using it effectively offers several advantages that cause it to be much cheaper for us on many items.

First Thing: Know the Prices
Before you even consider shopping at Amazon Grocery, know how much you’re spending on items at the grocery store. Take out your last few grocery receipts – including both food items and household stuff like laundry detergent, dishwashing detergent, etc. – and go through and mark everything that’s dry on that list. This gives you a baseline: you know exactly how much you’re paying for the item at your local store.

Once you have that in hand, fire up Amazon Grocery and start comparing prices. Almost always, the Amazon price will be somewhat higher than the price on your receipt – don’t sweat it quite yet.

How I Save Money Using Amazon Grocery
Of course, that baseline price for those items is just a starting point. Amazon offers a ton of ways for me to trim down that price and often get it to a level that’s lower than what the grocery store is offering. Here are the tactics I use.

First, I signed up for an Amazon.com Visa for my purchases there. You already need a credit card for your purchases there anyway and the bonus program is stellar if you use it exclusively for Amazon purchases (I use a Citi Driver’s Edge card for most of my purchases). When you sign up for that card when you’re processing an order there, you immediately get $30 off of your order. So, even on a one-time use situation, you can get $30 worth of free groceries shipped to your house.

Second, I use that card for all purchases from Amazon. The card gives you 3% back in Amazon credit for all purchases done with the card on Amazon.com. In other words, when you rack up $833 in purchases on the card, you’ll get a certificate in the mail with a $25 off coupon code on it.

Third, I take advantage of “Subscribe and Save”. Let’s say you run through dishwashing detergent and laundry soap and diapers like clockwork. I know we do – I can practically set the clock by how often we need to refill stuff. If you sign up at Amazon for their “subscribe and save” program on these products, they let you schedule automatic purchases and shipments of these items to your home – and shave another 15%-20% off of the purchase price.

Fourth, I keep an eye out for Amazon Grocery coupons. Once every few months or so, they’ll offer a coupon giving $10 off any Amazon Grocery purchase of $49 or more, which when compounded with the other stuff can really trim your costs.

An Example
Let’s say, hypothetically, that I only wanted to use Amazon Grocery to buy diapers. I log into Amazon and set up a plan to ship me a box of 126 Stage 4 Huggies every month for a year. The default price is high for that box ($34.99 for a box of 126), but not outrageous.

First, I sign up for the “subscribe and save” option. That takes the price down from $34.99 for the box to $27.99 a box. Then, when I check out, I sign up for that Amazon card – giving me the first box for free and $2.01 off the second box. This means that my cost for a year’s worth of these diapers shipped to my door is now $305.88 – a cost of $25.49 on average for each box, which is at or below what you’d pay at the store for the same box. Furthermore, I use the Amazon card for all of the purchases, getting myself about 40% of the way to a $25 gift certificate there. Even better, these diapers just magically arrive on my doorstep without having to worry about it.

Amazon Grocery Doesn’t Always Work, Though
There are a lot of items where “subscribe and save” isn’t available or doesn’t make sense for you, and there are some items where the local store simply offers significantly better prices. It really pays to do the footwork and look beyond the initial price that you see – look at all of the savings available to you and see what is really your best deal.

I don’t use Amazon Grocery for all of the stuff that I could potentially get, but I do use it quite often – and if the price on Amazon ends up being virtually the same as the store cost, I use Amazon because it’s more cost-effective for me to have an item delivered to my front stoop than to grab it at the store, put it in the car, haul it home, and bring it inside. The scheduling is particularly convenient, too, if you can get the price point to the right level – the convenience of just having dishwashing detergent or laundry soap delivered to your door right on time, like clockwork, is quite helpful.

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  1. Battgirl says:

    Another way you save money buying groceries online is that there is no impulse buying as you are tempted to do in a grocery store. I know it helps me.

  2. Greg says:

    “ship me a box of 126 Stage 4 Huggies every month for a year”

    I can see this for a few items, such as soap and stuff like that , but doesn’t your child grow out of size four diapers in less than a year?

  3. Andy says:

    Sounds interesting. In my case, I don’t purchase that much (no family, just a girlfriend), so it probably isn’t worth it.

  4. Jessica says:

    We use Amazon Grocery for our popular dry goods (cereal, pasta/rice side dishes, powdered drink mix). I usually wait for the special ‘spend $39, get $15 off’ which makes it a much better deal than hunting around the local grocery/warehouse/discount stores. Without the sale prices, it’s not quite as good a deal, but sometimes convenience is worth a few extra bucks!

  5. Trent says:

    “I can see this for a few items, such as soap and stuff like that , but doesn’t your child grow out of size four diapers in less than a year?”

    Not really. Most of the larger diaper sizes have a huge weight range. My son wore 4s for almost a whole year and would probably still be wearing them if we hadn’t been gifted a lot of diapers by a friend.

  6. Jeff says:

    @Greg

    We use Amazon grocery for some of these very items. There may be an option to automatically increase the size over time, but my wife just logs in once monthly to modify the size as required.

  7. I wasn’t aware of this. I usually view online shopping as a waste of money b/c of shipping costs, but this sounds interesting. Thanks.

  8. cv says:

    I think this sounds like a great idea, but I’m a little surprised at the way you casually recommend signing up for an additional credit card, and even more surprised that you suggest it’s worth it as a one-time-use card. It’s a change from many of your posts which advocate choosing a credit card carefully and limiting the number that you have. Your advice is usually targeted to people just getting control of their finances, and this just doesn’t fit in with that.

    I also think it’s a bad idea to decide to get a new card based on the bonus you get for signing up. Sure, $30 is great, but spread out over the whole time you plan to use the card (probably years), it’s not much, and one late fee or a couple months’ interest on an unpaid balance will wipe that out pretty quickly. Even if you only use the card once, you should think about how it might affect your credit score. A better rate on a car loan or mortgage is worth a lot more than $30.

  9. Trent says:

    This article is pretty clearly under the assumption that you’re going to use Amazon Grocery for a significant portion of your grocery purchases – and if you’re doing that, you’re using plastic, as I said in the article above. If that’s the case, the card is completely worth getting – it falls completely within the ideas I suggest (getting a card with good bonus points and seeking out one that gets you at least 2% back). I advocate cancelling unused ones (besides your oldest card) and not signing up for cards you won’t use regularly, but this doesn’t fall under that category.

  10. MES says:

    I’m a little hesitant to buy food items, at least anything with an expiration date, from Amazon anymore. I ordered some snack bars for my son because I could not find the flavor anywhere locally. The first problem I encountered was that they were suddenly out of stock as soon as I placed my order, so I waited about 6 weeks. It wasn’t a necessary item, so I was willing to wait. Secondly, I had to buy six boxes (30 bars total) and the expiration date on all of the boxes was only a month away. Just something to be aware of, especially since most food items are purchased in bulk.

  11. Frugal Dad says:

    Sounds like you have made it work for things like diapers. Fortunately my son has just reached the potty-trained stage, so we’ve managed to eliminate diapers from the monthly budget! He does still wear some training pants at night, so I may consider grabbing a box or two using your method.

  12. Eric C says:

    Sometimes Amazon will also have clearance deals – watch your email! For example, at the end of March, they had a coupon code for $10 off a $25 order which could be combined with clearance.

    The other thing you can do is if you don’t plan on ordering in large bulk amounts – sign up for a trial of Amazon Prime – this will give you free 2-day shipping. Depending on when you sign up, they may give you from one month to three months worth of free trial. You have to remember to cancel it before the trial period ends, but I had a two month trial and used it for many things, including CDs and computer software. As someone who lives alone, ordering large amounts of things to stockpile isn’t as easy.

    Google “Amazon Prime” to find out more about their service.

  13. Matt says:

    I know this isn’t a ‘green’ website per say, but doesn’t it strike anyone else as hugely UNgreen to have groceries flown or shipped to you? You know, as opposed to going to a local grocer (not a big-box store like your ‘local’ super target) to get fresh products which you can select in person.

  14. Trent says:

    Matt: Amazon Grocery doesn’t ship fresh produce – it only ships non-perishables. For those, they’re also being shipped in from a large factory – all you’re doing with Amazon Grocery is choosing a different shipping path, so it’s a wash in terms of green-ness.

  15. Carmen says:

    Quoting Matt: I know this isn’t a ‘green’ website per say, but doesn’t it strike anyone else as hugely UNgreen to have groceries flown or shipped to you? You know, as opposed to going to a local grocer (not a big-box store like your ‘local’ super target) to get fresh products which you can select in person.

    This has been discussed a lot on various “green” websites and generally the feeling is that everything that is manufactured is shipped to the “local” store, therefore having it shipped to you directly via UPS or USPS actually keeps YOU from driving your car to the store, thereby reducing carbon emissions.

    The UPS guy drives down our street every single day (usually stopping on our block, even), so stopping in front of my house to drop off a box of Seventh Generation toilet paper (which is what I order from Amazon grocery via “Subscribe and Save”) doesn’t use any more fuel than driving right on by, and it saves me a trip to the store. In my book, that’s pretty green.

  16. SJean says:

    Interesting… I don’t have a family, so probably not worth it for me either, but something to keep in mind.

    I’m tempted to order $30 worth of toilet paper and paper towels, get the card, then cancel it.

    (I’m not going to need my credit score for anything any time soon, and it is already quite good.)

  17. I’ve used Amazon to comparison shop bulk items. I’ll go to Costco and find something I might want to buy, like 8 big boxes of cereal.

    Then I check Amazon through the trusty iPhone and make my decision that way. Its great because I can walk out of Costco having made a purchase from Amazon.com. Now if I can only get Amazon to offer free samples…

  18. Michelle says:

    While I don’t buy groceries online as a rule, I have had good experiences buying specialty and high-end items online. Spices and baking ingredients are most common for me. Where we live isn’t diverse, and it’s hard to find ethnic items.

  19. Graham says:

    Buying groceries offline is more to my liking. The food is more fresh.

  20. Jon says:

    “I advocate cancelling unused ones (besides your oldest card) and not signing up for cards you won’t use regularly, but this doesn’t fall under that category.”

    But you listed one-time use as one of the possible perks of the card…

    “So, even on a one-time use situation, you can get $30 worth of free groceries shipped to your house.”

    cv (comment #8) was just pointing out the conflict of statements. What is the justification for even mentioning a one time use situation? You mention the $30 off instantly for the first purchase several times. That’s the same type of marketing used by almost all in store credit cards.

  21. Johanna says:

    One difference between the Amazon card and a store card is that the store card usually gives you a percent off on the first purchase, not a fixed dollar amount. So that is a temptation to buy extra stuff that you don’t need, so that you can “save” more. Is that a big enough difference to justify the Amazon card but not the store card? I don’t know.

  22. Rob says:

    Trent, You stated that you go thru a lot of laundry detergent. What happend to make your own? You wrote a large article on it. Dont you practice what you preach?

  23. Ok, I’m going to have to check out the diaper deal. I have bought diapers off Amazon in the past when the have the $30 off $90 or something similar. It would be nice if the “subscribe and save” program would send you the item whenever it is on sale that month.

  24. Rick says:

    Another point to take into consideration that *might* give Amazon Grocery the edge is taxes. In my state, most of these non-food items (diapers, soap, etc.) are taxed when you buy them at the grocery store, but tax-free when you buy them from Amazon. There’s a difference of 7.4% right there, and for me that’s what sometimes gives Amazon the edge over buying at the local supermarket.

    And to the commenter who suggested that having groceries shipped to you is not “green”, think about it. What uses more gas: 100 people driving their cars to the grocery store, or a single delivery truck making coordinated deliveries to 100 houses? I’d say in most cases it’s the latter.

  25. !wanda says:

    @Rob: Either in that post or another one, Trent said that for him, the time commitment meant that making laundry detergent himself was about equal to the expense of buying it. I guess this would have been especially true when he was still working and had no time for anything.

  26. Jon says:

    @Rick

    “Another point to take into consideration that *might* give Amazon Grocery the edge is taxes. In my state, most of these non-food items (diapers, soap, etc.) are taxed when you buy them at the grocery store, but tax-free when you buy them from Amazon. There’s a difference of 7.4% right there, and for me that’s what sometimes gives Amazon the edge over buying at the local supermarket.”

    Eh, all depends on how honest you are come about April 15 of each year. In some states you are still supposed to declare and pay taxes for whatever you bought online but never paid sales tax for.

  27. I use Amazon Grocery for specialty items I can’t get locally or which are very expensive locally.

    Benecol Smart Chews are only available online. Amazon’s Subcribe and Save service brings the price down lower than the other online sources.

    There’s a particular brand of finely ground oatbran I like to use for baking. It’s really expensive at the supermaket and isn’t carried by Costco. So I get it at Amazon.

  28. Becky@FamilyandFinances says:

    I just wanted to say that I love it when you comment on your posts in response to people, Trent. You seem to be doing it a little bit more now that you’re fulltime, and I’m glad!!!

    I did price Amazon grocery once before on a few items, but I’ll have to check them out again. The 3% cash back would be a nice bonus. Right now I only get 3% on gas and convenience stores.

  29. Trent says:

    “Trent, You stated that you go thru a lot of laundry detergent. What happend to make your own? You wrote a large article on it. Dont you practice what you preach?”

    Time cost, as I discussed here. As stretched as I was for time, the time cost was too high to make my own for most of a year.

  30. Lisa says:

    I don’t use Amazon Grocery as much as I used to. Items that I purchased there regularly went up in price, and I can get them less expensively at the local grocery store. When they were first starting out, they had some phenomenal deals.

    The books are still great deals. I sell books on there as well. That’s easy, and works great.

    Lisa

  31. George says:

    Trent, thats amazing. You have it down to a science. I was about to be very skeptical about buying stuff where the prices are generally higher than the local store. Along those lines, my step brother used to go to the store and buy say a few hundred dollars worth of groceries and after pulling out his million coupons, he would pay 25% of the total bill.

  32. maria says:

    I just tried amazon grocery after reading about it on this site. Who knew? I usually have to plan a run to trader joe’s about 4 times a year because it is far from where I live. With the price of gas going up and up I have been rethinking this road trip. Now I can just order on line. Not everything is available and you really can’t beat trader joe’s prices but the free shipping and delivered to your door is wonderful.

  33. Lisa says:

    I haven’t used Amazon to buy a big amount of groceries. One thing I do though is if I have to buy a book for my book club I will add on something to the order to reach the $25 point so that shipping is free. Ultimately the combined cost of the items is cheaper than if I had to make a special trip to the book store for the book. (And yes I check the availability of the book at the library before I order the book.)

  34. laura says:

    I guess i’m unusual in that i live by myself, yet buy lots of groceries on Amazon. I eat primarily organic food and find a big variety there. I *always* use the card, coupons off and subscribe and save, buy cans and dried goods like cereal, canned tomatoes, olive oil, food bars and coffee. I sure beats driving to the stores, paying higher prices and tax. i do go to my locally owned health food store for things Amazon doesn’t have and produce. I also buy bulk there too, on cases of whole wheat pasta, granola, peanut butter. I pay the bill monthly by automatic bill pay, don’t have interest rates or late payments to worry about. I worry about the rising cost of food and fuel like everyone else here, and think this works well for me. I’m working out a storage system for first in, first eaten. i know it sounds kinda strange for one woman to buy like this, but it seems to work for me.
    laura

  35. Brady says:

    One savings that Trent didn’t mention in his analysis is the price of gas. Unless you have a corner grocer, most people are going to be driving to the grocery store and with the price of gas these days, that can be a significant cost. Of course, one can always try to plan on stopping at the store on the way home to minimize the driving, but that isn’t always possible.

    Also, I’d like to add that I have an Amazon Visa and I use it almost exclusively for all purchases (except the American Express Costco card that I use at Costco and get rebates for my gas purchases). I pay off the card each month, so no problem there. Anyway, having done some research, that Amazon Visa has one of the best ratios for an awards card. It’s 3 points on the dollar for each spent at Amazon and 1 point anywhere else. Earn only 2500 points for a free gift card. Most other point cards I’ve seen require around 5000 points to trade in for an equivalent Amazon gift cert. With all of our bills and grocery purchases, we earn a $25 gift certificate about every 1.3 months. And since Amazon seems to sell just about everything now, we can save them up and get tools or other fun purchases for free (or at least greatly reduced).

  36. We looked into trying out the Amazon Grocery but it turned out it wasn’t as cost effective as we wanted it to be. So far, our neighborhood store is where it’s at. But this is a good reminder to us to keep checking it out and seeing when it may be worth looking into again.

  37. Phil says:

    Know your prices is an absolute. I shop at discount clubs (Sam’s BJ’s). For example, I paid $28 for a 40lb bag of Iams dog food. Amazon is priced $33 for the same product

  38. Rev says:

    I buy my Kashi cereal from them with subscribe and save on my Amazon Visa. It is cheaper than my near by stores that way. Also its awesome having it set on my door step once a month.

  39. The Frugal Father (tm) says:

    Bravo, I have been using it. Good resource and no gas or taxes on non food stuffs. Plus I hate shopping…its wonderful and with the selection it also keeps you home and not eating questionable meals out.

  40. Lisa says:

    I try to use upromise.com to buy stuff like this, since it gives my niece/nephew $$ for college. Amazon doesn’t contribute to it, but drugstore.com does (just go to upromise.com, register, and use that page to get to others0. I just bought 7th generation t.p. – all their products are buy one/get one for 50% off right now!

  41. Andy says:

    For amazon grocery coupons, I always use them to buy some grocery that can be stored for a long period. And I will use http://www.retailmenot.com and http://www.tophotdeal.com to find all amazon grocery coupons.

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