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How are Costco prices so low?

alaskanseminole

alaskanseminole

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Oct 20, 2002
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How on earth do they stay in business or is EVERYTHING else simply marked up?

Banana Republic shorts (at Costco last month) - $16 per pair. Similar shorts on BR's website? $60
Organic Blue Agave - $10.99 (2-pack 64oz). One 44oz bottle at HEB (local grocer) is $10.99.
Extra Virgin Oil Oil - $15.99 (2 Lt bottle). HEB Organic Extra Virgin Olive Oil 25oz $8.57

...and the list goes on.

It can't be because of an annual membership. Heck, even their gas is significantly cheaper than anyone.
 
Sometimes they buy overruns from companies. I got a sweet Bolle snowboarding helmet there heats ago that I use for fat biking in the winter.

it’s a big reason I prefer Costco over sams. Sams doesn’t seem to have the occasional sweet deal on an item not normally stocked.
 
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they buy massive bulk purchases, great for manufactures, and once items are gone they are often gone.

plus, the membership cost generates a good portion of their revenue and probably covers most of their corporate overheads.
 
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It is pretty incredible. Some of the deals I have got there are like 75% less than what the same quantity would cost elsewhere.

The most consistent mind blowing one there is for me is the giant Rotisserie Chickens, about dang near twice the size of what you get at Walmart or Publix, that are $4.99. I always grab two or three and carve up the spare (s) for lunches that week and we feast on the other when we get home. A ton of good chicken/protein for 10-15 bucks.
 
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noleclone2 said:
It is pretty incredible. Some of the deals I have got there are like 75% less than what the same quantity would cost elsewhere.

The most consistent mind blowing one there is for me is the giant Rotisserie Chickens, about dang near twice the size of what you get at Walmart or Publix, that are $4.99. I always grab two or three and carve up the spare (s) for lunches that week and we feast on the other when we get home. A ton of good chicken/protein for 10-15 bucks.
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I believe that the chicken is a loss leader. They do them to get you in the door to buy everything else with a 10% markup.
 
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Whenever I go see my parents, I have to go to costco with my father to "see what's on sale" this week. I swear to God you would think they're giving away things if you have an AARP card on a saturday morning, the crowd in the parking lot builds and builds until they let people in.

As far as their prices, I don't see anything crazy cheap. The meat and seafood is of consistently high quality imo vs alternatives.
 
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The pricing is a cultural thing in the company. If they get a better deal from the manufacturer they will lower the price on the product even if they could sell it at the higher value. Their target margins are lower than other retailers around 11%. The founder Jim Sinegal believed in putting the customer in front of the shareholder and that this approach would increase customer loyalty and in term long term growth and business.
 
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bhawk24bob said:
Whenever I go see my parents, I have to go to costco with my father to "see what's on sale" this week. I swear to God you would think they're giving away things if you have an AARP card on a saturday morning, the crowd in the parking lot builds and builds until they let people in.

As far as their prices, I don't see anything crazy cheap. The meat and seafood is of consistently high quality imo vs alternatives.
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This is why I like Costco. Grocery options where I live generally suck and Costco is very consistent in terms of quality and selection. If only it wasn’t 100 miles away.
 
Mayland said:
This is why I like Costco. Grocery options where I live generally suck and Costco is very consistent in terms of quality and selection. If only it wasn’t 100 miles away.
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I have two Costco's within 3 miles of my house. Both are almost always busy. We've been members now for about 20 years.......I still think it's really good value for a lot of things.
 
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cfbfan23 said:
I have two Costco's within 3 miles of my house. Both are almost always busy. We've been members now for about 20 years.......I still think it's really good value for a lot of things.
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You can’t beat it for wine. Cost +12% or whatever it is, and they buy in quantities that give them the best cost.
 
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mnole03 said:
You can’t beat it for wine. Cost +12% or whatever it is, and they buy in quantities that give them the best cost.
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Agreed.

Contact Solution, mouthwash, dog food, coffee, fruits and vegetables are just a few other areas where they have little-to-no competition in terms of value (quality and price). When it comes to the meat selection, they are not always the cheapest, but the quality is almost always consistent.

The parking lot can be a disaster, so nobody's perfect.
 
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Moral said:
We just love Costco co. We named our dog Costco. On Sundays we hang out at the local parks and let people know about the spirit of Costco and how ot can make their lives whole.
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You should breed Costco. Then you could have awesome names for the offspring like: Costco's Little Sausage III or Kirkland's Mixed Nuts Revenge.
 
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cfbfan23 said:
Agreed.

Contact Solution, mouthwash, dog food, coffee, fruits and vegetables are just a few other areas where they have little-to-no competition in terms of value (quality and price). When it comes to the meat selection, they are not always the cheapest, but the quality is almost always consistent.

The parking lot can be a disaster, so nobody's perfect.
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And here in Iowa, it is the wild west for booze in terms of buying it in grocery stores, gas stations, Target, Costco, wherever. You can get liquor cheap at costco/sam's, and the Kirkland brands are pretty decent.
 
alaskanseminole said:
How on earth do they stay in business or is EVERYTHING else simply marked up?

Banana Republic shorts (at Costco last month) - $16 per pair. Similar shorts on BR's website? $60
Organic Blue Agave - $10.99 (2-pack 64oz). One 44oz bottle at HEB (local grocer) is $10.99.
Extra Virgin Oil Oil - $15.99 (2 Lt bottle). HEB Organic Extra Virgin Olive Oil 25oz $8.57

...and the list goes on.

It can't be because of an annual membership. Heck, even their gas is significantly cheaper than anyone.
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They have supply chain and logistics down to a science.
Packaging, freight, labor per pallet of product sold is a huge advantage.
 
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DogBoyRy said:
They have supply chain and logistics down to a science.
Packaging, freight, labor per pallet of product sold is a huge advantage.
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yup, they are literally selling stuff out of a warehouse, not mention they stock maybe 5% of the items as a regular grocery store or big box store would. One aisle might have only 40 items instead of 500 at Target.
 
OrlandNole said:
It's a no brainer. The Executive Membership gives you 2% cash back on all Costco purchases, and they will refund the difference if you don't hit the cost of the membership. Plus, you get to skip the line at OP's mom's house.
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Yup, then tack on the Costco Visa Rewards and the membership fee comes out free. My wife was joking with her sisters that if I didn't shop at Costco, I'd never buy myself new clothes. Sadly except for Hawkeye gear, it's true. We just helped move our youngest into his college apt last week with Costco packages of toilet paper, paper towels, toothpaste, mouthwash, soap, etc. He should be stocked for awhile.
 
Costco is great, especially this time of year. We've gotten replacement Hawkeye tents for tailgating for our large group and they carry the big comfy chairs for tailgating. And they're the 10x10 tents, not the crappy 9x9 ones sold everywhere else
 
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