Costco’s electronics are typically mid-line products, not top of the line. Definitely not top of the line on HDTVs, which can be multiple times the price of the entry level line and offered only at select stores, e.g. Best Buy’s Magnolia. Makes sense since entry level models are priced to build brand loyalty and top of the line models are built and priced at a (near) no limit ceiling with premium components.
About the pricing of soda. I posted my question as an example of an item that’s not always cheapest at Costco, as well a wondering if the pricing model was the same all over. As I’ve stated above, Costco’s target buyer is huge volume visitors like restaurant, bars and small stores. Who rather have a consistent price on this commodity item than have to chase sales.
I don’t know if it’s a consequence of Costco (and later Sam’s Club) opening, but prior to that some stores didn’t have limit (or had a higher limit) on how many sale items your could buy, for example soda. Customers would have carts full of soda and would openly discuss how they ran a restaurant or store and there was no reseller tax break. After Costco opened in 1988, the stores began to have limits, especially soda, which I was told was imposed by the distributors. IIRC, Coke and Pepsi were the first have limits while local brands didn’t.
Few people here talk about the negatives. For one Costco has about 4,000 Skus (stock keeping units) in a store. A large supermarket has 40,000 plus and a Walmart Supercenter averages 140,000.
It’s pretty easy to calculate the value. If you average a 5% savings then divide the cost of the membership by the savings. $50/.05 = $1,000. So you have to spend $1000 to break even on the cost. I spend more than that on gas so I’m ahead of the game before I enter the store.
You still have to be a savvy shopper. Not everything is cheaper at these types of warehouses.
Customers feel loyalty or a sense of investment at Costco (and maybe other membership stores).
When I worked at a big California grocer store, one constant problem was theft. Alcohol was popular, but people would even run a cart out the door to their car and hope LP was around, because not even assistant managers were allowed to to anything except try to get a license plate. Guess how often the store got redress from that.
I have never seen this at Costco.
In the past year, in NorCal, there have been smash and grabs from the jewelry display which are still located near the front of the store. There are now security guards standing nearby to deter this. It makes me a little sad hen I see them.
Getting a bit off topic, but what I pay for Amazon Prime is becoming less of a bargain as tax (4.712% in Oahu, Hawaii, .05% more than other islands because of the lighr rail tax), is being charged on more and more items. I find a lot of times, I get the same item for same price or sometimes less at Walmart.
I usually still come out ahead with Amazon though, because I have a Amazon Prime Store Card which gives me 5% back in credit.
No it’s not easy to calculate the value. 1. The simply mathematics you use place no value on your time to travel to this additional store (because of the small SKU count you are still going to go to Walmart/Target, supermarkets, etc). 2. When you go into Costco you are going to make spur of the moment additional more or less frivolous purchases.
And yet I made one stop on the way home at a warehouse club today to purchase the items on my list along with a tank of gas.
It’s as if I was somehow able to plan ahead and shop wisely using math as part of a process of comparison shopping. And while I was there I took pictures of item prices so I could continue the process.
So we will just have to disagree. I think it’s easy to calculate value.
Yes, if you joined Costco specifically to purchase a large item you would save money. I just got a $50 rebate from a club sponsored offer. That has nothing to do with my post which was to show the average minimum purchases needed over time to break even at a savings of 5%. It gives someone an idea of how much they would have to spend on staple items to make it worth the cost of membership.
As I stated earlier, you have to comparison shop to ensure you’re getting a discount. I find some items cheaper at other stores. I keep tabs on items I purchase regularly.
To May to, to MA to. Different strokes for different folks.
I don’t have to spend X amount of money at X percentage to cover my membership fees. It could be 5 cents on the dollar, it could be $50 on a $500 TV bought on impulse, it could $10 on six five $40 purchases, it could be $0.10 per gallon of the ever changing gas price or any of a number of different combinations. Too many variables to give a set amount of money needed to break even or be ahead.
Bottom line is some (most) people who choose to get a Costco membership come out ahead over shopping, buying gas elsewhere.
Comparison shopping is a smart way to save money, if you stick to only what’s on your list, but most people make impulse buys. Read the thread about how stores manipulate you to spend more time in the store and make impulse purchases. And time (unless you value your time as zero) and gas do factor in your savings.
Say I can save $1.00 on five cases of soda at another store that’s 5 minutes away from where I’m currently shopping. Woo hoo! $5 saved! Hmm…but wait, I know that chips and salsa, which I really don’t need to or should by are $0.50 each less there. Well…I’m already there so I’ll buy them, spending an additional $5 to save $1 on something I wouldn’t buy in the store I’m in. Oh…and while the cost of gas to get there is a few pennies, it’s 5 minutes to drive there, 5 minutes to check out and an additional 5 minutes to drive home. Even though I value my free time at zero dollars, that’s 15 minutes I could spend on something more productive or relaxing. Result, net loss.
Maybe it’s different where you live. In my area the warehouse store on my way home is routinely the cheapest gas in the area. I keep a “to do” list with items to purchase from different stores based on comparison shopping. As they fit into my travel schedule and gas is cheap I stop for a fill-up and make the purchases. It’s not rocket science. I spend thousands a year on gas alone so it generates money on the rebate side in addition to the savings on the price of fuel.
I don’t understand the need to argue over basic shopping skills. All I did was post a math formula to show the breakeven point of a warehouse membership. If you don’t buy enough of the products they sell then it doesn’t make sense. If you do it makes sense. A club membership does not guarantee the cheapest prices but they focus on bulk discounts and various one-time purchases where the store can reduce the price.
I find myself much less likely to make impulse purchases at Costco if only because stuff often starts at $10-$15 and I’m not as tempted to drop $15 on a case of coffee biscuits as I would be spending $5 on a bag. About the only thing I ever walk out with “unintended” is kid’s clothes and, well, my wife has never returned from Old Navy with a single $12 fleece hoodie so I’m probably still coming out way ahead.
Basically, the “rules” for shopping at Costco are the same as anywhere else – just don’t be an idiot or drive 45min out of your way to save 10¢ on gas and other obvious stuff.
Apropos of nothing, Costco will let you look around and browse inventory if you’re interested in becoming a member. I went in there to price some televisions, and took pictures of the tags. I needed to buy two matching screens to use as computer monitors. Target had the exact same model in stock for about $100 more. Target had no problem matching the Costco price. On top of that, I got a 10% military discount and another 5% discount for using my Target Red Card. Thanks, Target!
More praise: I’ve yet to find anything at Costco that was made cheaply. They don’t sell junk. For example, they could sell perfectly good gasoline for a few cents less, but they don’t; their gasoline has the injector-cleaning detergents in it to meet the Top Tier standard.
Another thing going for them: the employees like working there. I know a few of them, and I ask others. Costco treats them well, and they stick around. You won’t find many Walmart workers that praise Walmart.
Yes, Costco’s business model is that if they can’t beat the price, they’ll add more value to the product instead. So the printer model will be a similar price as the standard one, but it’ll have a 2nd paper tray, or the Roku remote will have a headphone jack, etc. And slap an extra year onto the warranty.
While it’s rare to have clunkers due to Costco’s strict requirements for products that reach their shelves, it does happen. You’re unlikely to see them because they’re quickly pulled and not reordered. I’ve been told this when I don’t see something I’ve bought previously.
Back when I worked for VoiceStream (pre-T-Mobile) there was a run of Nokia 5190’s that were defective. Costco immediately pulled them from the floor of all locations and they didn’t return until the rush replacement shipment was received. I don’t remember if Costco issued rainchecks (I think they did) or customers were just told they had to come back.
I was told by some employees that they had to keep busy or they’d be written up. Also, almost all the employees I talked to (we stayed in the warehouse to activate the VoiceStream phones) complained about their jobs, but said they stayed because of the pay and benefits. A few quit, then came back.
Also, some of the employees are union, (I think the cashiers) and that was a step up from working the floor.