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Costco gained a cult following by breaking every rule of retail

• ineedasername 7y ago
  I quit Costco after I realized most items I needed from them were generally about the same or only pennies cheaper per unit, sometimes actually more expensive, and almost always cheaper when on sale at a normal supermarket. For example ground beef was usually about $3/lb, the same as my local supermarket has on sale every other week for the same quality/lean level. Couple that with the inconvenience of having to go to a second location for normal shopping needs, and one that is usually a jam packed on parking and checkout lines... It just wasn't worth it for the small handful of things that were a good deal.
  • AznHisoka 7y ago
    For me, it’s hard to find markets with salmon/steak as fresh as those found in costco.
    • rficcaglia 7y ago
      Ditto for fish in Hawaii. We tried both a local “fresh off the boat” market and Costco on the same trip and Costco was definitely higher quality for local caught fish. Same for salmon and halibut in Anchorage, Alaska.
      • sosborn 7y ago
        Costco is good, but next time you are in Hawaii just go the fish auction.
  • LeoPanthera 7y ago
    I shop at Costco for the quality, not the price. Supermarket goods can vary wildly, Costco is consistent.
    • madengr 7y ago
      Unfortunately they got rid of the Kirkland toothpaste. The Kirkland shampoo smells like shit; they stopped selling the large pump bottles of Dove shampoo. At least the contact lense solution is good.
      • Scoundreller 7y ago
        Some of this stuff is variable and by region. E.g. Kirkland toothpaste in Canada is different than US. Toilet Paper differs by region.
    • ineedasername 7y ago
      That is true, and turnover on perishables is probably quick enough that things are always pretty fresh.
  • benjohnson 7y ago
    It could be that the convenience comes when you need scale: When I was single the idea of a gallon tub of mayonnaise was purposterous, but with a family with three children, the single tub from Costco keeps us from having to replenish multiple small jars and worrying about coupons and timing sales.
    • ineedasername 7y ago
      I have three children too, I kind of like timing sales. It also makes me think creatively about meals: "Oh, London broil cuts are on sale, maybe I'll make beef stew" etc. I also hate having to make multiple grocery store stops. Totally comes down to preference though, I freely admit.
  • chillwaves 7y ago
    It's jam packed for a reason.
    • AznHisoka 7y ago
      “nobody goes there.. the lines are too long!”
    • ineedasername 7y ago
      I know, it's popular. Many people find actual value (just not me) while some shoppers assume "It's Costco, it must be a good deal." When that's not always the case. Regardless, it's popularity in this way makes it a negative UX for me. It can be jam packed at the local supermarket but I can scan items as I shop and do self-checkout and skip the 20 minute lines.
  • kart23 7y ago
    The gas is worth it though. Everything else is meh unless you're feeding a giant family or something.
    • mrlala 7y ago
      Feeding 2 growing boys costco can be a live saver in some areas..
  • skookum 7y ago
    I'm sure it varies from area to area but here in the Seattle area I've found that as compared to the standard supermarkets (meaning Safeway, QFC, Fred Meyer), Costco sells prime grade beef at the same price as supermarkets sell choice grade and organic chicken at the same price as supermarkets sell conventional. But what really gives Costco's meat department the edge is that their meat looks so much better/fresher than the supermarkets. It's a similar story for organic produce, eggs, and so on. Items like cheese, dried fruit and nuts are about half the price of comparable quality elsewhere. And then there's items like olive oil where Costco sells at a great price with the added bonus that you get actual olive oil and not some blend of unknown origin. But if you live near enough to a Costco and own a car, the real killer-app is their gasoline. In my area, it is 50-60 cents a gallon cheaper than gas stations. From this alone my membership would more than pay for itself even if I never stepped inside the store.
    • Scoundreller 7y ago
      > But if you live near enough to a Costco and own a car, the real killer-app is their gasoline. From this alone my membership Just clone the magstripe on a friend's Costco card for the gas ;) What I don't understand is why no gas station other than Costco has hoses that can reach around a vehicle.
      • skookum 7y ago
        But then I'd miss out on the 4% back from my Costco Visa for that gasoline. And even _just that 4%_ pays for the membership in my case. :D (My next-best card in terms of rebate on gas is 1.5%, so assuming an additional 2.5% from Costco, I need to buy $2400 in gas to have the full membership covered by just the gas rebate - not even counting the additional savings from the lower price of gas).
      • evil-olive 7y ago
        > What I don't understand is why no gas station other than Costco has hoses that can reach around a vehicle. Regular gas stations rarely have a line of people waiting for a pump. Costco often does. Managing that queue becomes much easier if any car in line can take any open gas pump, without worrying about which side the tank door is on (or messing with the flow of traffic by trying to back into a spot).
  • dominotw 7y ago
    > most items I needed from them were generally about the same or only pennies cheaper per unit are these exactly the same products or are you comparing equivalents ?
    • ineedasername 7y ago
      Costco rolls their own brand for things so it's generally the closest equivalent. Paper cups was one thing I particularly remember ticked me off, because their price per 100 was like 20% higher for no dicernible difference.
  • Scoundreller 7y ago
    I agree with that for a lot of items. But part of it is that I don't think Costco ever does loss-leaders like grocery stores will (except in gas and their restaurant). Hence why I don't buy Costco's milk. Costco is in a league of their own in Canada (and probably Iceland where they have a location). ex-USA, you just don't have deep-discounters. With such massive turnover, is that everything is fresh at Costco, and it's not because they're throwing anything away. Their stock probably sells out daily. And if you're not happy with them, you know you can return it a month later with a smile.
    • nwienert 7y ago
      The $5 whole roasted chicken is, checked with an employee on it.
    • jogjayr 7y ago
      > Costco is in a league of their own in Canada They sell cheese at almost-US prices! It's insane!
      • ineedasername 7y ago
        Why are Canadian cheese prices so high?
    • rdl 7y ago
      The Costco in Iceland is amazing. 150% of US prices, vs. 300-400% everywhere else. In Hawaii (cost) and Puerto Rico (cost and quality) it is pretty amazing, too. In Puerto Rico there is basically no other good supermarket; the next best alternatives are a couple horrible local chains and Walmart/Sams Club/CVS/Walgreens.
  • jogjayr 7y ago
    I make back the cost of the membership fee just by the savings on a couple of car rentals. Their rates are cheaper and they have free cancellation and no extra driver fee for your spouse.
    • lotsofpulp 7y ago
      I've found car rentals for way cheaper than Costco directly on the car rental website. The prices are changed constantly, so check the car rental company's website a day before or even a few hours before you need it, and you might find it for much cheaper.
      • jogjayr 7y ago
        I do that, but on the Costco website. The free cancellation means you can book and then cancel and re-book when the price drops. It's also easier when Costco is aggregating all the prices for easy comparison.
        • refurb 7y ago
          The ability to cancel and rebook is pretty common. Autoslash will do it automatically for you when a lower price is found. I’ve had it save me quite. I have no affiliation with Autoslash, just found it useful.
  • mrlala 7y ago
    We have a trader joes + costco right next to each other. Between both of those, I can get the best of both worlds. Yes you do have to be very careful with costco, because you end up just buying way too much. I have specific lists that I go in, and try not to veer from it at all. But saying most are "barely cheaper" I don't agree with at all. Almost every item I buy at costco is SIGNIFICANTLY cheaper. Sometimes half the price. Cheerios, bread, chocolate chips, some fruits, most vegetables, cheeses.. Shopping exclusively at costco will just get you into trouble yes- but there are significant savings if you are careful about it. And the quality is generally very high and reliable.
    • ineedasername 7y ago
      See, cereal is one area I hated Costco for. Very little selection, first off. And while their retail price was cheaper than local supermarket retail, the brands at local stores all rotate sales about once a month and I can get 40% to 60% (and often a free gallon of milk) over a much larger selection. So I stock up then, which is what I'd have no choice but to do buying in bulk from Costco. I'll admit I borrow the in-laws Costco card now and again to buy their whole briskets.
• deleted 7y ago
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• Mathnerd314 7y ago
  The story seems to be more about the mythos of Costco than its actual business practices. Sure they work with suppliers to reduce costs but so do all their competitors like Walmart and Trader Joe's. And they pay better wages but they also have fewer employees per store. And at this point most stores have worked around the membership issue by using loyalty cards and digital discounts.
  • maxerickson 7y ago
    75% of their profit is from the membership fees. They clearly aren't trying to work around the issue.
    • robocat 7y ago
      It is incredible that Costco can essentially make a *aaS recurring profit model business from a physical goods store. I wonder how immune it is to economic downturns/upturns?
      • Scoundreller 7y ago
        Downturns: People shop there more because it (can be) cheaper Upturns: People shop there because they have more $$$ to spend.
    • alister 7y ago
      > 75% of their profit is from the membership fees I've heard that before, but I can't see how it could be. My back-of-an-envelope calculation: Let's say I spend $1000 per year (I'm estimating low). According to the article, Costco's average markup is 11%. So they make $99.10 profit on my $1000 of spending. Let's assume that the $60 membership is 100% profit. The total profit from me is $159.10. My membership fees would be only 37% profit (60/159.10 = .37). Do vast numbers of people pay for $60 or $120 memberships and spend much less than $1000?
      • maxerickson 7y ago
        They make $100 of net revenue on your $1000 of spending. Markup isn't profit. They use that money to do things like pay their workers and heat their buildings.
• Simulacra 7y ago
  Costco is the buffet model turned into a grocery store. Why buy 8 ounces of mayonnaise when you can buy 5 pounds. It caters to the American lust/love of bigger = better, when in practice it might just be better to buy less, and thus buy more often.
  • Pfhreak 7y ago
    Except, for many things buying less frequently results in less packaging, fewer trips to the store, more economical purchases, etc. Lots of upsides to buy once, store for a while.
    • whoopdedo 7y ago
      But it requires you to allocate personal space to store those purchases. A second freezer, or larger cupboard. So greater pressure on real estate. If I'm economizing my living space I won't be shopping at Costco.
      • rficcaglia 7y ago
        I agree here. Second freezer and lots of space for storage is a must. Not for tiny apartments. A suburban phenomenon mostly.
    • skookum 7y ago
      I'm a big fan of Costco, but packaging is one area where I'm not sure how well it works out from an environmental footprint perspective. Buying milk? 3 standard cartons in a big cardboard box. Tomatoes? 4 lbs in a cardboard box wrapped in plastic where you would have used the same amount of plastic minus the box at a supermarket. Many of the items they sell are in the standard packaging then packaged in one additional layer of multi-unit packaging. I understand the need for it due to requiring stacking the items in large quantities plus efficiency of checkout and I optimistically hope that supply chain efficiency offsets the additional packaging but I'm not sure what the reality is.
      • 7y ago
• nobody_nowhere 7y ago
  I love Costco as a customer and a shareholder. High quality products. Less frequent shopping. Ethical practices. Protip: for perishable items like produce, we have a "Costco buddy system" -- a few nearby friends who we can split bags of limes or onions with. Huge savings on produce this way.
  • Pfhreak 7y ago
    They treat their workers well. Or at least they did when I worked there 15 years ago. I was paid like $13/hr, time and a half on Sundays, 401k, health benefits, and regular raises. Which is pretty fantastic for someone making pizzas and slinging hotdogs.
    • xenihn 7y ago
      They still do. Trader Joes does too. I love both stores, and do most of my shopping between the two. It's nice to know that 99% of the retail people I interact with are being treated well by their employers.
  • Scoundreller 7y ago
    And get a second membership card for your friend/family member that... lives in the same residence as you.
  • rficcaglia 7y ago
    Get a second/dedicated freezer. Juice the limes; mince the onions in a cuisinart. Freeze in 1-4 cup restaurant style containers you can get at any restaurant supply store. We also bbq 3 racks of ribs, 4 whole chickens, 2 3-pack chicken breasts (about a dozen breasts), 3 packs of chicken legs, and 12 pork chops at once one day every 3-4 months. Use a big spice mix from Costco. Everything is usually organic (pork is often not organic though...butcher told us there simply are not enough organic pork producers in the US.) We sometimes invite friends and split the finished goods. Drink Costco craft beers and premium wine during prep and bbqing. (It helps to have 2 large grills). Wrap dinner sized portions for your family size in foil (also sold at Costco of course) label with a sharpie and freeze. Dinners ready for months!
• sunstone 7y ago
  One of Costco's biggest innovations was figuring out how to manage channel conflict for its everyday products.
  • neonate 7y ago
    What's channel conflict?
    • _jal 7y ago
      I make widgets, and contract with you to sell my widgets exclusively in some geographic region. Then I start selling my widgets on my website, and people from your region start buying things via my site. We have a channel conflict. They happen in other ways as well.
      • Drdrdrq 7y ago
        Thx. So how does Costco manage this?
        • phamilton 7y ago
          Often by selling Costco specific versions of things. For example, Google Wifi is normally available in 1 packs and 3 packs, but Costco offers a 4 pack. It's literally just a 1 pack and 3 pack put into a bigger box, but it sells for $299 vs the 3 pack at $259.
          • foogazi 7y ago
            Yes this specifically I bought the 4 pack and it was weird that it was packaged 3 & 1
• niyazpk 7y ago
  The fact that I can trust Costco to have good quality products with low prices and great return policy means that I never have to buy day-to-day items from Amazon. Amazon is where I go to buy books (and obscure one-off things that I can't buy from anywhere else). When buying from Amazon, I have to read the reviews, analyze them to figure out if the reviews are fake, read the return policy, research the seller, figure out the shipping dates etc. Given how broken the search is, I am not even sure if I am buying the best item in the category. Most of the time I end up reading wire-cutter reviews before buying from Amazon. Amazon has billions of items at this point, and it is on me to figure out the right stuff that I should buy. I don't have that kind of time or patience to read hundreds of reviews before buying every single item. Compared to this, Costco is a breeze. If they carry it, I just buy it assuming that it is going to be good quality. For me, the value they provide is curation of selection and filtering for quality. I am willing to pay the membership fee for this. And this is anecdotally true for almost all of the families in my friends group in the Seattle area. I can see the perspective that if you don't have a family, the savings are probably not a big deal. And I also agree that there are people who don't want to drive to a store to buy stuff. But, I for one, am glad that Costco exists.
  • techntoke 7y ago
    Costco has some nice products, and usually has a good food selection, but there are times when they sell junk products as well. Their health and hygiene section can be hit or miss, and if you're looking for more natural products similar to what may be sold at Whole Foods then your best bet is Amazon. Costco usually have a descent selection of organic foods cheaper than you'll find almost anywhere else. One area that I'm disappointed in is their computer selection. Although you may be getting additional support and a cheaper warranty, they simply don't refresh their hardware enough. Almost all their computers are lower end and still expensive compared to what you'll find on Amazon, especially if you price out the cost of building a desktop with much better and newer parts.
    • holychiz 7y ago
      a technically well-versed audience like this HN crowd is not really the customer base for computer equipment from Costco. In keeping with their product offering approach, Costco is catering to the people too busy and/or don't find it fun to evaluate computer equipments. What their customers know is that what Costco offers is good enough and pretty good value. The liberal return policy helps ease customer concerns about making equipments work. Looks to me like Costco is doing it pretty much right.
• ohazi 7y ago
  Costco's average selling price is also quite high. Very few items sell for less than ~$10, and anything that would normally go for significantly less gets sold in Costco-sized bundles to keep the unit price up. One of their limiting factors for revenue per store is how quickly they can scan products at checkout. Higher ASP means more revenue for the same number of scans.
• lpolovets 7y ago
  For anyone interested in how Costco works as a business, there was an interesting 150-slide deck circulated last year that had some good insights and observations about Costco's model. https://www.dropbox.com/s/7hohqj3rl2uv43p/COSTCO%20Deck.pdf?dl=0 https://www.dropbox.com/s/7hohqj3rl2uv43p/COSTCO%20Deck.pdf?...
  • jdsalaro 7y ago
    This deck is very interesting, assuming the data it's based on is legitimate. I didn't expect that to be the extent to which they outperform their competitors.
  • EricE 7y ago
    Excellent find - summarizes a lot of points I have heard over the years too; I find it very credible.
• mpalczewski 7y ago
  I find going to Costco in an urban area really painful. Lines just for parking 3 blocks away. Crowds of pushy unpleasant people and lines. If you value your time and well being, it ends up not so much of a bargain. Now using Instacart to get Costco delivered, love it.
  • moltar 7y ago
    You just have to time it right. I try to walk in 15 minutes before they stop letting people in. At my local store that’s 30 mins before official closing time (8:30pm). By the time you finish your round, all of the people before you already exited the store. Also, never on a weekend. Monday tends to be the slowest day in retail.
    • sunstone 7y ago
      At my Costco Monday morning is super busy with small business buyers. Afternoon is ok.
      • moltar 7y ago
        I’m talking about nights though. Morning busy does make sense.
  • techntoke 7y ago
    Haha, the worst are the people that go in there to get all the free food samples and carelessly block the isles with their shopping carts while they stand there and eat like they are oblivious to anything but food. Or when you go to leave the store after paying $200 and you have to wait in a long line for them to check the receipt. They need a fast lane for people that just want to get stuff and go, and store clerks that fine people for blocking traffic.
    • jdironman 7y ago
      Or, make it impossible to go anywhere but out after paying. Just like ticket gates / events funnel people in, just funnel them out.
• creddit 7y ago
  FTA: > Costco has found immense success by prioritizing the interests of its customers and employees over those of its shareholders. I always hate articles that are premised on the above because the article always ends up contradicting this point. The truth is, Costco has been great for all of the above over the last 5yrs. I wish people would stop making it seem like the core of any successful business and what is taught in B Schools is screwing over everyone except yourself. It's just not how the world works and that's proven over and over again.
• jasode 7y ago
  I don't remember where I read the following analysis (maybe from someone here on HN?) but it goes something like this... Costco's membership fee (minimum is $60) has several benefits that the media don't like to talk about -- because it's unpleasant to mention it. The membership fee charged by Costco helps keep the riff-raff out. Although the cheapest Costco membership at $60/year looks like a trivial amount to middle-income people, even that tiny cost is enough to be an unreachable Mt Everest for the poorest segments of society. Therefore, the membership fee acts as a socially acceptable way to keep out the undesirables. Often, you'll see a thread on reddit showing photos of "Walmart shoppers" with tube tops and loose pants with butt cracks showing. That's not the type of clientele that shops at Costco. Walmart also has a huge problem with shoplifting and employee theft (what the retail industry calls "shrinkage") and therefore, there's often a police car outside to arrest somebody. Costco's membership requirement is the hurdle that helps them avoid all that. Costco makes money on the membership fees itself, but they also save money by not having to deal with shrinkage because their higher-income clientele has less problems. The above advantages only adds to the other positives such as simpler logistics of ~4000 SKUs at Costco vs 40000 SKUs at Walmart.
  • hogFeast 7y ago
    Another point is that paying upfront for something means you have to use it. I remember when I joined a real cult. It cost $5k just to join, and another $5k to advance a level. So when you are down $20k and someone asks you to move to the Brazilian rainforest to live in a mud hut...well, you can't really say no. Remember: you can fly to Brazil, just don't enter the cave.
  • youeseh 7y ago
    Costco also has security personnel that work hard to prevent shoplifting - from people walking around, to the people by the exit who crosscheck the receipts with what they see in the cart.
    • timClicks 7y ago
      Naturally, but defense in depth.
• camhenlin 7y ago
  I love love love Costco. Just an anecdote, but I reinforced my love for Costco yesterday in fact. Back in February, I bought new flooring for my entire house at Costco. Since I was doing my entire house, I over purchased to ensure that I wouldn’t run out. I work full time so it took my a long time to finish installing the flooring, about 8 months. Yesterday I returned all the packages of flooring I didn’t use to Costco. The person working at the return counter didn’t even bat an eye at the fact I’d bought the flooring so long ago, she just handed me a wad of cash back. Absolutely great return policy. It would have been impossible to do something like that at Lowes or Home Depot, both of those stores give you a hard time after 90 days. I try to do all of my shopping at Costco and this is why. They just treat customers so, so well.
  • madengr 7y ago
    Bought a TV that died at 5 years. Costco had a 5 year warranty, so they gave me cash back, which I promptly bought another. The new one has a seven year warranty, which is a combination of manufacture, Costco, Costco credit card, and Square Trade. Just can’t beat that anywhere else.
  • sethammons 7y ago
    Our friend saw someone return snap together wood flooring with nails in it. Costco took it. Amazing. Granted, shitty for a person to abuse that, but amazing for Costco to honor it
  • KorematsuFred 7y ago
    My friend from India purchased something for his wife while visiting me. It did not fit her so next year when he visited me he returned it at Costco. They took it back no questions asked.
• nickjj 7y ago
  Cult following is a good choice of words. It's one of the few businesses where I feel like they get most things right. It's always a good experience going in there and walking out with a cart full of things. I'm happy to see them be successful. I usually buy frozen meats and things that don't expire quickly in bulk and then they last for months. I reserve vegetables and fruits for a local grocery store since their quality is good and those things tend to go fast. But at Costco sometimes you get lucky with clothes too. They were overstocked on Puma sneakers in my exact size. Each pair was $10 and they are exactly the style I like (low cut / not flashy) so I bought 2 pairs of them. I legit walk 3-5 miles a day with one of the pairs and over a year later of walking on concrete they are still fully in tact (no holes, good looking enough to wear them out to dinner, etc.). It's mind boggling. I've never had a pair of sneakers last this long while still looking presentable after that much usage. The 2nd pair I bought is still brand new. Those sneakers alone cover the cost of like 2-3 years worth of membership fees.
  • labster 7y ago
    Costco has better quality meat than the grocery stores -- although I don't find their prime grade meats to be significantly better than the choice cuts. The vegetables and fruits are high quality too, but I live with enough people to make it worthwhile. I live across the street from a grocery store. Over the last 30 years, I've seen it transformed from a slightly upscale supermarket to a glorified mini-market. After every remodeling or floor space expansion, the selection and service would get a little worse. Now that Albertsons bought all of the supermarkets in the area they've significantly cut the quality in the last bastions of why I would shop there at all -- produce and bakery. They do have a large enough alcohol section that I get to see shoplifters running out of the store all the time. So now I'm driving ten miles to Costco to get quality ingredients when I live across the street from a supermarket. The clerks read their script, "Did you find everything you need?" and I respond, "Well, I didn't find X and Y." Their response: "Oh." And people wonder why they're all losing ground to big box stores. In retail you can compete on service, selection, and/or prices. Fry's Electronics chose the last two, but were undercut on both by Amazon. Local supermarkets seem to have yielded on all three to Costco which is freaking crazy.
• harryh 7y ago
  Fun fact about Costco. More than 100% of its profits come from membership fees. The actual selling of goods loses a small amount of money. See this super interesting twitter thread: https://twitter.com/investing_city/status/1179974257779982336 https://twitter.com/investing_city/status/117997425777998233...
  • LeoPanthera 7y ago
    Is that surprising? I thought that was the whole point of Costco, and other "warehouse clubs". Charge membership - sell the products at cost.
  • ehsankia 7y ago
    Well the article does mention they run at 11% markup (compared to 25-50% in average retail), so I guess the cost of operations is roughly within that 11%, and the subscription is the profit.
  • deleted 7y ago
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  • gbrown 7y ago
    No wonder I got such a pushy hard sell to upgrade. I was flat out promised that the upgrade couldn't possibly cost me more, even if I didn't shop very often and never took any special action. This was a lie, I lost around $100, and I stopped shopping at Costco.
    • jib 7y ago
      The upgraded membership is 60usd more than the normal, gives you 2% back on purchases, and they will refund it to you if you ask, so not sure how you could lose 100 on that.
      • gbrown 7y ago
        Maybe it was 60. I literally asked the cashier: "I will not remember to request a refund. Will it be automatically credited to me if I do not meet the threshold?", and they told me yes.
• dev_dull 7y ago
  Both Costco and Trader Joe’s have a winning recipe: keep a limited amount of any one item, and do tests to see what that best item is. I trust that the tortilla chips at Costco are going to be pretty good even if I haven’t had them yet. Same with TJ. Contrast to the traditional supermarket: throw spaghetti at the consumer and see what sticks.
• tdburn 7y ago
  For our honeymoon we booked through Costco travel to Cancun and it was a great value, and one of the benefits was knowing they had our back if there were any flight cancellation/delays. My wife had used them a year previous to Hawaii which had a flight cancellation. The airline wouldn’t make her whole on the hotels/excursions. But Costco went to bat and got all of her money back and some.
• IAmGraydon 7y ago
  Costco really has an interesting business model, but the part that really hooks me is the quality/price ratio you get there. If you buy an item at Costco, you can absolutely bet it’s going to be the highest quality item in whatever category you’re shopping. You can also bet it’s significantly more inexpensive than anywhere else you can get it. I spend around $10,000 at Costco every year and every time I walk out I feel like I got a great deal. BTW, if you’re a member and haven’t tried the Kirkland (Costco’s house brand) wines, prepare to taste an $8 bottle of wine that puts every $100 bottle you’ve ever tasted to shame.
  • sumedh 7y ago
    > You can also bet it’s significantly more inexpensive than anywhere else you can get it. That is not true atleast in Melbourne (Australia), comparing the prices with other super market chains, Costco is a bit more expensive.
  • hunterloftis 7y ago
    > If you buy an item at Costco, you can absolutely bet it’s going to be the highest quality item in whatever category you’re shopping. > prepare to taste an $8 bottle of wine that puts every $100 bottle you’ve ever tasted to shame. Are you sure that Costco is in the "absolutely highest quality" category? Rather, I'd suggest they're in the "a little nicer than average, and definitely not garbage" category that most regular folks are looking for. For example, our largest Costco purchase (besides our mortgage - btw, Costco has great mortgage rates!) has been our washer and dryer. The units are certainly not "highest quality in category" but they are pretty nice. Similarly, Costco wine is good, but I have had $100 bottles that were better.
  • Loranubi 7y ago
    > BTW, if you’re a member and haven’t tried the Kirkland (Costco’s house brand) wines, prepare to taste an $8 bottle of wine that puts every $100 bottle you’ve ever tasted to shame. The Kirkland Sangria is however awful.
• dboreham 7y ago
  They also pay their employees reasonably well, which makes for an efficient and pleasant shopping experience.
• nilkn 7y ago
  The one notable experience I have with Costco is with buying a Samsung TV. The Samsung warranty only lasted a year. Costco extended it free of charge to two years. They offered in-home delivery for a great price, and on the eve of the two year mark when the TV developed vertical banding they picked it up from inside our home for no charge and gave me a full refund -- which I then invested in a new TV from Costco.
• tmaly 7y ago
  I really like the Costco locations with gas. That alone pays for the cost of the membership. Diapers, paper towels, ziplock bags, dish soap are some of the other things I buy there. The organic chicken, pork tenderloin, and baby back ribs are solid deals compared to other places I visit. For smaller stuff like fruit, garlic, onions I stick with Trader Joes ( Aldi )
• freeflight 7y ago
  As a German, the way Costco operates is really interesting. I guess the closest comparable thing to Costco in Germany would be something like Metro or Selgros. Tho access to those isn't "gated" with a membership fee, but with a business license, as their target audience are actually other businesses and not individual customers. Where do US American businesses go to buy their wholesale supplies?
  • deleted 7y ago
    [deleted]
  • ww520 7y ago
    There's Costco Business Warehouse, catering to business buyers. Restaurants buy from them. It has whole pig, lamb, lots of soft drinks, and other stuffs to run a restaurant.
  • pjlegato 7y ago
    Costco was started as a business supplies wholesaler. They shifted to a consumer orientation and not requiring a business license as they realized that most customers were buying significant amounts for their own personal use, and not just for business use. There are still many other strictly business-serving wholesalers, too, of course, often specialized by vertical - e.g. Sysco is specialized in foodservice.
• ww520 7y ago
  Costco's return policy is amazing. I bought a bidet once and after three years the thing stopped working. The warranty had long passed. On a whim I took it back to Costco and they accepted the return. I kind of felt ashamed to return a used toilet item. For large ticket items, I now buy from Costco with their Citi credit card, which has 2 extra years for extended warranty on top of the manufacturer warranty.
• saboot 7y ago
  I like costco, very much, however the contracts they have with home-services (water heater replacement, flooring install, solar install, blinds, etc.) are marked up 2x-3x what you can get elsewhere.
• dottrap 7y ago
  I want to know, how do Costco's sale prices (coupon book) affect the markup/margins on a product? If the normal markup is less than 11%, is the sale price markup less than say 5%? Edit: Or alternatively, are Costco sales negotiated ahead of time with the product makers so the makers are taking the cut and Costco's margins remain?
  • TheSoftwareGuy 7y ago
    Costco doesn’t make a profit on most items it sells, and some times it even loses money. They get money almost entirely from memberships
    • LanceH 7y ago
      I you apply membership revenue to operating costs, then all the profit comes from margins on sales.
• isignal 7y ago
  It appears the origin of the idea was in a non-profit consumer organization called FedCo - https://en.wikipedia.org/wiki/Fedco https://en.wikipedia.org/wiki/Fedco. This company then inspired Sol Price to found the modern day bulk retail model. From wikipedia: "It was founded by 800 U.S. Post Office employees who wanted to leverage their buying power by purchasing goods directly from wholesalers, and eliminate the additional markup of a retail store"
• andrei_says_ 7y ago
  Well-paid workers, a limit on markup and careful curation of quality products get my dollar-vote every time. Thank you, Costco! On the other hand, maximizing exploitation (treating workers with no respect and no humanity, paying them as little as possible and having my taxes cover the difference), maximizing profit (manipulating me and anyone using the platform as much as possible as to extract more) and peddling an avalanche of crappy and fake products... do not take my dollar-vote, Amazon.
• lonelappde 7y ago
  No one goes to Costco anymore, because it's too crowded, as the saying goes. It's become a victim of its own success.
  • rficcaglia 7y ago
    from what I see, and do, people just go there early AM 5 min before it opens. Avoids the folks who flock around the free handouts at lunchtime. Parking is easy. But you can’t wait even 1/2 hour past opening. Get in right as it opens.
• macintux 7y ago
  When I regularly printed my favorite photos in large sizes, there was a Costco in my area well-known in the photography community for having a well-calibrated printer and knowledgeable staff, and their large sizes were crazy cheap (I think perhaps $3 for a quality 12x18 photo). Much easier than keeping my personal printer running properly.
• gao8a 7y ago
  Costco is the saviour of small islands like Iceland, and Vancouver island. Good video: https://youtu.be/4xOxXmyPD0I https://youtu.be/4xOxXmyPD0I
• ctdonath 7y ago
  "Just what I wanted! A 4-pack of grand pianos!"
• planteen 7y ago
  I don't understand all the love for Costco here. I recently rejoined and now remember why I canceled in the first place. I recently had a baby, so I joined for the diapers. Well, on my first trip, I learned they don't carry P or N sizes. Now that my baby is big enough for size 1, of course they are out of Huggies in size 1. But they have the Kirkland brand, which is a crapshoot in general. I used to love some canned mushrooms they had, then they just stopped carrying them. I loved calzones they stopped carrying 5 years ago. Sometimes you can get Tide or kombucha there, sometimes not. Kirkland products can be great, then they suddenly change them. And nothing makes my blood boil like a line to leave the store for the receipt check while you have to fight off the Lennox, phone, and solar sales people. At least my neighborhood King Soopers is consistent with stocking products and keeping their store brands the same.
  • thedailymail 7y ago
    Receipt checks are an instakill on any affinity I might have for a business. Once the items are paid for and past the register, I find it despicable that anyone feels the right to inspect my belongings. (I realize it's in the membership contract, and it is the reason I quit using Costco.)
    • 1123581321 7y ago
      I feel the same way; I know it’s a bit irrational but it’s really annoying and leads me to minimize trips. I especially don’t like that they will insist it has nothing to do with LP and is only to make sure shoppers saved as much as they were supposed to; I resent being lied to so blatantly. Sadly, this practice will continue to push the transition to online ordering.
• bane 7y ago
  One thing not mentioned in many of the comments is that Costco also rotates inventory based on season. A huge percentage of the inventory will change depending on what time of year it is and that can lead to both a kind of scarcity buying ("who knows when they'll have these pants again?") and novelty ("I wonder what they have this week?"). That, plus the bulk savings, plus the membership benefits (an almost absurd return policy), plus a well curated inventory of mid-to-high quality items (plus savings of own-brand "Kirkland signature") means Costco shoppers buy a lot, they buy often, and they keep doing so for years and years and years. It's highly fragile in the sense that it's so simple, but other competitors haven't made a huge dent in the same segment (Sam's Club, BJ's, etc.). Costco is doing some magic combination right and they'll be the study stuff of b-school grads for decades. edit one other thing. Model #s for Costco are often unique to Costco. It also makes comparison shopping difficult. Try comparing a printer or TV model # at Costco to others on-line. Chances are it only exists at Costco, which means both exclusivity as well as an assumption of quality + price due to other in-store contextual buying. People think they're buying something that's both special and a good buy, which further validates their yearly membership dues.
• pnathan 7y ago
  the only reason I don't shop at Costco anymore is because we could almost never buy goods in quantities small enough to be feasible for our living space and rate of consumption. Great store, otherwise.
• novok 7y ago
  I always thought of costco as the suburban lifestyle store. Where everything is costco sized for american sized suburban houses.
• novok 7y ago
  I always thought of costco as the suburban lifestyle store. Where everything is costco sized for american sized suburban houses for american sized families.
• tus88 7y ago
  It is pretty amazing. A shop where I can roll up with a bag full of cash and ready to spend, and they say sorry, you're not a member, go spend that money elsewhere.
  • foogazi 7y ago
    or become a member
• bobzankz 7y ago
  My family has had mixed feelings about Costco. While it does sell bulk products, it makes local business struggle for clientele and sometimes runs them our of business. As someone from a family who has a locally run business it is difficult to support.
• myrandomcomment 7y ago
  My wife will not allow me to go to Costco unsupervised. :)
• JoeAltmaier 7y ago
  A bit of hyperbole. Dark aisles? Stack of wooden pallets? Not in my Costco. Its almost too bright in there, and stuff is racked on custom high-volume plastic pallets?
• acl777 7y ago
  Great documentary I saw on CNBC about Costco: The Costco Craze - Inside the Warehouse Giant https://www.cnbc.com/the-costco-craze-inside-the-warehouse-giant/ https://www.cnbc.com/the-costco-craze-inside-the-warehouse-g... My key takeaways: - Costco orders at scale - any suppliers they work with has to be able to supply millions of items per week - Costco procurement works with suppliers to optimize the suppliers' process for Costco (it's a conversation, not an order) - Costco really thinks about their members' preferences. When they procure at such quantity, they don't want to be stuck with it! Another thing I did not know: Costco has EVERY purchase each member has made since 2009! The fact that they will honor (almost) any return of their item since then is mind-blowing. If you want to return something before 2009, just show them the receipt. The only thing they won't let you return is electronics past 90 days (dammit! :-) )
  • rantwasp 7y ago
    you used to be able to return electronics (even after years). people abused it
• EricE 7y ago
  If Costco doesn't have it, I don't need it.
• jrjarrett 7y ago
  I'm wondering how Costco has managed to hold out against the stockholders demanding more. Bravo to them for doing it!
• peter_d_sherman 7y ago
  Excerpt: "When Costco comes across a product it likes, it often spends months working closely with the vendor and its factories to both reduce the price of an item and amp up its quality. In the 2012 CNBC doc “Costco Craze,” a Costco buyer related one tale about a toy he found that retailed for $100. The company had the option of buying the unit for $50 wholesale and selling it for around $60 — but this wasn’t good enough. Over a period of months, Costco ended up working with the vendor and its factory to redesign the toy from the ground up, analyzing every part of the process for ways to cut costs. In the end, Costco got the vendor to reduce the price by 50%, and sold it for $30." You'd never think that a retailer could or would do that, but Costco apparently does!
• Noos 7y ago
  No, costco does well because warehouse clubs target B2B markets as well as consumers. I used to work at a warehouse club, and generally people would come in to stock food banks, buy for restaurants, supply their vending machine routes and halfway houses, and more. Thats why all the giant size packages. They lock in the small business market or nonprofits, because its far easier to buy in bulk there than navigate a grocery store.