3 ms·
>Is selling bulk items a way to keep "riff-raff" out? Yes, bulk size prices can act as a secondary filter but an interesting mechanism is the membership cards
by jasode 7y ago
>Is selling bulk items a way to keep "riff-raff" out?
Yes, bulk size prices can act as a secondary filter but an interesting mechanism is the membership cards are checked at the door and physically keep people out whereas bulk prices (even if low-income people don't buy them) don't accomplish the exact same effect. Membership gatekeeping at the entrance keeps the undesired shoppers away from the loss leaders of cheap $2 hotdogs & pizza, and taking advantage of the various free samples of food demonstrated at the aisles without buying anything. The door-based gatekeeping (as opposed to bulk prices gatekeeping) also minimizes customer shoplifting, etc.
There are also multiple levels of what "bulk" supply is. Is it restaurant-sized bulk (e.g. a gargantuan 4-gallon tub of mayonnaise) -- or a more modest family-sized type of bulk (e.g. 35-cans of Costco brand Kirkland soda for $7.99). Walmart sells 20-can pack of Coke for $16.00.
There's a lot of stuff that Costco sells that poor families could buy. Their bread is very cheap and one can buy 1 loaf for $5.00 instead of buying in bulk. Another person mentioned Costco gasoline is often the cheapest in town and poor people could save money refilling their car there.
Their Kirkland clothes are really inexpensive. I just bought a 6-pack of Kirkland tshirts for $12.97. Walmart sells 6-pack FruitLoom for $16.00. (I think you'll agree 6 count of tshirts is not a bulk supply.) However, to save $3.00 on tshirts in that one transaction and similar subsequent ones, one has to plan ahead and spend $60 upfront. If you look at businesses for poor people like cash checking services, payday loans, and "Buy Here Pay Here" used-car lots, a lot of low-income people really can't scrape together $60 and pay it now for the purpose of saving more than $60 in the future. Their budgeting is so day-to-day (literally "paycheck-to-paycheck") that they have to shop at Walmart which is often more expensive than Costco.
EDIT add for clarity: when you say ", $60 cash upfront for a membership fee is nothing compared to all the cash you need to buy bulk items upfront", you're using a middle-class income lens. E.g. I'm also middle class and I spend $7000/year at Costco which dwarfs the $60 membership fee. Yes, poor people can't spend that same way. Instead, I'm saying that poor people can spend much less (say ~$500/year) and still get more than $60 savings back without tying up lots of cash in bulk purchases like you and I would do.
- fortran77 7y agoThat's why my local Food Bank/ Community Services (Sunnyvale Community Services) likes cash donations. They then go and shop at Costco for many items for the poor--including essential clothing items.
- sunstone 7y agoSlight clarification, I'm pretty sure you can eat at the hotdog bar without a membership.
- jasode 7y agoYes, a recent reddit thread[0] says it varies on location. Some Costcos have hot dog food court outside instead of inside. And for the food courts inside, some stores' staff check for a membership card, and some don't. [0] https://old.reddit.com/r/Costco/comments/9bvjea/can_i_get_a_hot_dog_without_a_membership/ https://old.reddit.com/r/Costco/comments/9bvjea/can_i_get_a_...
- Scoundreller 7y agoIn a lot of places, their pharmacy isn't allowed to require a membership, so just say that and they'll let you in the store.
- jnellis 7y agoIt's a federal law, so its all places (in America.)
- neltnerb 7y agoYou can go to the liquor store at the one near Boston as well, though their prices are worse than several of the dedicated liquor stores down the street. I've known people to go there as an after practice group activity to talk and eat incredibly cheap food. I wonder if they actually do lose money, their selection is so limited and the amount sold so high. I bet they make a small profit.
- nickpsecurity 7y agoI'll add two other benefits: 1. Poor people can group up to split both the membership fee and bulk items. Especially things like soap or razors with big discounts. 2. Costco also makes healthier stuff available at low cost that you might not match per ounce or whatever elsewhere. The Grow Right Orange Juice (2-pack), mix of rice/amaranyh/eyc (5-pack), and Go Organic Detergent are examples in our household. This will appeal to working-class and up mostly but some poor people still get some healthy stuff. Esp for kids or folks that are sick. Aldi is first choice, though, since remodel added tons of healthier stuff.
- thaumasiotes 7y ago> bulk size prices can act as a secondary filter but an interesting mechanism is the membership cards are checked at the door and physically keep people out whereas bulk prices (even if low-income people don't buy them) don't accomplish the exact same effect. But this is untrue. Costco doesn't check membership at the door. That would block you from purchasing things that don't require membership. They check membership at the cash register. Anyone and everyone is free to walk inside.
- jasode 7y ago>Costco doesn't check membership at the door. That would block you from purchasing things that don't require membership. The 3 Costcos in my area all have staff checking for membership cards right at the door. Yes, if one knows the "life hacks" such as the pharmacy hack, the liquor law hack, the "I'm picking up contact lenses at the eye center for my friend" hack, and lastly, the "I want to browse the store before I buy a membership" hack, the staff will let you through. Apparently, all the above hacks are enough psychological friction and/or are not well-known that Costco has much less volume of problem shoppers than Walmart.
- thaumasiotes 7y agoThis is good evidence that the membership checks provide value to customers by keeping the riffraff away. It's terrible evidence that the membership requirement provides any such value. Those checks are independent of the requirement -- as you acknowledge, the guards at the door are not even empowered to turn you away if you want to go in. (That said, I'll repeat that at my Costco, there is no check at the door.) In a better world, Costco could admit that the "membership checks" are actually there to keep the tone of the store at a certain level, not to check membership. It'd be more convenient for everyone, and also more honest.
- beagle3 7y agoLast time I was in a costco in maryland they most certainly did check membership at the door. Maybe it varies by store/region.
- 7y ago