4 ms·

I paid $0.97 at a Costco in Wisconsin the other day. That said, I’m not sure why it was so cheap there. The going rate at other stations was about $1.39 and th

I paid $0.97 at a Costco in Wisconsin the other day. That said, I’m not sure why it was so cheap there. The going rate at other stations was about $1.39 and they’re usually closer together than that.

lotsofpulp 7y ago
The other gas stations are profiting off of the spread until people realize they can get it much cheaper at Costco or other gas stations. Costco reacts quicker because they probably don't care about making money on gasoline, and they have a goal to always be offering it at or near cost.
- theseatoms 7y ago
  Sort of like what's about to happen to housing prices, maybe.
- AdamJacobMuller 7y ago
  Costco doesn't care about making money on the things they sell, in general. Costco makes more money from membership fees [1] and this is basically their stated business model. They try to sell everything at a small markup (just covering overhead) and the membership fees are basically profit. [1] https://www.fool.com/investing/2019/02/13/how-costco-actually-makes-money.aspx https://www.fool.com/investing/2019/02/13/how-costco-actuall... https://thehustle.co/costco-membership-economics https://thehustle.co/costco-membership-economics is a good read too.
goda90 7y ago
Costco and Woodmans in the Madison area are under $1 as of a few days ago(Costco because memberships, and Woodmans because no credit card fees). Smaller towns had 93c at the regular gas stations the week before.
repiret 7y ago
A lot of gas stations set their price based on a fixed markup from their costs, and only update their prices when they get a new delivery. High volatility and low sales volume can lead to outdated prices that way.
yumraj 7y ago
I have noticed in the past that when oil prices are going down, Costco becomes waay cheaper than other places. But when the oil prices are rising, Costco is not that cheaper. In other words, Costco prices are updated more frequently than regular gas stations.

lotsofpulp 7y ago

The other gas stations are profiting off of the spread until people realize they can get it much cheaper at Costco or other gas stations. Costco reacts quicker because they probably don't care about making money on gasoline, and they have a goal to always be offering it at or near cost.

theseatoms 7y ago
Sort of like what's about to happen to housing prices, maybe.
AdamJacobMuller 7y ago
Costco doesn't care about making money on the things they sell, in general. Costco makes more money from membership fees [1] and this is basically their stated business model. They try to sell everything at a small markup (just covering overhead) and the membership fees are basically profit. [1] https://www.fool.com/investing/2019/02/13/how-costco-actually-makes-money.aspx https://www.fool.com/investing/2019/02/13/how-costco-actuall... https://thehustle.co/costco-membership-economics https://thehustle.co/costco-membership-economics is a good read too.

goda90 7y ago

Costco and Woodmans in the Madison area are under $1 as of a few days ago(Costco because memberships, and Woodmans because no credit card fees). Smaller towns had 93c at the regular gas stations the week before.

repiret 7y ago

A lot of gas stations set their price based on a fixed markup from their costs, and only update their prices when they get a new delivery. High volatility and low sales volume can lead to outdated prices that way.

yumraj 7y ago

I have noticed in the past that when oil prices are going down, Costco becomes waay cheaper than other places. But when the oil prices are rising, Costco is not that cheaper. In other words, Costco prices are updated more frequently than regular gas stations.