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.
You think Amazon search is broken for you? Try living in a semi-supported country, like Ireland, Poland or Switzerland. There is no "only items that ship to my country" in search. And on top of that, I've hit items that would ship as seen on product details, but only during checkout I would learn that shipping the $20 smartphone-sized item would be $250.
Does this really happen while using the euro Amazons? It sounds like you might be ordering from .com, in which case the same thing would happen in “supported countries”.
Even .co.uk that has a healthy level of UK product, does not let you exclude "Amazon Global" .com items as though you would be quite happy to pay £30 shipping, VAT and import fees on branded £50 jeans. IIRC you can't exclude global marketplace from search either. eBay has a UK only tick box.
Mostly there are aren't too many Global items, but in clothing particularly they can crowd out the rest, and seem to intentionally block the exact same item if it's not directly from Amazon UK. It can be quite frustrating, particularly as many are stuff UK used to carry. Though it's not among the main contributors to why I rarely use Amazon much at all any more.
Looks like on Amazon UK filtering for Prime (even if you're not in a Prime country) gets rid of the Global items, IME this is the only reasonable way to shop on Amazon anyway.
Amazon without the Prime filter is just Ebay with much worse prices and UX.
Yes this most definitely happens with the euro Amazons. In fact, it's the .com Amazon that seems to be running a newer version / experiment lately where sometimes the search only shows stuff that ships to my configured address.
The most annoying thing however is when the search contains an item, then the description on the item's dedicated page has text that specifically says that the item will ship to my address, but then during checkout I get an error message saying that the specific item can't be shipped after all. Feels like the description page text is determined willy-nilly and it's not until the checkout that they take into account the package size and weight.
However I sometimes do want to see what's available even without direct shipping to me, because if the item is cheap enough or rare enough, it will be worth using a reshipping service in whatever country Amazon does ship to.
I disagree here. Costco is now often trading on its reputation for getting you a bulk discount, but when you compare them to Aldi, or even to a larger supermarket, you're often getting things in large quantity for the same price or more than you'd pay in small quantity. This is especially true for things like cheese. Meanwhile, you're giving up the opportunity to get a superior product. In the cheese example, Costco stocks Belgioioso mozzarella, which to me is about store-brand quality. Popular because it doesn't taste like cheese. For a decent price, you can buy much better mozzarella which has some flavor. And you don't have to buy 3 lbs at a time.
Costco is seldom cheapest, but you can be confident that it will at least be competitive and they only sell quality products.
If you enjoy shopping around and comparing pricing, it's not the best option. But if you just want to buy a product and know you won't be ripped off, you can shop there and never have to think about it. That allows people who don't enjoy shopping to save a lot of time and mental energy.
Same here, on occasion, but I've found they typically make you whole when you get a dud.
Good example:
I bought two collapsible milk crates. They loaded all my groceries into them in the store.
When I got home and lifted the first crate out of the car, it had too much weight inside, the bottom fell out and two bottles of wine shattered.
I told them the story when returning the crate two weeks later, they waved me off when I said I had a pic, told me it wasn’t necessary, and refunded the wine without being prompted.
Trying to get wine refunded with most other retailer would probably require talking to a manager and making a scene.
I shop at Costco despite the prices, because I like their ethos of treating employees well and business model that makes me feel like they wouldn’t cut unnecessary corners on product quality.
Since this is an item I get regularly - it’s $9 for a 4-pack of Kerrygold butter at the Mountain View Costco ($2.25/
8oz bar). Same 8oz butter is almost double at Safeway or Whole Foods. The local Walmart is $2.83 per bar.
I have rarely found Costco items more expensive than other local stores, at least for my regular items.
I discount Trader Joe’s since they don’t carry branded items other than wine and beer.
I discount Trader Joe’s since they don’t carry branded items other than wine and beer.
They carry a variety of branded items including Kerrygold, Tilamook, Rouge et Noir (Bay Area cheese maker), those kringles, Spindrift, Columbus (lunchmeat), those organic herbs, and Tom's of Maine (hygiene). There's probably a few more.
Second on TJs butter. For quality to value ratio of most foods, TJs blows Costso out of the water imo, and you don't have to buy cheese in 3 lb blocks.
> Organic chicken stock is cheaper at Whole Foods.
If you buy Better than Bouillon at Costco, you can get a pound of the stuff for about $6, which is double the quantity that you find at most other grocery stores.
I stopped buying liquid stock after I found that stuff, because it's so much cheaper.
That stuff is way too salty though with a pretty thin flavor profile. You can at least find liquid stocks with no sodium so you can add a lot of flavor and then salt to taste. Even their reduced sodium version is too salty. Liquid no sodium stocks still aren’t awesome either but I think it’s better overall than the Better than Boulion options.
I've been getting a lot of stuff at Home Depot and Lowe's recently, and finding that they each have different products for everything, and which one is obviously better/cheaper varies on an extremely granular level - not just a manufacturer or product type, but an individual product. It's gotten really frustrating that every time I want three or four things I have to go to both or I will regret my choices.
I believe this is a general phenomenon and I read years ago about someone studying it in grocery stores. I'm not sure to what extent it is emergent vs. rationally thought out, but direct competitors tend to evolve to give you just enough good options to get you in the store, and as many bad deals as you are likely to go with just because you are in the store. Being uniformly better is not necessary to compete and therefore suboptimal.
It depends on the Costcos, Walmarts, and Whole Foods in your area.
In LA, Costco isn't always the cheapest on a per-unit basis, but they're always the cheapest on a per weight/per ounce basis.
For example, Kerrygold butter is $5 at the Ralphs, and the same size container is $8 at the nearest Whole Foods. It's $16 at Costco...but for 4x the amount of butter, making it cheaper than both Ralphs and Whole Foods if you can actually use all that butter. (There are no nearby Walmarts, and neither of the local Targets or Food4Less' sell Kerrygold.)
So given a choice of shopping at Costco who pays the highest wages and benefits vs. Walmart who has the lowest wages and benefits, I will pay that small extra for the butter.
It’s not that bulk. Chips come in bigger bags - use a clip. Bread comes two loaves, freeze one. It’s very rare I see something but it’s an unusable quantity for a family of four.
Now that said, when I lived in a tiny apartment getting 36 rolls of toilet paper at once was annoying, but I made it work.
The trick is letting it warm up to room temperature slowly to let the moisture it lost from freezing return. I mostly just toast my bread and I honestly can't tell a difference between thawed and fresh bread.
Most things are OK to buy in bulk from Costco or elsewhere: flour, rice and other grains (quinoa, lentils), oil, cheese, toilet paper and paper towels, potatoes and onions, frozen veggies and other frozen foods, coffee beans, tea, yeast and other baking ingredients. Eggs are good for at least 2 weeks after their sell-by date and even without that, it's easy to get through 2 dozen eggs in 3 weeks. Dry pet food, treats, and regular pet medication (e.g. heartworm, flea protection) don't expire before they are used and far cheaper than elsewhere. Beer is good for months, wine and liquor for years.
Large families (4+ people) can easily get through Costco sized bread, milk, cereal, snacks, fruit, meat and veggies before it goes bad.
For a single or 2 person household, pretty much the only things from Costco that it doesn't make sense to buy are fresh produce, meat, and seafood, and bread.
Like another person pointed out, a vacuum sealer and a freezer are your best friend with Costco meat. For a family of 5 it makes buying quality meat a bargain. 1 or 2 days in the fridge to thaw and you can’t even tell it was frozen, especially with steaks.
I agree. Which items are cheaper than competitors are really hit and miss. Some of Costco's have higher quality, though. I think that Aldi sells singles cheap by stocking cases with 1-3 stockers keeping the whole store up proves Costco could've done that. They should try doing it Aldi-like with higher-quality brands.
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.
Be very careful buying things you ingest on Amazon. The risk is high of fake products from otherwise trustworthy brands or "fake" brands of some guy ordering something to be packaged at a dodgy Chinese manufacturer with little or no QA or basic verification.
Let's be real. Under no circumstance should you be ingesting anything you buy on Amazon. It's going to take a baby formula scandal like what happened in China before the general public wakes up the problem.
Amazon has their Essentials brand for vitamins which is apparently legit. I think brand name foods and drinks are probably OK since they are hard to counterfeit and if you did get a counterfeit I am sure the brand would be very interested in Amazon's role in it. Vitamins though and any kind of spice should be suspect... I think this is why they started Essentials. Costco also does product quality tests so buying stuff there should be ok. I'd be interested in lead testing Tumeric from Costco, Amazon, Whole foods etc... that's been a big thing recently. We also know Kona coffee is not legit for instance even at Costco.
When you get counterfeit electronics, you can usually tell right away. The packaging is off, misprinted, often has a Chinese name in small print on it somewhere. The product looks fine from a distance but up close, the mold alignment is off, it's too light, it feels cheap.
More often than not you roll your eyes and use it anyway, because most of the time it works well enough, for a while at least.
Branded food is a lot less likely to get a pass on any of those. We have a strong sense of what it's supposed to look like, smell like, taste like, feel like; we might put up with less from a clearly marked store-brand copy, but a name brand that doesn't taste like it should sets off alarm bells. And exactly reproducing a commercial food product is hard.
That's very much not true. I've received many fake items - where if I didn't already own the product AND box and could compare side by side, I'd never know.
Even then, until it doesn't work right, you wouldn't know.
There are some _very_ good looking counterfeits on amazon.
Look at how they mix stock under the same SKU and see if you’re still confident perhaps that Peet’s coffee came from Peet’s or perhaps a third party seller used counterfeit — Amazon’s will put hem into the same punnet and pull out one where it’s from amazon or “fulfilled by amazon”.
Right now I’ve only seen it in electronics but I don’t buy much food that way. Amazon fresh is a different thing (all sourced / sold by amazon) so probably not a problem. Likewise oddball stuff (a low volume brand of tea) is unlikely to be worth counterfeiting. But mass market goods definitely are and the baby food example, while not amazon, is an excellent cautionary tale.
I gave up on Amazon once I wasn't able to buy the replaceable toothbrush heads for my electric toothbrush. Try ordering the name brand oral-b ones and see what shows up (in my case, cheap Chinese knockoffs that lasted about a week instead of however many weeks they're supposed to).
I honestly miss being able to go to a unique store to buy things - that way you could look at what you were actually buying and (maybe!) find something better for what you're trying to do.
Downvote walrus01 all you want but I’ve never met a person in real life who eats Soylent. If it weren’t for HN or Reddit I’ve never even know it existed.
They must exist. I can buy Soylent off the shelf at my local Fred Meyer (Kroger for people who don't have Fred Meyer in their area). They are pretty aggressive about dropping products that don't sell in sufficient quantity.
Amazon sells lots of food items that are sold by Amazon.com. You have to use discretion, but there is nothing wrong with buying multi-vitamins, probiotics and supplements on Amazon. However, it is probably a good idea to not buy them from a third-party seller.
> Amazon sells lots of food items that are sold by Amazon.com.
“Sold by Amazon.com” is not safe, because of potential commingling with stock identified as the same SKU from Fulfilled by Amazon sellers. If you know of a reliable non-FBA third-party seller, that's the safest thing
At least in its SoCal warehouses, Amazon does not commingle its own inventory with FBA sellers for product liability reasons. It maintains separate internal warehousing SKUs for FBA inventory stockpiles.
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.
Yes, the electronics/appliance selection, when one needs it, can be slightly lacking. Costco appears to reduce costs by often stocking exactly one option for a given thing. E.g., I'm in the market for a toaster as my old one died (a 2012 basic 2-slot model, $20 at Costco). My local Costco now seems to only have an upscale 4-slot model for $50. I'm considering my options and living a toaster-free life at the moment, but even two options would be nice.
It's hard to beat the prices on bulk foods, though, which keeps me going back (and I like voting-with-dollars for well-run, customer-friendly stores). Perhaps it's just the bulk-commodities mindset from the food aisles leaking over into electronics that causes the above.
This is true. In fact Costco frequently stocks models of electronics that are exclusively sold through them. For example, many TVs you buy there are slight variations of popular models that only Costco sells. They even have distinct model numbers that you'll have a hard time finding info about on Google. The manufacturer makes up costs by defeaturing the TVs. Frequently they reduce the number of ports or withhold smart TV features. This is actually great for me because I seldom want all the bells and whistles. I'd like as much money spent as possible to go to size and quality of the display.
Since the Smart TV shit started, I've moved to just buying large PC monitors and using them with my PC. (It helps that I'm a cable cutter. There's nothing interesting on TV that's not streaming somewhere.)
I do not understand this. Buy the TV as it is bigger and cheaper. Just do not configure the WiFi and do not plug the Ethernet in. I have 2 Samsung’s that are set at just out of the box with no internet.
Some smart TVs will find an open AP if you don't otherwise configure them for internet access, hence the swing to dumb TVs and monitors for people who want to guarantee no logging of their viewing habits.
At some point I realized I did not even want to use the TV apps and did not care to maintain the PC with Kodi on it. I just switched to an AppleTV for everything and paid for MrMC (Kodi port for AppleTV that supports SMB/NFS mounting). So much simpler.
My experience is that the Costco exclusive models of many electronic products are not feature reduced but are identical to the non Costco versions except bundled with accessories or services not included with the non Costco versions.
For example Ring security systems and cameras sold at Costco usually include additional sensors or things such as additional Ring chimes plus a free year of service.
Back in the day, I haven't bought one in years and can't speak to the current situation, printers sold at Costco almost always had unique model numbers because Costco insisted printer manufacturers include USB cables and full ink or toner cartridges instead of starter ones. So if HP sold a model 420 everywhere else they would sell a model 425 at Costco which included the cable and full ink cartridges but the printer itself was identical to the 420 sold elsewhere.
A couple of years ago I bought an electronic keyboard for my daughter. It had a different model number than the keyboard normally has but the keyboard itself is the same feature wise as sold other places but it came bundled with a stand and a couple of other accessories which would have been extra elsewhere.
But often it's not. You can find threads on AV forums comparing Costco only models to their common models. Though maybe this has changed a bit as I haven't shopped for a TV for a few years.
They don't always remove features. Really it's more about making the comparison between the products just fuzzy enough that the other retailers can't give the manufacturers a hard time for offering Costco a cheaper deal. And in some cases just trying not to devalue their brand elsewhere.
Costco doesn't sell the same Dyson vacuum as everywhere else -- instead of a "Total" they sell an "Absolute" or some other equally confusing nonsense.
The difference is they remove a single (non-motorized/cheap) attachment, and throw in two different ones and a couple other accoutrements. And sell it for $100 less.
The part that's not included in their package can be purchased retail from Dyson for less than $100.
Other retailers can't use this to put pressure on Dyson. Dyson doesn't look like they're overcharging everywhere else.
Wow -- the engineering cleverness is actually really incredible (using heat expansion of the nichrome wire to automatically lower the bread! fully mechanical closed-loop monitoring of bread surface temperature!). Tempting.
Yes, I'm not advocating someone to try a homeopathic recipe for cancer. However, there are times when supplements can be beneficial and you can find actual reports in the NCBI and legitimate references and supporting information on Wikipedia.
Multivitamins and probiotics are things that can help supplement nutrients and help with digestion for people that may not be getting enough in their daily meals. Some people choose to be Vegan, and it is nice when you can find options sold by Amazon that don't have a bunch of fillers in their supplements or meat products.
I recently had some issues and found that an organic garlic supplement and apple cider vinegar concentrate helped me feel better. Would I still go to the doctor in case of a medical emergency? Absolutely! However, there are a lot of great herbs and extracts out there that provide benefits to a persons health. As always, do your own research and know the risk.
However, there are times when supplements can be beneficial and you can find actual reports in the NCBI and legitimate references and supporting information on Wikipedia.
Parent is not busting the chops of Whole Foods for carrying vitamins and supplements that arguably have some minor benefit for a subset of the population. No, parent is busting their chops for carrying magic water that, AFAICT, has zero supporting evidence.
In the worst case, at least your garlic supplement has garlic in it.
I agree, Amazon just seems to be getting worse, with dodgy Chinese brands, counterfeit stuff, and fake reviews.
Costco is a no-brainer and food is top-notch.
I had a different problem the last time I wanted to buy something from Amazon.
I knew what I wanted, so I didn't care about search. In fact, the item was only available on Amazon.
But the seller looked sketchy, so I had to convince myself to buy it from them on Amazon. After looking some more to see if there was anywhere else to buy, including on the manufacturer website, I resigned myself to buy it.
But then the total price started increasing while I was trying to check out, so I went away mad.
As far as reviews, I believe I have a reasonably foolproof system. I simply look at the worst reviews and see what kind of theme they have. If that is a clear pattern that is a design flaw, then I expect that is a warning I should pay attention to. Good reviews are basically irrelevant except if they describe the product to some extent. Unfortunately, with many consumer product categories on Amazon, I give up because all of the items have dealbreakers in the bad reviews, and sometimes it seems the products may not really be meaningfully different.
You must mean decent French cheese at a reasonable price? All the big depa-chika have cheese stands with cheeses from all over the world. Seijo Ishii seems to have some selection as well?
I'd expect 4x+ and wouldn't care about paying. I live in Japan, local stuff is cheap, ingredients for local dishes are cheap. Ingredients for foreign dishes are expensive. That seems like it would be the same everywhere.
Living in the Seattle area, I like not having to drive out to Costco weekly or even monthly and can have a mostly car free life using amazon to provide what we can’t get from the QFC or Safeway down the street.
Of course, if our family ever gets another kid, doing the Costco thing might be unavoidable.
> For me, the value they provide is curation of selection and filtering for quality
Yes, this is huge. They have pretty good buyers in many of their product categories. And while Costco does not always have the lowest price, they often do for many items. And, as you said, you have the benefit of usually being able to rely on them for having picked a set of products that more than "good enough" (and sometimes the best in their categories, too) so you don't have waste tons of time shopping around, reading reviews, and so forth.
I agree with most of what you've said except for low prices. There are a few things that are good deals but lots of food products actually cost more than at my local grocery store. Particularly meat.
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.
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.
I can't tell if Safeway has gotten worse or if I've just been shopping at the expensive organic place for too long.
I can go buy produce from Safeway on a Sunday, and have it be molding by Wednesday. And not even stuff that goes bad quickly (like, peaches mid summer are amazing but they're very fresh/ripe and will go bad in a few days). Apples. Potatoes. Onions. Things that, when fresh, last for months if kept in a cool dark place.
You aren't hallucinating, the quality of Safeway produce is and is increasingly shit. Last time I was in one, they had a pile of moldy ginger, and I have no idea how they managed it.
I spent a bit of time earlier trying to figure out who owned what in Seattle earlier. What I got out of it:
* QFC/Fred Meyer are owned by Kroger
* Safeway/Albertsons are owned by a capital management company (Cerberus)
* PCC, Red Apple, Town and Country, and Metro Market are local.
* UNFI owns SuperValu, which is the main distributor for Whole Foods / IGA / possibly some others in the 'local' list.
The depressing part of this: most of grocery stores in the area are owned by 3 companies. And they've all turned into a complete garbage race to the bottom "what's the minimum quality we can sell and still consider food".
I have a Vons, they became pretty similar to sister brand Safeway in the past decade. It's definitely worse produce now.
Organic used to be things with more damage from insects and such, and have a shorter shelf life. Now it's food that costs more, so it has higher quality.
Oh my gosh, I was in my local Fry's last week, and the store was in such bad shape.
It was mid-afternoon on a Saturday, and there were only a dozen cars in the parking lot. So I thought that was strange right off the bat.
We go in, and so many shelves were empty. I wanted to get a new PC power supply, and they had hardly any stock.
We went to a Microcenter later, and it was still a going concern. Chatted with a sales guy who actually seemed to know the products. I think it is the last decent computer store in the area.
>Oh my gosh, I was in my local Fry's last week, and the store was in such bad shape.
The one in Las Vegas has been going downhill for a while, but the last six months were really staggering. Last August I got a good deal on a Garmin dash cam there. Saturday I was in looking for some other stuff and passed by that section and they didn't have one dash cam anywhere. Not even one! In one isle of car stereo components I guess one enterprising employee had spread out single bags of the same components up and down the isle to fill it in, but the general state of the store was beyond pathetic. There were only Samsung TV's and monitors in the store - no other brand (probably because Samsung is paying them).
Oh how the mighty have fallen. Sadly Vegas doesn't have a Microcenter. There are a few local stores like outletpc.com - but those guys aren't open on the weekend.
Man, I wish I had a crappy Fry's in my area, all I have is Best Buy, and they overprice everything and don't care a good selection. I miss living near Fry's. I miss being able to want X and have it in the same day and also have a place where I can do a swap in the same day without dealing with postage.
I've been trying to limit how much I buy on Amazon because I don't want to worry about getting something different than I ordered (among other reasons), or have to worry about getting counterfeit stuff. So I'm basically down to Newegg, and while they're fairly prompt, I don't buy enough to make Premier worth it, so I don't have 2-day shipping, which makes it even less convenient.
I'm really quite sad that these stores seem to be going away.
No, no you don't. I noticed the same thing a few months ago and did a search then. I found this thread which I bookmarked. So this isn't a new phenomenon any more:
My experience with the store in Wilsonville Oregon matches those comments. QFT here:
The Wilsonville, Oregon store hasn't had stock for over 6 months. Even longer for desktops and laptops. Last month I visited and there were whole aisles empty. ENTIRE AISLES. This is no "remodel" or "change in inventory system". They're on their last legs.
OMG, I'm glad I mentioned Fry's. Maybe I'll stop by my local store one last time before it goes to the Great Mall in the Sky. From the comments listed there, it looks like my local store is already running out of things to sell.
Given the customer service at the returns counter, that was already my approach. Compare the experience at Costco, which someone probably mentioned in this thread.
I disagree about the meat. Publix has much better quality chicken and pork, especially their Greenwise brand. Costco chicken is freakishly big, even compared to Tyson or Purdue at Kroger. I used to find weird spots on the chicken breast and thighs I haven’t seen elsewhere. The chicken is tougher as well.
The wild seafood is great. Choice Beef is the same as anywhere and I have no complaints. Prime beef is a great option but I rarely buy it.
Costco actually struggles to purchase small chickens, which it uses for its $4.99 rotisserie.
According to this article published last week, it’s opening a $450M poultry complex in Nebraska because suppliers aren’t providing enough small chickens.
We rarely buy chicken at Costco for just that reason. Chicken at our local grocery store is comparable quality and it's frequently on sale (loss leader perhaps?).
Publix is a southeastern U.S. exclusive. I pity all the smug Bay Area folk who will never get to experience how wonderful this little grocery chain is.
> 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."
As someone who worked retail for several years...
The cash register is literally the worst time and place to get help finding something. I often end up having to wait and hold up the line while waiting for someone on the floor to bring a product up, and god help us all if they grabbed the wrong thing and need to go back, holding up my line even more.
The cash register had the ability to suspend a transaction so I could start ringing up someone else while we waited, but doing so required a manager override, which involved a manager putting their key into the register and typing in their PIN code.
If you need help finding something, find someone on the floor. If you can't find someone on the floor, ask a cashier to find someone. But starting to check out and then asking for help finding something makes your cashier want to cry.
If it's that much of a pain, why do the clerks always specifically ask if I found everything I need? Why not something more generic like "how was your shopping experience today?" or similar?
Because the managers that create the policies requiring clerks to ask the question have either never worked as a clerk or have forgotten what it's like.
One life hack tip I got was that if you really like a pair of shoes (e.g. a daily driver), then you should always buy two pairs and alternate wearing them.
I am not sure if I understand your first sentence. Regarding the second, no, they encourage wearing out shoes quickly and repurchasing often or purchasing many pairs. Two pairs purchased to alternate is something done to maximize longevity, so in the long run it is cheaper than buying one pair and wearing it daily. It is in a shoe repair shop’s interest, though, and that’s where I first heard the tip.
I misunderstood the original comment. The person was posting a strategy to keep shoes from wearing out too quickly. So you're right, my comment does not make sense, sorry.
Yes, shoe companies generally want people to wear out their shoes quickly to sell more shoes, and they also change up the models offered so that when a serious runner sees their shoe is no longer going to be offered, they buy up as many as possible.
I understand what you’re saying about changing lines/models now and I do agree this happens. I experienced this recently when attempting to replace some 2017 Merells. Even Walmart does it with their cheap yard shoes, I suspect.
seriously now, the gas is at least 30 cents cheaper than anything around, I love the prime beef, organic chicken, cheese, eggs, mushrooms, macadamia nuts, vitamins and paper towels - it's top quality. on top of that stack the food court and the rotisserie chicken, travel + tires and the insane credit card benefits and you've got yourself a customer for life.
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.
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.
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
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.
This analysis is a little bit weird and I don’t think quite tells the whole story. I remember digging into their 10K a while ago and the big takeaway was that a good Costco store will do somewhere around a billion dollars in revenue per year. Their merchandise profit is low, but I don’t think zero - I believe I calculated it at somewhere between half a percent and a percent on average. But again, that’s on a billion dollars per store.
Membership fees also aren’t pure profit - there’s some overhead with them and other member services at a net negative that lower it below 100%.
> Fun fact about Costco. More than 100% of its profits come from membership fees.
The backing analysis for this claim has none of Costco’s costs associated with membership, such that membership fees were pure profit. Yes, it's membership fees acocunt for revenue that is more than 100% of it's profit. It's merchandise sales account for revenue that is more than 100% of it's profit by a vastly wider margin, though.
The actual share of profits due to membership fees is a much more complicated question, but it's certainly not the full amount that treating it's membership fees as pure profit would suggest.
That is really interesting. Seems crazy, especially given that a lot of people use Executive with added benefits with $0 extra cost (essentially, via reimbursement). I typically get a check each year that more than covers the total membership costs.
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.
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.
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.
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.
The point is - I didn't "ask" anybody to upgrade, this was pushed harder than a time share.
How about I rephrase: "I felt lied to and taken advantage of, and I decided not to bother being a customer any longer, given that I shopped there very infrequently and despise high pressure sales tactics."
In the end, this is about my personal customer experience, which I've subjectively decided sucked enough to outweigh the utility I got from Costco membership. I can't stand pushy salespeople, and I basically argued with the cashier for several minutes telling him that I didn't want to upgrade. I said no at least five or six times.
I should have just stuck to my position, but after I was told that there was literally no way to lose money even if I never took any action to get a refund, I caved because I wanted to go home.
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.
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.
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.
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.
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.
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!
> 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.
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.
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.
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.
Sounds like an erroneous analysis to me. The cost of a $60 membership pales in comparison to the cost of the space needed to store bulk items, especially refrigerated, and the cost of travel to and from a Costco, which are not located in the poorest areas.
Most importantly, $60 cash upfront for a membership fee is nothing compared to all the cash you need to buy bulk items upfront. Is selling bulk items a way to keep "riff-raff" out?
>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.
That'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.
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.
Yes, 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.
You 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.
> 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.
>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.
This 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.
Poor people are the people that have to drive everywhere, so I don't think location has much to do with it.
Costco in Ventura County has two stores: the one in the rich area in Simi Valley, and the one in a (relatively speaking) poor area in Oxnard. The Simi store is half empty, while the Oxnard store has one of the highest sales in the entire chain.
I actually don't know if the $60 keeps anyone out. I think it's just pure profit, and an inducement for customers to return so they "get what they pay for." People are terrible at thinking about sunk costs, you know.
> Poor people are the people that have to drive everywhere
I don’t know what this means. I assume that’s a regional difference.
I live in an area where there are a lot of people who have to walk or rely on an incredibly unreliable and slow bus system. They’re not going to make a trip 5+ miles to the nearest Costco, especially since they’d have to walk half a mile to/from the bus stop and try to manage those bulk goods along the way.
Not to mention the fact that our bus system is mostly hub and spoke, so the bus trip would take 2-3 hours each way.
Sorry, SoCalian here. Everyone has a car. If you’re rich you can afford to live close to your job. If you’re poor you have to drive to work over an hour each way. If you’re homeless you live in your car. Buses exist, but no one knows where they came from or why they exist.
(Please don’t argue exceptions, I’m being reductionist on purpose)
The exceptions are only rare if you're not poor! Car ownership is near 100% among affluent people, but drops to around 50% in the lowest income quintile. Which is why the LA bus system that "nobody" rides has 800,000 daily riders.
My experience is that even with the most awful transit system it is possible to make group trips with multiple families together with one card using one person's car. Even in a city with no transit at all surely you can find someone once a month willing to drive in exchange for free access to the lower prices on stuff, it's just common sense. Now Costco versus other options is hard to say, but their prices on certain things are hard to beat.
> I don’t know what this means. I assume that’s a regional difference.
The rest of your post describes a region where I would expect that statement to be particularly true. Does everyone live conveniently near their work, or are your low-income jobs forgiving of your incredibly unreliable and slow bus system? Either of those would stand out more as a regional difference.
>selling bulk items a way to keep "riff-raff" out?
It depends, but in many areas with extreme poverty and drug use there are businesses that break apart packages and sell single items, even when it is a violation of the law, such as single cigarettes
They weren't riff-raff, but one of my neighbors who was on a tight budget couldn't afford to shop there because buying in bulk meant laying out a lot of cash at once. They were convinced they wanted to buy bulk staples and save, so the went rice and beans for a month so they could save up for a Costco trip. They claim they save quite a bit buying at Costco, but those bulk prices can indeed be a hurdle.
Also, the vast majority of retail shrinkage is employee theft; if CostCo has a big advantage there, it's it's better-paid employees, more than higher-income customers.
>Also, the vast majority of retail shrinkage is employee theft;
I did a cursory google on this and of the 5 random sources I looked at, they said the majority of shrinkage is customer shoplifting. Did you come across something reputable that concluded differently?
I dunno about majority internal vs shoplifting but I saw a Kroger internal report once that ~2% revenues lost annually to “loss”. It was not broken down by category, but it was the preface to a 4 hour presentation on employee loss prevention techniques, so I’m connecting dots...
Remembering my chats with loss prevention at Walmart while I worked there: by volume customers are the worst overall, but employee theft are the worst per person. Thus catching one employee thief represents several thousand in losses. Meanwhile customer theft is dealt with in a more bulk-like fashion.
Left unchecked employee theft can scale. Think of a cashier skimming cash, or customer service person colluding with a friend to return junk. Both customer and employee theft require stoppage, but employees are tough because they are trusted by default.
This sounds like BS unless you have numbers. Shopping at Costco is like riding the NYC subway - it's a cross section of society from all income levels.
Costco saves people hundreds to thousands of dollars a year both in time and price. Shopping there isn't exactly a luxury experience.
I'd guess the fact you need to enter with a photo ID and they keep records on everyone entering/leaving with their names and addresses attached is a much bigger factor at loss prevention.
It's also uncited. There are a few other articles that say the same thing (or more accurately, paraphrasing "the average customer at costco has a yearly income of $100k") and none of them are cited either.
I skimmed some investor documents/earnings call transcripts and couldn't find much discussion of what members are like from Costco themselves, just third parties.
I'm just a bit skeptical of that factoid. It smells funny.
Regardless of your threshold for reliability, I would be much more interested in anything that demonstrates your claim that Costco is "a cross section of society from all income levels".
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.
When I was working in retail during college, they made it very clear that most shrinkage actually comes from employees and not shoppers. Employees with bags were searched by loss prevention on their way out of the store, and we were required to use a separate entrance/exit than shoppers.
True, for this family of 4. We buy the big pack of Scott toilet paper, and store it amongst 4 bathrooms; same for tissues, both 2x a year. Paper towels in the garage, along with detergent and bleach. Bulk meat in a small deep freeze. A $6 bag of garlic lasts for months, but just toss it even if it’s only 1/2 used, as that would buy you 6 bulbs at the normal grocer.
Typical modern American house has at least 3 bathrooms: downstairs, upstairs master bedroom for parents, upstairs shared for kids. Downstairs ”in-law” room with private bathroom or washer/dryer closet with toilet gives you fourth.
Which is frustrating in places the Bay Area. Even if you can afford and benefit from Costco and buying in bulk, it's not easy to find space to store a single trip's worth of stuff in the tiny homes out here.
Low income families won't pay anything extra to shop at stores like Costco, BJ's, etc, nevermind $60, which seems high. I imagine they can't afford to buy in bulk, to begin with.
If they qualify, they ought to get the Costco credit card (there are lower credit limits available). I typically make a $250+ profit each year, even after paying $120 for the executive membership.
I usually split some purchases with friends, like the Kirkland microwave popcorn. It will go bad before I can eat it all, but split it 3 or 4 ways, and it's not wasted.
Sam’s Club has similar clientele to Walmart and more shrinkage issues (I spend time regularly in all three stores.) The Costco difference is about the types of products that are sold, the locations, the brand, and the quality/wage of the employees, not the membership fee.
I know. And I wouldn't drop 11% of my paycheck in a single month on a yearlong membership to anything.
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”
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.
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.
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.
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.
This is actually a great idea. I know there has to be a better way than lining up people and having usually a single receipt checker looking through people's carts and drawing a line down their receipt.
I don't know why it isn't already in place. Once you go through cashiers and pay, you should be ready to leave, nip it in the bud and design the building exits for that purpose.
The Costco shopping experience is atrocious. Huge lines, people running over you with giant carts, completely unmarked aisles and you have to run around trying to find an employee to ask where something is. And then there is the checkout gauntlet where a funnel of grumpy people has receipts checked by just one or two checkers.
The low prices and in some cases availability of certain products is the only reason I go.
What city are you in? That is absolutely nothing at all like anything I’ve ever experienced in any of the Costco’s I’ve ever been to! That sounds terrible! Honestly you should send them an email a lot this, especially getting run over by carts.
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.
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?
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.
So, if I put membership fees under operating revenue, and then factor out their liquor store as special revenue, I could say they make a huge amount of their profit from liquor sales, and say Costco is just a big liquor store that sells food, merchandise and memberships for fun. That doesn't make much accounting sense.
This is technically true, but sort of misses the mark. Costco does not price goods such that their Cost of Goods Sold + Operating Expenses = their Membership Fees + Non Alcohol Gross Revenue, Alcohol Gross Revenue to be their main source of profit. They do price goods such that their COGS + OPEX = Gross Revenue, leaving their membership fees to be the main source of profit.
In other words, you can say that any given vertical worth $Xbn of their revenue was their profit, if you are convinced that Costco actually models their pricing around that vertical section of their revenue. But in reality, everyone knows that the section they model around is membership fees - everything else is break even and the fees are profit.
No, Costco is accounting for it normally by putting membership fees up there with gross revenue. I'm saying the gee-whiz description of memberships being 75% or more of profit is silly. The firm has gross margins on its sales. It also collects membership fees. Any one of its product lines could be a large portion of revenue that you could single out as being the driver of their profit. I just think it's silly to single it out like that. Gross margin pays for the stores to be open just as much as anything else, and with less margin the stores could be out of business despite collecting all those membership fees.
> According to the article, Costco's average mark up is 11%. So they make $99.10 profit on my $1000 of spending.
No, they are selling to you for $1000 something that they bought for $900. But they still have to pay all their operating costs.
Their revenue in FY 2019 was $149.4bn (+ $3.4bn in membership fees) and the cost of merchandise was $132.bn. Their gross margin is 11% but then you have $15bn in "Selling, General and Administrative" expenses.
Costco performs a credit check when you sign up for a membership. It requires a state ID to sign up for a membership. Like voter ID requirements, this has impacts on the people who shop there. Previously, they also tied the membership to qualifying for their partnered credit card. It is true that you can pay with cash. Ultimately, I'm trying to explain why Costco shoppers look the way they do. It may affect the bottom line to put up these obstacles, because people who meet these criteria can and do spend more.
Walmart only relies ownership of a car to target a richer shopper. Whole Foods and Trader Joe’s, often used for single people or non car owners, locates its stores nonetheless in certain wealthier urban locations. Loyalty cards do not achieve these ends.
The knock on effects are immense. Grocery stores, for normal people, are as much about the discounts as seeing your own kind there. That’s not just economic stratification, it’s also the ethnic groceries, some of them really big, expensive item enterprises (like H Mart).
These are experiences Amazon cannot provide. You don’t get to see the other Amazon shoppers, and you don’t get a sense of whether Amazon is a “cheap” or “expensive” store. And yet this is precisely an experience people want, just as psychologically important as 1 day shipping. Costco, like Amazon, occupies a valuable psychological niche. The question is if there exist any viable retail that does not.
I’m not sure what you’re talking about. A Costco membership is $60 and you can pay in cash. There’s no credit card needed. You don’t have to sign up for their credit card either, and it’s not really even pushed when you sign up for membership. What gave you the impression that you have to qualify for a credit card to shop there?
Until 2016, Costco and Amex had an exclusive partnership. You could pay either in cash or with Amex, usually the Costco Amex tied to your membership card.
Now they take any Visa card, and have converted Costco Amex cards to Costco Citi VISA cards.
Before they accepted American Express they only accepted debit and cash. I remember having the American Express card and being excited that I could finally get cash back on Costco purchases and have a credit card vaguely backed by a company I trust.
>Costco controls the kind of shopper that shows up by tying a credit card (ie a credit check) to membership. Sure you don’t have to pay with a credit card, but you need to qualify for a good one to shop there.
I don't follow this logic at all. They take Amex and debit cards in the UK - so no Mastercard/Visa credit cards but debits are fine. They also take cash.
So, why do you need to be able to qualify for an Amex (the only CC they accept) to shop there? Everyone has a debit card. They're not doing a credit check when you sign up as a member - they don't extend you a line of credit when you shop in their stores as a consumer.
Some California Costco’s have outdoor food courts. You can also enter through the standard entrance and tell them you are going to the food court or membership counter. At that point no membership is required to get food.
The membership counter/food court and exit are all next to each other at most Costco’s.
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.
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.
> 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).
> Regular gas stations rarely have a line of people waiting for a pump.
I can understand the rareness part, but some gas stations are known for being discounters, but I still haven't seen them use it, despite their traffic jams.
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).
I'd say that's relatively cheap for a hobby, and much easier to find than I imagined. I thought they were $300-$600 since the last time I saw one it was fully mechanical, at a school, and as far as I could see it was the only one.
Maybe this is a New Jersey thing, but here you don't need to be a Costco member to buy gasoline at Costco stations. It's also not that good of a deal, at maybe 10-15 cents less than regular gas stations. Sometimes it's just not worth braving the gas queues just for $1.5 in savings.
I guess it depends a lot on the products you need to buy from them. As for gasoline, I live in an area where it's about the cheapest in the country, so Costco's prices don't improve much on that, maybe $1.50 per fill-up. I don't drive enough for that to matter, but I suppose that alone could still cover the cost of membership each year.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
"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!
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.
> 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.
> 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.
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.
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.
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.
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.
It appears the origin of the idea was in a non-profit consumer organization called 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"
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.
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! :-) )
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.
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.)
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.
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.
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.
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.
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?
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.
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.
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?
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.
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.
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?
I always thought of costco as the suburban lifestyle store. Where everything is costco sized for american sized suburban houses for american sized families.
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.
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.
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.
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.
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.
And bigger packages have less packaging material per volume.
While bigger packages could have thicker packaging, that's not always true: packaging that protects from the outside world won't be any different. A foil layer is a foil layer.
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.
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.
But you have to consider the packaging that you don't see at other retailers: it might come to them in the same packaging, but it's discarded before you see it.
That is a good point that may offset to some extent. From the glimpses I've had of grocery store stocking - especially when it comes to produce - I think Costco is still more packaging-per-volume for the things I buy. Costco also still has an additional third layer of boxing for most items between the sellable packaging and the pallet. For example the boxes of tomatoes I mentioned are additionally housed in a 6-unit box and it's those boxes that are stacked on the pallets. I supposed the final outcome depends on what one buys - processed/frozen food probably has a better packaging efficiency at Costco.
- Buy a ton of small items, each with their own wasteful packaging? I buy 10lb bags of frozen chicken at Costco, and it has far less packaging than buying individual units. Same with peanut butter. Vegetables. Oil.
- Spend two hours a week hopping back and forth to grocery stores? What if I want to make 1-2 runs to Costco per month so I can cook food in bulk?
- Carefully hunt for which items at the grocery store are on sale, and which are heavily marked up? At Costco I am guaranteed that the price is at least competitive. I don't have to figure out whether the grocery-store vanilla bottle is competitive, or 3x wholesale price.
I mean, if you have time to spend, feel free to hop around speciality grocery stores 3 times a week, but I personally have no interest in that. I have better things to do. So maybe tone down the snobbery and acknowledge that other people have other priorities.
> At Costco I am guaranteed that the price is at least competitive.
Right, you know that Costco is taking making a 10% margin across the board. You'll never be able to exploit a loss-leader and fill your cart with below-cost X, but you're never getting overly hosed either.
If you're a well-to-do immigrant that hasn't built up a mind-map of "Buy A at X, buy B at Y, and only buy C when on-sale at Z", Costco is a low-cognitive load solution.
Not to mention: avoiding waste. Ever had a ton of stuff you bought for a dollar less than the price and ended up throwing out half the stuff ? Me, too.
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.