Hacker News new | past | comments | ask | show | jobs | submit login

They sell generics, but I don't believe they actually make them.

Allow me to clarify: CostCo sells everything at a fixed profit margin (I believe it's around 18% but I could be mistaken). I have no idea where their generics come from, I doubt they manufacture themselves, so before the CostCo markup they are subject to the same inflated prices you'll find anywhere else before the pill reaches the drugstore or your doctor or whatever.

What I've been imagining, specifically, is generics manufacturer that applied a fixed profit margin — "cost plus" — to their products. I guess that's not precisely the CostCo model, but you get my drift now.




"CostCo sells everything at a fixed profit margin (I believe it's around 18% but I could be mistaken)."

You're mistaken no they don't.


You're right, it's not fixed. It caps at 14% for outside brands, 15% for "Kirkland" brands, but averages at 11% (2019). https://www.inc.com/jeff-haden/how-does-costco-compete-with-...

Contrast to markups of 25 to 50% for typical retail, and for generic drugs in the thousands. https://www.thepharmaletter.com/article/1-000-pharmacy-mark-...


That inc article is the only place I see those margin caps and it doesn't come sources. Other articles say that costco doesn't publish their margins.

However, their financial statements do indicate an 11% average gross markup.

But there are definitely plenty of products marked up more than 18% at Costco. Either that or they are paying way too much for some things.


Still waiting for the clarification. You nailed the denunciation, though.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: