I go there at least once a week at lunch to fill up the gas tank. The savings on the gas more than pays for the 1.65 hotdog plus drink.  I then get cash out of the cash machine because even though it is not my bank, they do not charge a fee so I save three dollars right there. So far I have spent no money at all (after the money I saved on gas), I’m actually walking out with more money that I walked in with. One of the favorite things I love is the moleskin notebooks. The letter sized ones sell for $19 for six of them. I’m basically paying the price of one notebook and getting five for free. I could go on like this with a dozen other regular items but you get the picture 
Do Costco’s lower margin really translate to lower prices? I switched to Sam’s years ago because they were cheaper. And now Sam’s has better tech: scan and go app or order in app and pick up. I hate shopping and I hate wandering in big warehouses. I just want to save money.
I think it would depend on the customer's basket of items -- Costco is not necessarily always the cheapest on every item since they don't do loss leaders. Sam's Club is a reportable segment in Wal-Mart's financials but doesn't have the level of detail provided by Costco and there are some shared corporate expenses between Wal-Mart's super centers and Sam's.
Seriously, build an excel spreadsheet with the items you want and what aisle they are on. I mark the boxes of what I want and then only go through each aisle once. Otherwise it's a wandering labyrinth.
Also, kirkland brand alcohol is another brand relabled. It's worth the price.
Ravi, nice introduction to Costco! The counter-intuitive notion of Costco is that it can not only keep margins way below the competition, but the low margins have the effect of cultivating trust that is reflected in the 90+% renewal rate. Costco operates on creating positive-sum member experience. The normal retail experience is more negative sum: watch out. With Costco you don’t have the nagging thought that someone is trying to pull a fast one on you: trying to sell you junk for something.
Now you should sign up for a Costco-Citi credit card. Your annual cash back will be multiples of the membership fee.
I've read that the maximum gross margin is around 14%. This makes it very interesting to observe what is likely to be the rock bottom wholesale price of branded consumer products (due to Costco's buying power). From that information, we can infer the markups of traditional retailers. I could probably spend an entire day walking around the store and looking at specific products in detail, but I'm not planning to take it to that level of detail. I was very impressed overall.
With the trust Costco aims to nurture, you will find price comparison is unnecessary, although l liked your examples—they confirmed my expectation. I did recently happen to check the price of a bag of granola we buy at Costco. We were out, so I went to Amazon. They had the item for the same price—but half the volume.
If Costco can purchase an item for an unusually low price, it passes the low price—with the standard markup— on to the member.
I go there at least once a week at lunch to fill up the gas tank. The savings on the gas more than pays for the 1.65 hotdog plus drink.  I then get cash out of the cash machine because even though it is not my bank, they do not charge a fee so I save three dollars right there. So far I have spent no money at all (after the money I saved on gas), I’m actually walking out with more money that I walked in with. One of the favorite things I love is the moleskin notebooks. The letter sized ones sell for $19 for six of them. I’m basically paying the price of one notebook and getting five for free. I could go on like this with a dozen other regular items but you get the picture 
Do Costco’s lower margin really translate to lower prices? I switched to Sam’s years ago because they were cheaper. And now Sam’s has better tech: scan and go app or order in app and pick up. I hate shopping and I hate wandering in big warehouses. I just want to save money.
I think it would depend on the customer's basket of items -- Costco is not necessarily always the cheapest on every item since they don't do loss leaders. Sam's Club is a reportable segment in Wal-Mart's financials but doesn't have the level of detail provided by Costco and there are some shared corporate expenses between Wal-Mart's super centers and Sam's.
Seriously, build an excel spreadsheet with the items you want and what aisle they are on. I mark the boxes of what I want and then only go through each aisle once. Otherwise it's a wandering labyrinth.
Also, kirkland brand alcohol is another brand relabled. It's worth the price.
I’ve read that they move things around quite a bit but hopefully not for the core grocery items.
For food items it rarely moves around. You'll start to notice a logic to their locations.
Yes. I'm an analytical person... :)
15 AA batteries
17 light bulb LED
20 engine oil 5w20 for 2009 SUV
22 downy softener
22 Tide Pods
24 dishwashing pods
25 ziplock large
25 ziplock small
25 tinfoil
25 kitchen can bags
26 Toilet paper
26 paper towels
26 Napkins
26 Dog and cat food
26 cat litter
31 chips, pita chips, potato, etc
ROWS FLIP AT 33
50.1 ground beef
50 chicken tenders, frozen
50 frozen salmon
49 Wontons
49 burrito
48 bacon
48 Pulp free OJ
47.1 sausage Chicken and apple
47.1 street taco
47 string cheese, low fat
46 bread
45 cheese
44.1 humus / pretzel kit snacks
44 Milk
44 coffee
44 Eggs
43 Peanut Butter
42 cereal honey nut cheerios
42 cereal Special K
40 extra virgin olive oil
39 chicken broth
38 Soy Sauce
38 mayonaisse
38 pace picante sauce
38 A1 steak sauce
37 spaghetti noodles
37 diced tomatoes
37 spaghetti sauce
36 Tuna Fish
35 corn, canned
35 peaches in jars
35 canned green beans
35 Apple sauce individual
33.9 toothpaste
33.2 berries blue, ras,
33.2 red grapes
33.2 asparagus
33.2 brocolli
33.1 bananas
33 Dove Soap
32.9 liquid soap
31.1 peanut butter pretzels
31 dental floss
30.1 pistachios
Ravi, nice introduction to Costco! The counter-intuitive notion of Costco is that it can not only keep margins way below the competition, but the low margins have the effect of cultivating trust that is reflected in the 90+% renewal rate. Costco operates on creating positive-sum member experience. The normal retail experience is more negative sum: watch out. With Costco you don’t have the nagging thought that someone is trying to pull a fast one on you: trying to sell you junk for something.
Now you should sign up for a Costco-Citi credit card. Your annual cash back will be multiples of the membership fee.
I've read that the maximum gross margin is around 14%. This makes it very interesting to observe what is likely to be the rock bottom wholesale price of branded consumer products (due to Costco's buying power). From that information, we can infer the markups of traditional retailers. I could probably spend an entire day walking around the store and looking at specific products in detail, but I'm not planning to take it to that level of detail. I was very impressed overall.
With the trust Costco aims to nurture, you will find price comparison is unnecessary, although l liked your examples—they confirmed my expectation. I did recently happen to check the price of a bag of granola we buy at Costco. We were out, so I went to Amazon. They had the item for the same price—but half the volume.
If Costco can purchase an item for an unusually low price, it passes the low price—with the standard markup— on to the member.
You will want to address the criticism that many Costco items-not Kirkland-are last year , overruns,
or in general, not top of the line merchandise. Hear this about eyewear in particular.
the clothing can be random and intermittent once you get beyond socks and such.
I rarely buy clothes there. I'm restocking the pantry for 2 teenagers. Can't afford to buy anything else ... :)
That's interesting. Haven't read much about overruns. They do over 12 inventory turns per year and seem quite good at inventory management.
I actually might go to their optical department soon. I need new glasses and was thinking that they might have good prices.
Can’t wait to read the full analysis