Your Money. Personal Finance. Your Practice. Popular Courses. Key Takeaways Costco has a business model that depends heavily on repeat shoppers buying and renewing memberships. By selling memberships, Costco can sell products at deep discounts that barely cover costs. Still, membership revenue continues to grow and contributes a significant portion of Costco's bottom line. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles. Budgeting Big Box Stores vs. Small Retailers. Partner Links. Related Terms Big-Box Retailer Definition A big-box store is a retail store that occupies a large amount of space and offers customers a variety of products. How Brick-and-Mortar Stores Are Performing and Adapting The term "brick-and-mortar" refers to a traditional business that offers its products and services to its customers in an office or store, as opposed to an online-only business.
How Does Cash Back Work? Many updates are simply for the protection of staff and customers alike. Face masks are mandatory for adults, and those who are exempt from wearing face masks because of medical conditions are required to wear a face shield.
Social distancing measures are in place, and there are limits on the quantities of certain products that you can purchase. There are some other rules in place that — depending on how and when you shop — might make you think twice about a membership. If your work schedule restricts your shopping hours, you should know that Costco has implemented Special Operating Hours on weekdays in many of its locations.
That's typically between 9 and 10 a. During those hours, only members 60 years or older — or those who are immunocompromised, or are disabled — will be allowed into the store. No guests will be allowed to accompany them, and in some locations, that means only one person per card will be allowed into the store.
There are also special measures in place for first responders and healthcare workers: with proper ID, they will be given priority access to the store. Except in Massachusetts, where state regulations forbid these workers from shopping during senior-only hours. If you've spotted a few good deals on the Costco website and you're wondering if a membership is worth it, here's the deal.
Anyone can shop online at Costco. When you check out, you'll be charged a five percent surcharge, in addition to any shipping fees that you might accumulate via Costco Customer Service. Also, when Business Insider did some comparison shopping, they found that the prices listed on the website were as much as 20 percent higher than in-store prices. The idea, they say, is that it's likely an attempt to get people to head to the store and shop in person, where they're more likely to be tempted by impulse buys.
So, what's the bottom line? If you're under that number — and only shop there online — then the membership fee isn't worth it. Getting a membership at Costco to buy in bulk might seem like a no-brainer. You get more, and even if the up-front cost is more, you're going to save money in the long run, right?
Maybe not. Some seemingly safe bulk buys will actually go bad way faster than you might think, so if you're eyeing a Costco membership for the bulk deals, you might want to assess what you're really going to be buying. MoneyCrashers says that brown rice, for example, only has a shelf life of six months. Even oatmeal only lasts for about a year, while those bags of seeds and nuts you're stockpiling for down-the-road baking projects should be used within six months of their expiration date, too.
Other products that have a shorter shelf life? Olive oil, all-purpose flour, and most spices via The Balance. But what about things you're not going to eat? Household cleaning products, detergents, soaps, and skincare products are great bulk buys, right? Not so fast. Researchers have found that when it comes to cleaning products, they only keep their oomph for a maximum of a year. And those skincare products? The longer they sit around, the more likely they are to become contaminated with bacteria that you're then introducing to your skin.
Opened containers should be used within the year, and that sheds a whole new light on whether or not that giant tub of skin cream is worth it. Every household has its unique habits, and for some, that means a reliance on name brands.
We all know that person who has to have Starbucks coffee, who swears Duracell batteries last longer than any other kind, or who believes that the only real tuna fish sandwich is the one made with Bumble Bee tuna. If your love of name brands is making you think twice about a Costco membership, you should know that you might not have to worry. Sure, you'll be going to Costco and stocking up on Kirkland products, but you should know that not only does Costco take the quality of their products very seriously, but some of them might be the exact same thing you get under brand name labels.
That Kirkland brand coffee? Read the small print, and you'll see that it boasts "Custom roasted by Starbucks. Finance says that their batteries are actually made by Duracell, and their tuna? Yes, it's Bumble Bee. And those are just a few examples of the name brands that manufacture products for Costco.
Even if you can't find your favorite name brands hiding under another label, you should also know that Mashed found a ton of products — from olive oil and animal crackers to vodka — that Costco and Kirkland just does better. There's something satisfying about scoring a bargain, especially when it's on something you use all the time. And coupons? Somehow — in an age when many newspapers and magazines have gone completely digital — coupons are still a thing.
And it's kind of understandable: Shows like TLC's Extreme Couponing make it seem like anyone who's dedicated enough could get their shopping for free via Money Crashers. While not everyone goes to those extremes, those who love hunting down sales and clipping coupons for the thrill of savings might find Costco isn't a good fit for them. When Business Insider did some comparison shopping, they found that if you're already hunting for the best deals, buying what's on sale at regular grocery stores, and clipping coupons, you're probably not going to save any money with a Costco membership.
Break things down into their "per unit" cost, and you'll find that grocery store chains often have better deals on the stuff you buy all the time — especially if you wait to stock up when things go on sale. Factor in the added bonus of being able to buy smaller sizes that will stay fresh longer, and bargain-hunters will find they might want to skip getting that Costco membership.
Costco has such a cult following that at a glance, it might seem like getting a membership for a once-a-month trip could be an adventurous way to shake up your shopping habits. But according to Business Insider , finding out where the closest Costco is to your home — or work — goes a long way in telling you whether or not a membership is going to be worth it.
While there's drive time, gas, and wear on your car to consider, there's also the question of motivation. If there's not a Costco that's conveniently located for you, the chances of you taking time out of your busy schedule to go significantly decreases.
It sounds like it shouldn't be a big deal, but look at it this way: They say that Costco only has stores located in the US and Puerto Rico. Consider the fact that at the same time Walmart boasted 4,, and it's pretty clear which one might be more convenient. Let's put it this way: When is the last time you opted for getting up off the couch to put in a DVD over the convenience of just turning on Netflix? Choosing the more convenient shopping option works in pretty much the same way.
If you're thinking about a Costco membership, you should know that not all warehouse stores were created equal. The best one for you depends on your own individual needs, so doing some research is key.
What exactly do we mean? Of the 26 products they compared, BJ's was a clear winner in 18 of them, which suggests that if you're an online shopper, you might want to check out BJ's instead. Not only are they generally cheaper, but they also accept coupons — Costco doesn't. On the other hand, Investopedia says that when they compared Costco and Sam's Club, they found that Costco had a wider variety of store-brand products that were ultimately cheaper.
But, Sam's Club offered more choices when it came to name brands. However, recent store closures mean that people who once had easy access to a Sam's Club might not have one around the corner anymore. Bottom line?
Do some comparison shopping before you commit, and make sure you're going to make the most out of a membership. Others spoke out in support of the new policy. For you. World globe An icon of the world globe, indicating different international options.
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