Fingers holding a Costco receipt and membership card
The Way Costco Is Able To Keep Its Prices Lower Than Most Other Retailers
One of the main draws of Costco is that it sells bulk items that are more cost-efficient than purchases from other grocery stores. The chain has always prioritized low costs.
Costco keeps its prices low because it orders items in bulk for cheaper, in the same way that it sells those items in bulk for cheaper. Costcos also keep a smaller inventory.
An average Costco store displays about 4,000 different products for sale at any given time, while other grocery stores may sell up to 30,000 items per store.
Less items lead to less costs overall. Costco also never marks up an item more than 15%, while grocery and department stores will mark up items from 25% to a whopping 50%.
Costco makes up for its cheap prices in membership fees for almost 119 million members. A Gold Star membership costs $60 a year, while an Executive membership is $120.