I really don’t understand it but Costco seems to be one of those businesses that people either love or love to hate. I see hit pieces in the mainstream media all the time (oddly enough, the Reader’s Digest, in particular, seems to run one almost daily); although maybe they’re just trolling for clicks. But how could anyone hate a company that sells mostly high quality products for low to medium quality prices, puts service second to none, and treats its employees as well as any retailer on the planet in the process? I don’t see it. But today I’m going to tell you how this wonderful company has made my life better and saved me money at the same time to give you a better idea of whether it can help you too. And yes, I might be slightly biased, but no, I’m not selling anything or benefiting in any direct way from anyone deciding to shop at Costco.
Costco’s business model is pretty straightforward. Most of the profit margin comes from selling annual memberships and credit card sign ups. In other words, everything in the stores is sold at very close to cost. This results in some amazing deals. Of course, no store is perfect. There are items I don’t buy at Costco – mostly because as a one man household, I can’t consume them fast enough to buy them in bulk without wasting them. But there are still plenty of opportunities for the $60 annual membership to pay me back many times over.
I could write pages and pages about all the great deals. Clothes at Costco can be a steal and are usually high quality. For example, I’ve bought khaki pants for under $20 that are every bit as good as pairs I’ve paid triple for elsewhere. There are usually plenty of quality casual clothing options offered at very competitive prices. Decent quality athletic shoes are often $20-30, less than half of what you often pay at a shoe store. Athletic clothes are usually a comparative bargain as well. Two important tips are that Costco doesn’t have fitting rooms and inventory changes quickly. However, the antidote is the amazing return policy. If you see something you like, buy any sizes, colors, styles, etc, that you think might work for you. Try it all on in the comfort of your home and return what you don’t want. You want to buy anything that’s a possibility for you because it will probably be gone by the next time you visit. It’s not an ideal system but it works and it is worth dealing with for the awesome price/quality combination.
There is also a huge variety of other non-food bargains in the store. As a general rule, Costco won’t have everything but it will have a good option or two for a bigger variety of products than you might expect – kitchen stuff, tools/automotive/garage stuff, furniture, athletic equipment, Vitamix blenders (the best money can buy), paper products, prescriptions and other pharmacy related items, and the list goes on and on. You still have to use your head like with anything else but most of this stuff is going to be high quality and a lot of it at a better price than you can find almost anywhere else. Occasionally you will see some idiot write an article about how Costco is more expensive than Walmart. That’s like saying Cadillacs are more expensive than whatever automotive travesty Chevy replaces the Cruze with in its never ending quest to bore economy car buyers to death. In other words, these people are either trolls or they have the IQ of potatoes. Either way, their argument is way too stupid to be taken seriously.
Then you get into the food area. I’m a beer and wine guy myself and while the beer selection is middling at best, the wine selection is pretty extensive. As usual, the prices and quality in both categories are very competitive and I understand the liquor offerings are similar. I actually skip most of the produce (again, one man household) except for the organic spinach/kale/other substances that taste more or less like grass clippings, which I consume at a prodigious rate, after my blender has done its little trick of course. Some of my other favorite food items are: $5 rotisserie chickens, a variety of cheeses (shredded, block, and sliced), greek yogurt, eggs, a variety of good quality frozen items for when I’m in a hurry, tortillas, coffee, spices, and I could go on and on. The deli and bakery both offer great options if you’re looking for something to bring to some sort of group event and don’t want to be that person who brings yet another depressing casserole, only to bring most of it home and have to suffer through it anyway (those people have it coming by the way, trying to foist that crap on other people and then enjoy the good food someone else brought). And believe me, if I’m buying these items, you’re not likely to find a better deal elsewhere because I’ve looked. I could easily justify the membership buying just a few of them over the course of the year.
Costco tends to be about the cheapest around on gas and offers solid deals on tires. That said, due to their limited brand selection, I don’t buy them. I’m a Discount Tire man and if you’re anywhere where they have locations, you’d do well to give them a shot as well. Costco also sells cars although for someone like me who knows the ins and outs of the dealer game better than many of the car salesmen I enjoy playing it with, they are not a good deal. They also sell vacations, appliances, random stuff for houses, etc, none of which I’ve ever bought from them, and electronics, which I have. The electronics deals tend to be about as good as anything you will find but with the bonus of their additional warranty and amazing return policy. I don’t think they have Black Friday deals so much as just seasonal deals, but as a guy who bought a tv from them around that time, I can tell you mine was a phenomenal deal.
Nothing is perfect and Costco is no exception. But it offers products, service, and pricing that add up to an incredibly good overall value. It is definitely a cut above Sam’s Club in at least two of those three areas and light years ahead in my favorite area of all, which I’ve saved to highlight last. I think this is probably the most overlooked positive factor about Costco. At Costco, the average retail employee makes about $40k a year. Obviously no one is getting rich off of that but when compared to the $10 an hour or so that most retail employees make on a “work when it’s good for us” schedule (also relevant since Costco has reasonable hours of operation), that is amazing. You can see it on the employee’s faces. They are happy to be there because they are treated with at least a basic level of respect by their employer – something that is not nearly common enough. Their being happy makes me happy, and not just because it results in better service. I’m as big a capitalist as they come but I believe money can be made while also making the world a better place. I believe it is very important to support things I want to see more of by “voting with my dollar” and I am proud to do that with Costco. The fact that I get a great, consistent value and a great customer experience in the process is just icing on the cake.