President Obama visited a Costco in Maryland yesterday to shake hands with people and do whatever else Presidents do when they visit the suburbs and stop traffic. On a related note, Harriet Edleson from US News & World Report spoke recently with a number of Costco members, company executives and retail analysts to get the inside story on what attracts 72 million members and results in $103 billion in annual sales. And she didn’t disrupt traffic at all!
Harriet came up with “seven things you should know.”
- If you want brand names for less, you’ll find them at Costco.
- When you go abroad, you can still shop.
- Quality at the lowest price means value. (Costco’s typical markup is 10%, compared to 20% or 30% at other food retailers.)
- If you buy an item by mistake, you can bring it back for a cash refund.
- Kirkland is made for Costco. (Twenty percent of all items in a Costco warehouse are sold under the Kirkland name.)
- Food is key.
- Hot dog and soda is a winning combination. (Costco sells 109 million hot dog and soda combinations per year at $1.50.)
For the complete story, click here.
An added note – about a year ago I watched a CNBC special on Costco, and the key fact that stuck with me was that the company generally breaks even on everything it sells, which leaves the membership fee as pure profit. That’s 72 million members paying anywhere from $55 to $110!