in your crummy warehouse. What a concept, make money on every product you sell and have "membership" money float down to the bottom-line like mana from heaven....unreal.
plenow, I suppose they all use that strategy now. In any event, I just this morning spoke with a neighbor who said the new Costco is MUCH better than Sam's so this afternoon I'll be going there prepared to become a member.
While I believe you will be much happier shopping at a Costco in terms of product selection, service, and cleanliness, you may become frustrated as Costco utilizes a "treasure hunt" merchandising strategy where they move product regularly so that you are exposed to other new products.
The membership fee serves other purposes:
1) It reduces theft. People who shoplift generally don't buy memberships to do it.
2) It increases customer loyalty and allows Costco to target a specific customer.
You may not like it as a customer and that is fine but you can't deny it is working for them.
Actually you are incorrect in your statement. Generally, Costco breaks even on the sale of merchandise. The membership income is essentially the net income of the company. You pay Costco this fee to mark your member pricing at the lowest possible. Whether or not it is worth it to you to shop there depends on what you buy and how much of it you purchase. Only you can figure that out. Generally, merchandise is priced with about a 10% markup, some more (apparel 15%. tobacco 1%) and some less. You can see that in the income statement too if you choose.
So when they pump that Executive Membership CRAP for a black plastic card & a $100 yearly fee.. then they conveniently EXCLUDE a lot of the items you buy from making up the alleged 2% return at they end of the year. And the alleged coupons they give only to 'executive members.
My wife tried that executive membership crap 1 year. We spent 10K in costco that year WE DID NOT get no 2% check & the coupons came in the mail one Month AFTER they expired.
Some good deal heh..