Monday, October 29, 2007

Costco

When it comes to my preference for where to spend my hard-earned money on consumer goods, it is absolutely no contest. I have bought everything from toilet paper to an LCD television there and I rarely, if ever, have a problem with one of their products, or a bad experience in one of their stores. Costco has the lowest prices on a wide range of quality goods of any retail establishment that I am aware of. Often I compare their prices to other chains such as Sears, Wal-Mart, Future Shop, and even recently Target and it's usually not even close. 

I think that Costco must employ the best 'procurement managers' or buyers in the industry, as the products they stock their towering shelves with are always second to none in brand, quality, and price. Everything from their coffee beans to their garden hoses are the best quality at reasonable prices. Their private label brand, Kirkland Signature, offers some exceptional value on several goods like bottled water, baby wipes, and even dog food among many other products. Costco frequently sells books for much less than the publishers price. I can't think of really any product category where they do not offer the best products at the lowest prices.

Costco is truly a best of both worlds retailer. Their return policy is seamless, their cashiers are very friendly, and you can buy a pair of Buffalo jeans for $30. Two years ago I bought a pair of sports sandals, a pair of leather sandals and a pair of running shoes at Costco all for under $30 each, and they're all still in tact. I am slightly embarrassed to say that last year my wife and I did our entire Christmas shopping there. Everyone seemed to love their gifts, and most people received two. No, nobody received the 3 kg mayonnaise from us.

Maybe it is the smell of the samples on Saturdays, or the 2kg jar tub of peanut butter, or the glow of the warehouse-type lights but I just adore the place...Some interesting facts about Costco:

The CEO, Jeffrey Brotman earns $645,000 per year as his base salary. He also answers his own phone.
I've heard that the cashiers make over $40,000 per year with benefits.
You can buy a hot dog and a bottomless pop there for $1.99. Pretty good hot dog too...
You can buy 35 bottles of Kirkland water for $4.39. That works out to less than $0.13 per bottle.
You can get your passport photo done for about $6 and fill your BBQ propane tank for $11.
Their net profit margins are under 2%......no wonder....


Costco did not pay me to write this review, but if they did I would have taken payment in the form of raw Lilydale chicken

15 comments:

MillionDollarJourney said...

I'm with you MG, I love Costco too. There's something about that store that makes it a pleasure to shop and buy stuff there. I think it might be the free samples. :)

nancy (aka money coach and Costco Freak) said...

ok, I'm ashamed to admit it, but perhaps present company will understand: i've been known from time to time just to go enjoy the samples and browse, even though I don't purchase anything on that particular trip.

MillionDollarJourney said...

LOL @ Nancy. I find it so funny b/c my wife and I have been known to do the same thing.

MG said...

that's awsome...they're getting you in there...

mariam said...

There was an old NY Times article about how Costco became the anti-Walmart. The whole attitude of Sinegal and the employees was just infectious. There's something to be said for treating people right...

telly said...

We just hit Costco last night.

Maybe it's just me but I find we spend way too much money when we go there.

OTOH, they do have great fresh salmon that even tastes good after you freeze it. That alone is worth the price of a memebership. :)

MG said...

I've often heard it referred to as the '$100 STORE'. It's true you do spend more money when you shop there, but the products you buy are better quality, and most importantly they last longer.

TKO from Ontario said...

COSTCO rules over Walmart!

Better service,
Better deals,
Better cars in the parking lot.
Shoppers more polite/less rude.

Is it all good though?

Size of Ass/Rate of Obesity:
1. COSTCO
2. Walmart
3. Real Canadian Superstore/Loblaws

Anonymous said...

Costco rarely has the best prices. They have a good price/quality ratio, but I can get cheaper baby wipes at Walmart, cheaper (and better) TVs at Future Shop, better computer equipment pretty well anywhere else, yadda yadda.

I'll give them props for some of their food offerings.

Sure, I like them, but a lot of their success comes from an image, rather than cruel, hard, facts.

Middle Class Millionaire said...

I’d have to agree with the last poster. I can usually get items cheaper elsewhere. However, I know that my opinion is certainly the minority and I’m also considered an anomaly among my friends because I don’t shop at Costco. I do think that Costco has by far the best deals on BRAND NAME items…but I don’t buy brand name and can usually get none-brand name items cheaper elsewhere. I also have a problem with having to pay to become a “Club Member” it’s not a club...it’s a store. That being said people LOVE COSTCO and as an investor I’d love to add them to my portfolio in the future but just can’t bite given their high valuation.

nate said...

Just to clear one fact up Jeffrey Brotman is co founder and chairman of the board. Jim Sinegal is the founder, president and CEO whose salary is 350,000 plus 80,000 bonus plus additional options.

nate said...

Just to clear one fact up Jeffrey Brotman is co founder and chairman of the board. Jim Sinegal is the founder, president and CEO whose salary is 350,000 plus 80,000 bonus plus additional options.

MG said...

Thanks nate, my mistake...

Mary Popins said...

I think your blog is great. I have learned about the company on the www.pissedconsumer.com. Costco is the nationwide retail chain. It includes online applications and benefit information. The company specializes in selling products at low prices and high volume. Target customers of the company are large families and businesses. Costco is world's leading membership warehouse club chain. Personally I did not yet happen to deal with a company.

David said...

Oh yeah and Costco's CEO is actually Jim Sinegal he is the president and founder as well getting paid $430,000 plus a additional $200,000,000 in stock. And $80,000 dollars on top of all of that. But in light of that must CEOS get paid double everything I just put :) he is a awesome CEO and a great founder! COMMENT "YES" IF YOU LIKE JIM SINEGAL!