Last Updated on 12/06/2021 by てんしょく飯
An expert explains why we buy too much at Costco.
An expert explains why you buy too much at Costco.
If you are a member of Costco, you can get all kinds of products such as food, electronics, clothes, etc. at reasonable prices. Costco is no longer just a large supermarket, but is now loved by many people as a kind of “theme park” where food and drinks such as hot dogs and pizza are sold at very low prices.
Humphrey Young, a financial expert and TikToker, explains why people tend to buy too much when they go to Costco. Humphrey points out the following three points.
One of the best parts of shopping at Costco is the tasting area. In fact, one Costco store reported an astonishing 600% increase in frozen pizza purchases thanks to tastings. In fact, many people may have fallen into this trap.
Annual Membership Fee
To shop at Costco in Japan, the annual membership fee is 4,840 yen for regular membership and 9,900 yen for executive membership. It is natural to want to get the most out of your expensive membership fee. In the meantime, the “I have to buy something” mentality kicks in, and we often end up going to the store even when we don’t have anything special to buy, or picking up things we don’t need, or spending money unnecessarily. According to Humphrey, the profit margin on products sold at Costco is only 10 to 15 percent, and membership fees account for about 90 percent of Costco’s profits.
As soon as you enter the store, you will find large electronics such as televisions, and expensive items such as brand name products and jewelry, but this placement is all calculated. By placing expensive items at the front of the store, other items look cheaper, and customers think they are saving money just by not buying those expensive items, which makes them spend more money.
Also, Costco is known to lose more money than it makes on its rotisserie chicken, but the company keeps the price of the chicken low and places it at the back of the store to attract customers to buy other products with higher profit margins, thus making more profit. It is true that the rotisserie chicken is sold in the back of the store, but I didn’t know there was such a secret.