After much consideration, We finally got our Costco membership. Much of it has to do with the fact that we were already buying consumables like toilet paper and detergent through my sister who is a dedicated Costco customer. But some of it because, well, let’s be real, Costco is a fun trip (until you go for check-out).
Costco is a perfect place to lose self-control for a person like me, who has very little of it. Free samples, Roof high pallets of goods and keeping necessities at the back of the warehouse, are all the ingredients needed for the recipe of ‘impulse purchase’. In addition, they have many tricks up their sleeves to provide a good shopping experience to the customers and keep them coming for more.
Products
From frozen vegetables to jewellery, milk to mattresses, and toilet paper to books, Costco has everything. I have not even counted gas, pharmacy, and travel services yet. Along with these solo services which are exclusively under Costco’s umbrella, it also has partnerships with other companies like Manulife for insurance, Bell and Rogers for cell phone plans, and some car companies to provide its members with some seasonal discounts. In other words, It is a one-stop shop.
Business model
Costco’s business model is entirely based on the memberships it offers. In order to buy low-cost wholesale products, members pay a yearly fee to go and make purchases in the warehouse. Costco holds limited, high-quality brand products as compared to a regular grocery store where there are numerous brands to choose from. Thus, encouraging the shopper to make easy choices. Apart from this, they save customers a lot of time and inconvenience with easy return policies.
Membership dilemma
There are 2 types of memberships, Gold and Executive membership. As of 2022, gold membership is worth $60/year and an executive membership is $120 per year(Canada). While choosing Costco membership, you will be allured towards exclusive membership. But there are a few things to consider before choosing between the memberships:
- What is your family size?
There is a minimum amount that should be spent at Costco to earn the rewards through Executive membership. For example, Costco demands us to spend at least $250 per month to earn $60 in rewards. However, gold membership has no such condition
In my experience, if you are a family of 2-3, your best deal is a gold membership(personally for me too). The reason is that I like only a few of their products(non-perishable), which are worth $100 each month, hence I cannot meet their minimum spending limit. Another way is to buy through gift cards. You can request a friend to get it for you, but its downside is that you have to depend on someone else.
On the other hand, If you are a family of 4 or above, Executive membership will work for you. You can buy perishable items in bulk too. Hence, increasing the bill to the required amount to earn those rewards.
Tip to follow: Do not forget to check the 2% reward exclusions list before signing up for that executive membership. As money spent on some of the services does not contribute towards rewards. Last time I checked, you do not get any rewards on the gas money or the membership money!
2. How often do you go to the store?
If you see yourself going to the store only once every 2 months, sticking with the Gold membership is a good idea. As I mentioned earlier, members are supposed to spend a minimum amount in the store every month to receive a minimum reward amount. Otherwise, you need to spend more in order to get more rewards.
3. Can you share with a friend?
If you are a small family but still want to go with the executive membership, ask another family to join you. It is not possible officially but you can divide the expenses and share the rewards together. This way you do not have to worry about paying more or missing out on those rewards and exclusive deals.
4. Will you be making big purchases in the upcoming year?
If you are planning to spend a large amount on Costco products like Jewellery, electronics, home improvement products, it might be a good idea to get the exclusive membership.
Are Costco products cheaper?
When all is said and done, it really boils down to 1 fact; Do you save any money? In my opinion, you save a few cents on regular deals(as you are buying in bulk), but more in their saving offers in-store. The difference per product can be as much as $5. The trick here is to make a list before going to the store and sticking to it. Another commodity that saves you bucks is Costco gasoline. Long lines in front of the gas station can be a deal-breaker, but it is a good deal if you are saving a few bucks.
I do not want to rule out the fact that everyone’s budget, product choices and capacity to buy in bulk are different. It would be a good idea to have a look at your budget and figure out where can you save. For example: Maybe you are spending way too much on gas every month and can reduce the spending by simply buying from Costco gas station. In our case, that is one of the reasons we finally got the membership!
P.S: This article is based on my own experience and information is given on costco.ca. I am happy to hear other suggestions from readers as to which are their favourite products and what are the ways to save more.