Industry Insights

What’s a Club Store?

Club stores- the big ones are BJ’s Wholesale Club, Sam’s Club and Costco Wholesale. This type of store, known as a “warehouse” has a different vibe than a grocery store. In fact, According to Entrepreneur, the markup at a typical retail store is around 50%. In other words, the price you pay is twice what the store paid.

By contrast, warehouse stores charge a much lower markup. For instance, Costco’s markup is only 14% to 15%, according to Forbes. They make up for the lost profits by charging a fixed yearly fee to each customer. 

What’s so great about it?

Pros

• Low prices (on certain items)
• Access to services (car buying, vacations)
• High Quality store brands
• One-stop shopping
• Free samples
• Great return policy

Cons

• Membership Fee
• Oversized packages/too much stuff
• Limited selection
• Impulse buys
• Restrictions on coupons
• Deals that aren’t so great (know your prices!)

A few tips:

-Stick to your list. With much more to offer than everyday groceries, the excitement of discounted items for yourself, family or household can quickly add up resulting in a much larger bill than expected therefore- stick to your list! Moreover, the thrill of a deal could even have you buying more than you need. For example- in a grocery store you may have a $1-$5 impulse purchase but in club you are looking at more like $10-100!

-Don’t overbuy. If you are buying something that doesn’t have a shelf life, then there is no issue. But when it comes to food- be realistic! Are you going to finish it before it spoils?

Best items to buy:

• Food (rotisserie chicken and steaks)
• Luggage
• Gas (almost always the cheapest in town)
• Tires (wait for a deal)
• Baby stuff (diapers/infant formula)
• Toilet paper
• Dog and cat food
• Alcohol (you don’t need a membership to buy booze)
• Random things we buy – Christmas trees, peanut butter, detergent, discounted gift cards

Is being a member a good fit for you? You can always try!