Costco vs. Amazon - Thoughts of Prime Members?

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DaftInvestor
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by DaftInvestor » Mon Jun 26, 2017 4:04 pm

hoops777 wrote:In November they had a proposition on the local ballot to allow Costco to open another store in a certain area.There are already 2 Costco's about 7 miles or so in opposite directions in adjoining cities.It was a war but Costco won.The oppossition was concerned it would harm the small town feel and create too much traffic.It was proposed in a shopping/commercial area next to the freeway so the argument was a bit weak.It was interesting to see the reactions.
Also...Costco is not anything like Sears other than the fact that they sell things.
I'm sure that this time it's different :)

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by flamesabers » Mon Jun 26, 2017 4:25 pm

I am an Amazon Prime member, but I don't have a membership with Costco or any other warehouse clubs. I'm single and I live in an apartment, so buying stuff in bulk isn't practical for me most of the time. The only items I buy in bulk is toilet paper and paper towels and I get these items from Amazon. Another consideration is I don't have a large car and I have to carry stuff about two flights of stairs. The convenience of two day shipping and getting stuff delivered right to my door is hard to beat I think. Unless I get a house and have a family to feed, I don't think shopping at warehouse clubs makes much sense for me.

Between the two companies, I think Amazon is able to reach a far wider variety of customers. You don't have to live close to an Amazon building to order stuff and being able to order online instead of having to wait in a check-out line is a huge convenience. During the holiday season it's a huge time-saver to be able to buy gifts straight from people's wish list instead of having to shop around and deal with the large crowds.
DaftInvestor wrote:I caught the 2006 movie "Idiocracy" last weekend whereby a couple of characters are frozen and emerge in the year 2505.
At one point they are in a Costco which seems to stretch on forever - and are headed for something like isle 5250 - about a "one-hour walk" they say.
I'd say this movie is as good of a stock-predictor for you as the responses from a handful of Bogleheads stating whether or not they will continue to shop there :)
I thought in the movie they had a shuttle system or something to get people around.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Mon Jun 26, 2017 4:32 pm

Daftinvestor you are comparing apples to oranges,so yes,it will be different. :)
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Tucker50 » Mon Jun 26, 2017 7:26 pm

If you have Costco + Prime, what could Amazon do to draw you away from Costco?
I have stock in both and am a member in each. Costco was the first stock I bought, has grown nicely, and pays me dividends. Amazon has done very well for me and I am a die-hard Amazon customer. It was the second stock I bought. I wouldn't sell either of my kids - yet. Amazon can't draw me away from Costco, but Costco might be able to draw me away from Amazon depending on how far Amazon goes toward world domination.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by cheesepep » Mon Jun 26, 2017 7:39 pm

Sam's member here. To me, Sam's and Costco are the same in just about everything I use. Amazon is nice, but I'll never shop there (or anywhere online) for groceries. That is what my ethnic grocer is for.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by miamivice » Tue Jun 27, 2017 3:41 am

At the moment, about the only thing in common between Amazon and Costco is the fact that they both have a membership fee. One (Costco) is mandatory and Amazon's is optional but you get a lot of benefits.

Costco is known for selling items in bulk quantities at low prices. Also known for selling high quality items at better prices than available elsewhere. Amazon is known for selling ordinary items and shipping them to your doorstep fast. In my opinion, these are two different markets. When I have price compared, I have found Amazon to be above Walmart / Target prices, but often purchase from Amazon to save a trip to the store.

My average basket at Costco is around $200 - $300. My average cart at Amazon is probably about $25.

I feel that young people without kids really like Amazon. I feel that the same young people will eventually become thirty-somethings with kids, and will start spending at warehouse stores.

I have no idea what the future of Amazon is now that they have acquired Whole Foods Market. But unless they plan to change WFM into warehouse style stores selling bulk quantities at discount prices, I'm not sure there is much to worry about.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by SeeMoe » Tue Jun 27, 2017 9:47 am

Never used COSTCO because we became jaded at SAM's Club having to buy stuff in bulk and then not using it. So, so quality products too. Conversely, we are big fans of AMAZON Prime! Easy to deal with and short wait time for the good stuff arriving via the postal services to include the latest models available. Bought 2 android 65" Sony TV sets at good prices recently. May look into grocery shopping also with AMAZON since they bought Whole Foods.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Tue Jun 27, 2017 10:51 am

miamivice wrote:At the moment, about the only thing in common between Amazon and Costco is the fact that they both have a membership fee. One (Costco) is mandatory and Amazon's is optional but you get a lot of benefits.

Costco is known for selling items in bulk quantities at low prices. Also known for selling high quality items at better prices than available elsewhere. Amazon is known for selling ordinary items and shipping them to your doorstep fast. In my opinion, these are two different markets. When I have price compared, I have found Amazon to be above Walmart / Target prices, but often purchase from Amazon to save a trip to the store.

My average basket at Costco is around $200 - $300. My average cart at Amazon is probably about $25.

I feel that young people without kids really like Amazon. I feel that the same young people will eventually become thirty-somethings with kids, and will start spending at warehouse stores.

I have no idea what the future of Amazon is now that they have acquired Whole Foods Market. But unless they plan to change WFM into warehouse style stores selling bulk quantities at discount prices, I'm not sure there is much to worry about.
Excellent summation.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Angelus359 » Tue Jun 27, 2017 10:55 am

WhiteMaxima wrote:Amazon, please deliver 20 Gal of gas to my house because I hate to wait at Costco gas line.
Get an electric :P
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Tue Jun 27, 2017 11:04 am

Angelus359 wrote:
WhiteMaxima wrote:Amazon, please deliver 20 Gal of gas to my house because I hate to wait at Costco gas line.
Get an electric :P
The electric will not help because it is too much effort to walk into the garage and plug it in right now.Maybe in 10 years when the technology might allow you to do it from your computer which is linked to a wireless charger :mrgreen:
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by NoVa Lurker » Tue Jun 27, 2017 11:41 am

miamivice wrote:I feel that young people without kids really like Amazon. I feel that the same young people will eventually become thirty-somethings with kids, and will start spending at warehouse stores.
There is a lot of truth in your post above, but I will say, as a forty-something with young kids, I hate going to the warehouse stores. It's such a luxury to click and have stuff delivered to our house, vs. dealing with the Costco/BJs/Sam's Club shopping experience. It's also easier to do shorter grocery stores trips, rather than $250 clusters. We had memberships to both Costco and BJs in the recent past, but we have let all memberships lapse.

We are still using 4 different grocery stores (Harris Teeter, Safeway, Trader Joe's, and Whole Foods), plus a bit of Target and Walmart. The last thing I want to do is add a 2-hour trip to Costco to the mix on the weekends.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by asherfitz » Tue Jun 27, 2017 3:24 pm

NoVa Lurker wrote:
miamivice wrote:I feel that young people without kids really like Amazon. I feel that the same young people will eventually become thirty-somethings with kids, and will start spending at warehouse stores.
There is a lot of truth in your post above, but I will say, as a forty-something with young kids, I hate going to the warehouse stores. It's such a luxury to click and have stuff delivered to our house, vs. dealing with the Costco/BJs/Sam's Club shopping experience. It's also easier to do shorter grocery stores trips, rather than $250 clusters. We had memberships to both Costco and BJs in the recent past, but we have let all memberships lapse.

We are still using 4 different grocery stores (Harris Teeter, Safeway, Trader Joe's, and Whole Foods), plus a bit of Target and Walmart. The last thing I want to do is add a 2-hour trip to Costco to the mix on the weekends.
Completely agree. I'm 30 (so I guess a millennial) with 2 kids and if anything, having kids has made me want to spend LESS time in warehouses or other big box stores buying stuff because I simply have less free time. It's also a pain to drag kids to a costco to pick up stuff when I can just click a few buttons while they're sleeping and keep my pantries replenished.

I'm willing to spend more for convenience or at least a more pleasurable shopping experience because I find more value in my free time and quality time with family (I don't think anyone would consider a trip to costco or target/walmart as "quality time" with the kids). I assume the market thinks (probably rightly so) that many other millennials share the same sentiment.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Tue Jun 27, 2017 4:57 pm

asherfitz wrote:
NoVa Lurker wrote:
miamivice wrote:I feel that young people without kids really like Amazon. I feel that the same young people will eventually become thirty-somethings with kids, and will start spending at warehouse stores.
There is a lot of truth in your post above, but I will say, as a forty-something with young kids, I hate going to the warehouse stores. It's such a luxury to click and have stuff delivered to our house, vs. dealing with the Costco/BJs/Sam's Club shopping experience. It's also easier to do shorter grocery stores trips, rather than $250 clusters. We had memberships to both Costco and BJs in the recent past, but we have let all memberships lapse.

We are still using 4 different grocery stores (Harris Teeter, Safeway, Trader Joe's, and Whole Foods), plus a bit of Target and Walmart. The last thing I want to do is add a 2-hour trip to Costco to the mix on the weekends.
Completely agree. I'm 30 (so I guess a millennial) with 2 kids and if anything, having kids has made me want to spend LESS time in warehouses or other big box stores buying stuff because I simply have less free time. It's also a pain to drag kids to a costco to pick up stuff when I can just click a few buttons while they're sleeping and keep my pantries replenished.

I'm willing to spend more for convenience or at least a more pleasurable shopping experience because I find more value in my free time and quality time with family (I don't think anyone would consider a trip to costco or target/walmart as "quality time" with the kids). I assume the market thinks (probably rightly so) that many other millennials share the same sentiment.
In terms of what the market thinks Costco and it's stock has done quite well.
It is amazing that all the millennials somehow overcame a childhood of having to go out shopping with their parents.I am finding it more and more interesting that with all the unbelievable technology that we have today,instant communication,online everything,technological advancements to make our lives easier,super advanced computers in our pockets,that nobody has time to do anything.Kind of ironic.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by modernvalue » Sun Jul 02, 2017 11:21 am

It seems most of these posts compare only grocery purchases. Remember that both Costco and Amazon sell stuff, too. Amazon offers a near infinite variety of products with free shipping, easy returns, an efficient website, and available customer reviews and recommendations. Among this framework of market domination, Costco still finds several customers of stuff. As an avid Costco shopper, I can easily recognize Costco purchases at the homes of friends and family as well as local businesses. This stuff comes in the shape of furniture, electronics, golf clubs, cooking supplies, etc. This stuff is almost always quality and long lasting, and is easily returned with no hassle when it is not. What made these folks buy from Costco?

Costco products basically mirror a very small sliver of what is already available online on Amazon. Amazon provides the products with more confidence by allowing you to research the product while shopping and will bring your purchases all the way to your front door; however, Costco still prospers internally in this stuff category. So when Costco soon mirrors the grocery product line up that will similarly be provided through Amazon and Whole Foods, Costco will continue to maintain their sliver.

Costco's moat has been the ability to remain unchanged. Now all those advantages that any other store may have over Costco are each available for Costco itself to adopt. Other stores have done the research for Costco into what new services bring in more and better customers. All the while Costco has maintained its customer base with quality vetted products, unique customer services, and cheap gas. Yes Amazon now has a number of warehouses closer to customers to facilitate faster and fresher shipping. But Costco already has this advantage. When Costco finds that their part of the market requests such service, they can easily provide it with little capital cost. When Costco finds that their customer base requests any service that any other store provides, Costco can peer into already available research and choose to provide proven successful services. There is little capital cost in allowing customers to scan products with and check out on their phone. Costco, at little cost, can easily revert to providing cheaper quality foods instead of stocking primarily niche and luxury foods. Costco can even increase the rotisserie chicken price. It is apparent that Costco has deep margins of safety. Costco's choices seem to reflect their wish to maintain a respectable customer base.

I can guarantee that most Costco customers pass a Walmart on the way to their bulk buying adventure. These people do not just want to buy things, they want to buy things at Costco. There is a reason for that and, if it has to be explained, you probably won't understand. I will gladly buy stock in Costco at what I believe is a temporarily depressed price. For if its decline is primarily due to the Whole Foods purchase, and if the decline continues, I have bigger problems to worry about. Online fresh food shopping is a signal of further addiction as mentioned by hoops777 and pushes all of us closer to the hopefully-not-inevitable future portrayed in the poignant documentary Idiocracy.

Let's not forget that Costco's and Whole Foods’ stocks are not necessarily closely correlated, that Costco's employees are some of the happiest and best paid people on the planet, that the CEO told American Express to shove it in the interest of his customers and that he would personally sacrifice to help his employees. In his 1990 Letter to Shareholders, Warren Buffet outlined what he found made a number of Berkshire Hathaway's subsidiaries so successful: a family forward mentality with low operating costs that maintains merchandising power. These characteristics led to people driving hours away from similar stores to shop at Nebraska Furniture Mart and charged the success of 263 response letters from customers to prevent closure of a See's Candy facing rent hikes. Costco shares these symptoms of success.

I shop Costco because it is different. It's traditional and we get along. There are a number of people that feel the same.
Last edited by modernvalue on Sun Jul 02, 2017 11:38 am, edited 1 time in total.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by LadyGeek » Sun Jul 02, 2017 11:30 am

modernvalue wrote:...I shop Costco because it is different. It's traditional and we get along. There are a number of people that feel the same.
modernvalue, Welcome! I should point out that your link is to a 2012 post.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Stormbringer » Sun Jul 02, 2017 12:11 pm

We have both Costco and Amazon Prime memberships. To me they are very, very different.

Costco sells a comparatively small number of items. They are great for loading up on bulky staples, cleaning supplies, beverages, or feeding several carloads of relatives visiting for the holidays. The treasure hunt is always interesting, you never know what you'll find. I like that they tend to carry higher quality merchandise than other warehouses. The auto buyer service is worth the cost of membership to me. I find buying a new car every few years to be akin to getting a root canal, and our local Lexus dealer participates.

Amazon sells an enormous number of things. No matter how obscure or specialized the item, there is a good chance I will find it in every size and color. For many items they now have same day delivery where I live, which is amazing. Somehow they even strong-armed the US Postal Service into delivering on Sunday. The ease of purchasing something from them is unparalleled.

I think the Internet in general, but Amazon in particular is going to decimate brick and mortar retail. This is evident with the sad, slow-moving failure of companies like Sears (the Amazon of a bygone era) and many local retailers. However, I think the Costco model will continue to survive and thrive.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by watchnerd » Sun Jul 02, 2017 12:38 pm

finite_difference wrote:In the old days, a milkman would drop off fresh milk at your house. Then the milkman disappeared and everyone had to buy milk at the grocery store. In the near future we will be able to have all our groceries dropped off at our house. We've come full circle.
That's not the future, that's now.

Amazon Fresh (which I use regularly) does exactly that.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by scotthal » Mon Jul 03, 2017 7:53 pm

I'm equidistant from my nearest Costco & Whole Foods storefronts; both are between me & the library ... my Amazon Prime membership gives me fast shipping, a lot of choice (items often not carried by Costco), & a 3% bump in cashback awards. Savings at Costco easily cover the membership fee - I save $3 every time I fill the gas tank, $8 every time I buy a 5lb bag of frozen blueberries, $6 on a 3lb bag of walnuts. Doubt that I'd drop either membership.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by bloom2708 » Mon Jul 03, 2017 8:09 pm

When I go to Costco and buy Toilet Paper, Bottled Water, Paper Towels, 3 gallons of milk...I don't see any way that Amazon.com by itself can replace that. No way to ship.

We do not have a Whole Foods in our area, so no ability to comment on the acquisition.

We also have both Costco Executive and Amazon Prime memberships. Our purchases don't overlap that much. I did buy a laptop at Costco a couple years back.

Seems to be plenty of space for both.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by watchnerd » Mon Jul 03, 2017 8:33 pm

bloom2708 wrote:When I go to Costco and buy Toilet Paper, Bottled Water, Paper Towels, 3 gallons of milk...I don't see any way that Amazon.com by itself can replace that. No way to ship.
Sorry, but that's not correct.

I get toilet paper, bottled water, paper towels shipped to my house from 'normal' Amazon regularly. Along with 50lb bags of dog food. In fact, they have subscription services for such things.

Milk I get shipped from Amazon Fresh, comes in a thermo lined container with dry ice.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by bloom2708 » Mon Jul 03, 2017 8:37 pm

watchnerd wrote: Sorry, but that's not correct.
Perhaps.

I get 30 rolls of Kirkland brand TP. 2 40 packs of 16 oz bottled watter. 12 rolls of paper towels.

:annoyed "Free" 2 day shipping via TP drone. :shock:
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by watchnerd » Mon Jul 03, 2017 9:03 pm

bloom2708 wrote:
watchnerd wrote: Sorry, but that's not correct.
Perhaps.

I get 30 rolls of Kirkland brand TP. 2 40 packs of 16 oz bottled watter. 12 rolls of paper towels.

:annoyed "Free" 2 day shipping via TP drone. :shock:
They'll ship all that and more. According to my order history on Amazon:

Last TP order: 48 double rolls, "Angel Soft" brand
Last paper towel order: 24 rolls, "Brawny" brand
Last water order: 1 pack of 35 x 16.9 oz, "Poland Spring" brand
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Fri Jul 07, 2017 1:20 pm

Just saw a study that showed Costco was 17 to 19 pct cheaper than Amazon on well known national products.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by flamesabers » Fri Jul 07, 2017 1:46 pm

watchnerd wrote:
bloom2708 wrote:
watchnerd wrote: Sorry, but that's not correct.
Perhaps.

I get 30 rolls of Kirkland brand TP. 2 40 packs of 16 oz bottled watter. 12 rolls of paper towels.

:annoyed "Free" 2 day shipping via TP drone. :shock:
They'll ship all that and more. According to my order history on Amazon:

Last TP order: 48 double rolls, "Angel Soft" brand
Last paper towel order: 24 rolls, "Brawny" brand
Last water order: 1 pack of 35 x 16.9 oz, "Poland Spring" brand
I also buy TP and paper towels in bulk from Amazon. 8-)
hoops777 wrote:Just saw a study that showed Costco was 17 to 19 pct cheaper than Amazon on well known national products.
Does the study factor in the cost of Costco's membership fee?

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Fri Jul 07, 2017 3:11 pm

I do not know about the membership fee and to be honest it does not matter.Amazon has a fee also if you are a prime member,but either way it doesn't matter unless you are not buying much over the course of the year.Besides,how much are those free sample lunches worth? :D
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by flamesabers » Fri Jul 07, 2017 3:51 pm

hoops777 wrote:I do not know about the membership fee and to be honest it does not matter.Amazon has a fee also if you are a prime member,but either way it doesn't matter unless you are not buying much over the course of the year.Besides,how much are those free sample lunches worth? :D
For me it's a matter of principle. I don't like the idea of having to pay upfront just to be able to browse the merchandise in a store. It makes me think of having to sign up for a gym membership before I can get a tour of the gym's amenities and equipment.

For those who already have a membership anyway, the 17-19% savings on national products sounds like a great deal. For people like myself, it's hard to gauge just how much net savings I'll get after I pay the membership fee. It would be like having to pay an annual fee on a credit card upfront without knowing beforehand what the exact cashback rewards are.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 » Fri Jul 07, 2017 4:32 pm

I would say in all honesty it just depends how much you will shop there.If you are that skittish about the membership it sounds like you are not a Costco person.It is very simple to walk in and check out what they have before committing to a membership.
I just saved about 700 -800 dollars on a car rental through Costco Travel.That is not a misprint.I know it was a fluke thing but it happened.I picked up a car in Jacksonville and returned it in New Orleans at the airports.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by denovo » Fri Jul 07, 2017 4:39 pm

flamesabers wrote:
hoops777 wrote:I do not know about the membership fee and to be honest it does not matter.Amazon has a fee also if you are a prime member,but either way it doesn't matter unless you are not buying much over the course of the year.Besides,how much are those free sample lunches worth? :D
For me it's a matter of principle. I don't like the idea of having to pay upfront just to be able to browse the merchandise in a store. It makes me think of having to sign up for a gym membership before I can get a tour of the gym's amenities and equipment.

For those who already have a membership anyway, the 17-19% savings on national products sounds like a great deal. For people like myself, it's hard to gauge just how much net savings I'll get after I pay the membership fee. It would be like having to pay an annual fee on a credit card upfront without knowing beforehand what the exact cashback rewards are.
Ancedotal I know, but I purchased a cruise on Costco and the price was $200 cheaper than if I booked it directly from Norwegian. So that paid for a couple of years membership fees.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by denovo » Fri Jul 07, 2017 4:41 pm

kjvmartin wrote:
If you have Costco + Prime, what could Amazon do to draw you away from Costco?

kjvm
The theory is that Amazon now with the institutional knowledge of Whole Foods could get grocery delivery to work, and bury Costco. Although we think of Amazon as an unstoppable juggernaut, Amazon fresh and their grocery delivery pretty much sucks. And yea it would be awesome if Amazon could get grocery delivery to work, I'd never have to leave the house except for social and recreational activities, almost.

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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by denovo » Fri Jul 07, 2017 5:53 pm

hoops777 wrote:One day people will be happy.All stores will be gone and all office workplaces closed.People will be able to work from home and never have to venture out into the world for anything,sitting at their computers all day,ordering everything they need online.The more health conscious will at least have a treadmill,that they of course had delivered from Amazon or Costco which also has a good online business. :D

Seriously,both Amazon and Costco are great and because they are great,they have a very large loyal following that are not going anywhere.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by rj49 » Fri Jul 07, 2017 11:11 pm

I decided a few years ago that Costco wasn't worth the stress and temptations--cart wars to get samples, waiting in line for check-out and gas, the temptations to have a hot dog or berry ice cream every visit, having my cupboards and fridge full of things that were appealing after the first couple of cans/jars but then became stale and unappealing or rotten. Now I go to Trader Joe's for most of my needs, with Fred Meyer/Safeway/Grocery Outlet for other things. The benefit of a real grocery store is there aren't any shiny huge TVs you have to walk past to tempt you or gift cards or other things you don't need but will buy anyway. Costco just makes me sad, like Walmart and McDonald's, and I don't need to save a dollar on a 60-pack of toilet paper, so I choose to shop where I like the experience and people.

All the studies show that Prime members spend much more (as do Target red card holders), and if you're like me, you can look through your past orders and find that most of it was unnecessary, and if you'd waited until you had $35 or whatever of things to buy to get free shipping, you might desist from a lot of impulse buying. Their 'free' books and movies are also a disorganized mess, like a sad Blockbuster store or Dalton Books, designed to tempt you into paying for books and movies and trashy tablets. If you need it for Christmas shopping, simply buy a Prime monthly membership for the month, or reimburse a relative or friend for buying stuff and having it sent to you.

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