staff@slashgear.com (Shane Schmid)
2024-04-22 13:15:54
www.slashgear.com
Costco uses an interesting business model that enables it to offer savings over the competition, sometimes by a wide margin. The company can afford such discounted products because of shopper membership dues and a non-existent advertising budget. Since customers pay to shop at Costco, they can recoup any losses due to price cuts, and customers will undoubtedly return to utilize their paid membership for repeat business, leaving no need for advertising.
So, what does this have to do with batteries? It turns out that when comparing a similar battery between Costco, AutoZone, Batteries Plus, and O’Reilly Auto Parts, Costco’s battery is significantly cheaper. Using a late model GMC Sierra 1500 as an example, the Interstate Battery product offered at Costco started at $109.99 for this truck. However, AutoZone started at $194, Batteries Plus came in at $179.99, and O’Reilly Auto Parts wanted anywhere from $134 to more than $250.
It wasn’t just the overall price that differentiated Costco from the others. The refundable core charge was $7 cheaper at Costco, and although O’Reilly offered a three-year warranty on some units, they were still $100 more than Costco’s batteries with a 36-month warranty.