[niftich]

Okay, sure, but Costco's real strength isn't people's abstract trust in the quality of the Kirkland brand, but the fact that there's (1) heavy curation, leaving very little selection, which limits consumer indecision and raises the stakes for suppliers; and (2) an extremely accommodating return policy, so you can truly rest assured that you're made whole.

Lots of other stores have a money-back guarantee on their private label stuff, but are you really going to return a bag of $2 chips to a grocery store? But you've probably returned some big-price item to Costco before, so you likely have experience with the process. And when your purchase is closer to fifteen bucks instead of $2, you're a lot more likely to want the satisfaction guarantee. Costco gives you that, and you know in your heart that you're likely to actually use it if the item really doesn't work for you.

As for curation and selection, there's no more than two choices at Costco for every product category. Instead of buyers checking every shelf and variety and sizing of 6 different brands of the same thing before they buy, they make only two binary choices: Do I need this? Do I want the cheaper one?

Conversely, this means that your manufacturer's coupons, your rotating sales, your TV spots are all practically useless for tipping this market segment your way. As a producer, only way in to this near-captive market is to already be the leader, or to agree to make the Kirkland. Wouldn't you rather try than to be shut out?

[xenihn]

I once left a $60 item in my cart in the Costco parking lot. It was a lot to me at the time because I was still unemployed after college. I didn't realize I had left it until I got home. I went back to Costco and looked around in the parking lot to see if I could find it, then I went inside to ask if someone had brought it in. I asked if they could refund it so I could immediately buy another one, and they let me. I don't think any other store would have allowed that.

I'm now a high-earning adult who regularly goes to Costco with the original intent of buying two items, and leaving with a $200-$400 receipt. I know it's kind of pathetic, but spending money at Costco makes me really happy. I've spent an average of $5000 a year at Costco since I started working in tech. Easy to remember since I get roughly $100 back every year from the 2% on the Executive card. I've only returned like five products total ever, and none of them were pricy.

I'm going to be sad when Costco starts to suck. It can't last forever.