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Comment by maxerickson | Hacker News Reader

Costco sells a bunch of generics. Their Allegra is super cheap compared to everyone (or was the last I checked).

They sell generics, but I don't believe they actually make them.

Allow me to clarify: CostCo sells everything at a fixed profit margin (I believe it's around 18% but I could be mistaken). I have no idea where their generics come from, I doubt they manufacture themselves, so before the CostCo markup they are subject to the same inflated prices you'll find anywhere else before the pill reaches the drugstore or your doctor or whatever.

What I've been imagining, specifically, is generics manufacturer that applied a fixed profit margin — "cost plus" — to their products. I guess that's not precisely the CostCo model, but you get my drift now.

"CostCo sells everything at a fixed profit margin (I believe it's around 18% but I could be mistaken)."

You're mistaken no they don't.

Still waiting for the clarification. You nailed the denunciation, though.

You're right, it's not fixed. It caps at 14% for outside brands, 15% for "Kirkland" brands, but averages at 11% (2019). https://www.inc.com/jeff-haden/how-does-costco-compete-with-...

Contrast to markups of 25 to 50% for typical retail, and for generic drugs in the thousands. https://www.thepharmaletter.com/article/1-000-pharmacy-mark-...

That inc article is the only place I see those margin caps and it doesn't come sources. Other articles say that costco doesn't publish their margins.

However, their financial statements do indicate an 11% average gross markup.

But there are definitely plenty of products marked up more than 18% at Costco. Either that or they are paying way too much for some things.

Most in my state (CA) also have fully functional pharmacies, and the prescription drug prices are much cheaper much of the time. I shopped around when I went through a period of poor insurance (years ago) and my monthly medication costs were $25 at Costco, and the nearest competitor I could find was just over $100 when paying cash. Also, I believe that California, you do not need a Costco membership to purchase from the Costco pharmacy.

You also don't need a Costco membership to purchase alcohol. And a lot of Kirkland liquor is the absolute bomb.

What is good besides the vodka being a near identical done of Grey Goose? I feel like I got kind of burned with their tequila, which was extremely mediocre.

The gin is pretty good value. I agree about the tequila.

Not sure if their supplier has changed in the past few years, but their bourbon is pretty good for the price. There was speculation it was from Jim Beam, some kind of Knob Creek barrels.

I've heard that their scotch is extremely competitive at that (low) price range.

Their scotch can be good, but look up the specific bottling. Sometimes it'll be something like a "factory second" of MacCallan 18... not the prime barrels, not as good as the stuff actually sold by macallan, but also about 1/3rd the price.

This isn't the case everywhere. It depends on which state you live in

I think this is only true in a handful of states. In California, there's apparently an old law that you can't have members-only alcohol clubs, so Costco technically has to let you buy alcohol.

I tried this once last year before I had a membership, and the person at the entrance told me they would need to get an employee to escort me, and it might take an hour, because they're busy.

Presumably this is the kind of thing that a court would smack down, since I'm pretty sure they're required to actually provide reasonable access, but I was just trying it for fun and didn't make a fuss about it.

> I tried this once last year before I had a membership, and the person at the entrance told me they would need to get an employee to escort me, and it might take an hour, because they're busy.

> Presumably this is the kind of thing that a court would smack down, since I'm pretty sure they're required to actually provide reasonable access, but I was just trying it for fun and didn't make a fuss about it.

Also it makes no sense for them to need to escort you. They scan your card on checkout so how would you buy stuff other than alcohol anyway?

Anyway I've never heard of anyone being told that before. I understand not making a fuss (we are social animals after all), but it probably should be done so they don't keep trying BS like that.

I mean, they obviously just didn't want non-members in the store.

I'm surprised they said that, but probably your mistake was in asking. :) Even with a membership, I'll occasionally be too lazy to bother pulling my card out at the door, and will just tell (not ask) the person there that I'm going to the pharmacy. They let me go right on by. Once in, you can go anywhere you want. As CogitoCogito said, the real check is at the register, where you can only buy certain items without a card. Apparently that also includes alcohol - never knew that.

The person at the door was very diligently checking. This was the SF Costco, in the early days of the pandemic lockdowns, so perhaps it's unique to that specific location or those specific circumstances. Indeed, just a few weeks ago I went to another Bay Area Costco intending to inquire about membership, and the person at the door was just handing out promotional flyers, so I helped myself to a quick self-guided tour of the store to see if I thought membership made sense for my household (I did decide to buy a membership, for what it's worth).

That is correct. Just tell them you’re going to the pharmacy at the entrance.

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