Why does Costco have the lowest price for gas?

From my personal experience — Every time I need to fill gas, I think of Costco and plan my itinerary around it. I am amazed Costco has shaped the decision-making and plans.

If we put it in perspective Costco prices its gas at about 6 to 12 cents less the market price.

All the Costco warehouses are located at the most accessible locations, close to the major freeways. There would be a separate research team to analyze the best strategic location for Costco where the residential area is growing and which is the most commuted route.

There are multiple advantages by doing so:

I have done a lot of comparative analysis, no seller can match or offer less price than Costco. This a well-researched statement. I have personally invested time comparing prices for multiple things on different platforms and nothing can beat the price of offline Costco Warehouse price. Though Costco online price is marked a few cents higher and charge shipping price for a few items.

How is Costco able to come up with such a low price?

It is a wholesale market. Everything is sold in bulk. Often times a single-person user tends to trash around 20% on an average. People tend to buy more than what they actually need. There are multiple products for the same item from different brands. People generally tend to pick the product which they trust and have been using for a while. There will be new brand named Kirkland(First time you might have ever heard of), which offers the lowest price and good quantity. First time you see a Kirkland product and then you ignore it and pick up your usual branded product. Next time you see it again, this time you wanna give it a try. You really liked it, it was equivalent to the previous one you always choose. There was a positive impression on the brand Kirkland. You tend to extend the positivity on all the products under this brand. There is a positive impression created on the brand without any advertisement, marketing and brand ambassador. Kirkland is the product of Costco.

Here are the things

If put in perspective you are paying yearly subscription fees to buy its own product. Which is a big win for Costco. It has such a huge volume that Costco can decide the future of brand and maintain deep relationships with all the suppliers.

This is a win-win for all parties.

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