Costco Dropping iPod After Being Left Out of iPad Surge?

[weckart]

Sort of poor-man's Makro. They sell the s**t made in China that no-one else wants, not even the shopping channels, as well as large packs of baked beans, etc. Cash only.

Your comment brought back memories of the Simpson's "Pulp Fiction" parody - "... I went to the MacDonalds in Shelbyville on Friday night ....I never heard of it either ...".

I was a member for a year, used Liverpool and Edinburgh. Let's just say, you don't go to Costco unless you really have to.

I am a member of both Makro and Costco and you have this totally backwards, which is pretty much why Makro has been scaling down its branches - two large locations near me disappeared in the last year alone.

Costco carries fewer lines, but those it does are at a discount over the high street with a few exceptions. As far as Makro is concerned, its non-food items cost MORE than than what you would pay from the average retail store, which is why I don't bother going there as what I would save on the food items does not cover the petrol costs of getting to the nearest branch, now.

Costco is also not "cash only". Debit cards are accepted. Using credit cards would only raise the prices for us members.

As for Apple products - their sales probably didn't even register on Costco's radar. No great loss to Costco. Baked beans easily outsell the iPad.

 

[BertyBoy]

I am a member of both Makro and Costco and you have this totally backwards, which is pretty much why Makro has been scaling down its branches - two large locations near me disappeared in the last year alone.

Costco carries fewer lines, but those it does are at a discount over the high street with a few exceptions. As far as Makro is concerned, its non-food items cost MORE than than what you would pay from the average retail store, which is why I don't bother going there as what I would save on the food items does not cover the petrol costs of getting to the nearest branch, now.

Costco is also not "cash only". Debit cards are accepted. Using credit cards would only raise the prices for us members.

As for Apple products - their sales probably didn't even register on Costco's radar. No great loss to Costco. Baked beans easily outsell the iPad.

Sounds like Makro has gone downhill in the last 10 years. Not bashing Costco, I'm sure it has great offers for those that wish to buy large quantities of items in bulk. I don't find this appealing, add in the fuel costs (in the UK), say £16 ($25) there and back, plus the membership, plus the amount of space I'd need at home for 400 nappies, 48 tins of beans, etc, plus the time there and back. Just not worh all the effort to "save" about £5 on a monthly shop.

So is it worth all that effort to go there to buy an iPod to save, err, nothing ?

Not been to Costco in nearly 10 years, my last "tour" I left with nothing coming out feeling that it was mostly tat, out-of-date electronics goods (ie. more than 3 months old) at normal prices.

I don't feel the social demographics of the main iPad consumer match that of the Costco consumer.
Who buys a Rolex at Costco ? I have two, and the shopping experience, and price, were much better in a select jewellers. Just an hour of chatting and haggling and the suggestion that I might buy another for my wife saved me time and money over Costco, and I enjoy the chatter. Maybe I spent too much time in the Middle East.

 

[Dbrown]

My problem with Costco is that for whatever reason, they don't want to sell iPods via Costco.com. You have to go to the store to get one. My local Costco doesn't even have the 64GB Touch. I gave up waiting and ordered form Amazon instead. I find Costco to not have such a good deal on electronics anymore, other than the 90-day return window. They stock old stuff, new stuff takes a long time to arrive, and the discounts aren't that great either. Amazon prime seems to be a better value for me. I only buy non-electronic stuff at Costco now.

Do you not understand how costco works? Costco is a discount retailer. That means they sell stuff at lower than retail. If there are no 64gb touch for sale at costco that means apple wont sell them to costco at a price where the savings can be passed onto costco members. That's how it works for every product costco sells. So there's no point in even carrying it and a total waste of space because costco members dont pay $50 yearly to see stuff in the warehouse stores at retail price.

 

[Rocketdun]

Dumb Move Costco

tried selling iMacs at one time the employee that hovers around the computer area was so busy he had not a clue that the 20" iMac they had would run circles around the lame HP's they were so busy hooking up. The iMac was not even plugged in or up and running. I guess their stock in trade is the lame coupons for toilet tissue, tissue, paper plates. You can rest assured that Wal-Mart will sure be too happy to sell you any iPod, iPad, or anything else they have with the Apple logo. Don't expect anyone in the electronics department to have a centila of knowledge about any electronic device in the their store, whether or not it's Apple or not. The sad thing about Wal-Mart is that most of the TVs they market are hybrids, either last years model, or has some twist on the item or some bell or whistle that they chose not to offer. Costco, could be the winner in this race. They were considering revamping their liberal return policy because people were buying computers and then as soon as they wanted to upgrade they just brought the old one back. I guess Seattle is further from Cupertino than we thought

 

[minderbinder106]

Ah, so that's why. I was at Costco recently and noticed the prominent switch from Coke to Pepsi products in the snack bar and vending machines.

You must not have been there that recently. They are carrying Coke products again at lower prices.

 

[rdowns]

Finally a post with sense.

You have to look long and hard but you do find them occasionally.

 

[johnnymg]

Costco is a third-world S-hole when it comes to a shopping experience.

I'm betting that Apple dropped them!

JohnG

 

[Jon the Heretic]

Costco is the best; so is Apple

Across most categories, Costco represents the best value for the money. They aren't always the cheapest--but you almost always get the best deal for your money. Costco is all about selling quality. I've had Sam's and BJ's and they are fine---but Costco just does it better across the board.

That said, I don't buy major electronics such as Apple products from Costco. I can almost always do better online and often tax free/free shipping (Apple store refurbs rock even with tax, and Amazon is competitive). Apple products isn't Costco's strong suit. Then again, I am not impressed with the pricing of Apple products at Sam's, Best Buy, Target, or any of the rest. Say what you will, but you rarely get a good price. I've done MUCH better elsewhere. Apple store and Amazon rule (and LA Computer for Applecare warrantys). Even my 46" Sony LCD TV came from Fry's where I got it tax free, with free shipping of a slightly older model and got far more for my money than I could have gotten at any brick and mortar, including Costco. For the same price at Costco or Sam's I would have had to settle for a Vizio (actually would have paid more for it because of sales tax). A good deal for most, but you can do better if you shop around online.

If you are bashing Costco just because they are having some business issues with Apple, then there is something wrong with you. While the bashers defend Apple, I am going to save easily over 30% on eggs, milk and gas (20% off) and save $10 on a PS3 Move Bundle later today as I drive near the store. And over the next couple of months, I'll be pricing an iPad for Xmas online like I always do. (Too bad bing.com cashback is gone; I scored a new 2nd gen iPod Touch 2 years ago on ebay for 35% off. Now THAT's shopping...)

 

[johnhope]

As always

if those were left out THERE ARE GOOD REASONS!!!
Thanks Apple to let out who doesn't deserve your products.

 

[Jon the Heretic]

Costco is a third-world S-hole when it comes to a shopping experience.

I'm betting that Apple dropped them!

JohnG

And you think Walmart isn't? I find it claustrophobic. I hate shopping at Walmart. Costco is spacious by comparison.

And Sam's? Exactly the same experience as Costco. Are they being dropped? Only difference is that Costco sells more I like at a price I like, and they don't treat their employees like indentured servants.

Do you not understand how costco works? Costco is a discount retailer. That means they sell stuff at lower than retail. If there are no 64gb touch for sale at costco that means apple wont sell them to costco at a price where the savings can be passed onto costco members. That's how it works for every product costco sells. So there's no point in even carrying it and a total waste of space because costco members dont pay $50 yearly to see stuff in the warehouse stores at retail price.

I rarely see any Apple products at Costco, Sam's, Target, Best Buy, Walmart at anything other than retail. Given you are paying sales tax, I see no reason not to use Amazon and save on sales tax at least.

Costco has a maximum profit on items of about 15% for even their own brand items. I don't think they have a minimum profit but I am imagine given the lack of elasticity on Apple prices, Apple products must be close to the bottom for them. And yes, they prefer to offer people GOOD deals. So far, they have the very best price on PS3 Move Bundles (not dramatically better, just $10 off, but better than anyone else I have priced. And I'd buy it online in an instant if I could find the same deal with free shipping and no tax.) So they have more wiggle room on SONY products than Apple.

 

[mutantteenager]

If Apple had dropped Costco as a reseller, most of the fanboys here would be whooping with joy. Just because Costco made a business decision based no doubt on a range of factors, including the margin on Apple products, they are doing it purely out of spite??

Considering the saturation of ipods the world over, this is hardly going to put them out of business. It also goes to show that it's a two way street for Apple if they choose to alienate their vendors/resellers.

 

[Chupa Chupa]

I wish Costco sold apple computers. I'd feel much safer with my purchase than having to deal with Apple direct.

I love their return policies, takes the buyers remorse out of those expensive purchases.

Of course Apple doesn't want to play with them. Imagine all those imac's with yellow tint which would have been returned. Where would Apple have stored them all ?

Apple doesn't take returns from resellers. It's why most resellers do not take returns from customers. Those that do "eat" the cost and sell the defective units to a salvage company. When you see companies selling refurbed Macs w/o an Apple warranty that is where those come from.

If Apple had dropped Costco as a reseller, most of the fanboys here would be whooping with joy. Just because Costco made a business decision based no doubt on a range of factors, including the margin on Apple products, they are doing it purely out of spite??

Considering the saturation of ipods the world over, this is hardly going to put them out of business. It also goes to show that it's a two way street for Apple if they choose to alienate their vendors/resellers.

This is really like an adolescent break up where each party "needs" to claim they were the one that broke up with the other. What is going on here is that Apple can't make enough iPads to supply Costco AND Sams AND Walmart. Walmart is the biggest retailer in the US so if it's between Walmart and Costco there is no choice which to go with first.

Costco OTOH doesn't want to look like it got the short end of the stick. It's an image issue -- customer's might wonder why they are carrying iPods but not iPads. Clearly there is demand to sell them, so Costco can't give that as an excuse. They are not going to say b/c Apple won't sell them to us. So Costco just clears the deck and says we don't sell Apple products --- makes them look like they broke up w/ Apple.

 

[Disc Golfer]

Who cares? What percentage of costco's profits are derived from ipod sales? They sell practically everything else so it's not as though people are going there just to buy an ipod. Not to mention you can get ipods plenty of other places. What is the problem here?

 

[C. Alan]

The Costco bashing here is amazing. They're a straightforward, ethical group that sells good stuff at decent prices. It's disengenuous to lump it in with Wal-Mart etc; they treat their employees far better, and unlike Wally World, you can't just indiscriminately point at any item in the store and assume it's cheap Chinese crap.

Interestingly, Costco has VERY high sales figures with high-income segments of the population--as the old saying goes, it's hard to get rich by spending money. There are a LOT of people who buy their $20 house-brand jeans /sneakers who can afford much fancier stuff. Same goes for their house-label foods (Mariani used to rebrand their dried fruit for Costco, etc etc) Seriously, though, Costco is a great deal for may things, and is a great organization to boot. Anyone else remember when they sold Steinway pianos back in the 90s? (Very short-term, then Steinway decided it wasn't good for their brand image.)

If Costco is dumping Apple, I'm inclined to think it's justified, and not just a capricious decision. And to the fanboys hoping this will be disastrous for Costco--dream on.

Well said. I don't get the reasoning behind alot of the Costco bashing in this thread. Ipod sales are a very small portion of their operation.

I feed a family of six in my household, so my costco membership usually is used to buy food and clothing.

I have friends who have worked there for years, and love it. Costco is proof that a retail company does not have to pay slave wages to make a profit.

 

[leroypants]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_1 like Mac OS X; en-us) AppleWebKit/532.9 (KHTML, like Gecko) Version/4.0.5 Mobile/8B117 Safari/6531.22.7)

Well there goes my membership. That sucks too cause I kind of liked Costco.

Oh well.

Me too, i know that i save hundreds a year buying in bulk for my family, but (like you and the others screaming that costco are cry babies) I am a slave to apple.

Costco's loss, by BFD anyway.

Only an apple fanboy would consider it a big loss, retailers make very little off apple products.

 

[Chupa Chupa]

Who cares? What percentage of costco's profits are derived from ipod sales? They sell practically everything else so it's not as though people are going there just to buy an ipod. Not to mention you can get ipods plenty of other places. What is the problem here?

Some are "outraged" a company would opt to not sell Apple products.

Others are saddened or annoyed b/c Costco is by far the best place in the world to buy electronics b/c of their 90 day no-questions return policy.

 

[linux2mac]

Not a big deal at all. Amazon is the best place for discounts on Apple products because you don't pay sales tax and get free shipping via Amazon Prime. For example, I paid exactly $1694 for my C2D 27" iMac last year versus adding about $200 in sales tax at Apple store. And I will get my iPad from Amazon when I feel I need one.

 

[pika2000]

Do you not understand how costco works? Costco is a discount retailer. That means they sell stuff at lower than retail. If there are no 64gb touch for sale at costco that means apple wont sell them to costco at a price where the savings can be passed onto costco members. That's how it works for every product costco sells. So there's no point in even carrying it and a total waste of space because costco members dont pay $50 yearly to see stuff in the warehouse stores at retail price.

I do understand how Costco works, but do I care? I've been a paying member for more than a decade. I expected Costco to carry a popular product that I want at a good price. The Costco I went to has all the other iPod models, including the Classic, nano, and up to the 32GB Touch, but not the 64GB one. As a customer, I simply see that Costco doesn't carry what I want, and I shop elsewhere. Plain and simple. I couldn't care less what's the reasoning behind Costco not carrying it.

Other than the 90-day return window, Costco prices on their electronics aren't as great as they used to be, and they don't even have latest models.

 

[Chupa Chupa]

Not a big deal at all. Amazon is the best place for discounts on Apple products because you don't pay sales tax and get free shipping via Amazon Prime. For example, I paid exactly $1694 for my C2D 27" iMac last year versus adding about $200 in sales tax at Apple store. And I will get my iPad from Amazon when I feel I need one.

Maybe not a big deal IF you are Prime. If you are not Prime then you only get "super slow saver shipping", i.e., UPS to USPS or you have to pay for regular UPS ground or air. Amazon + shipping = Costco + salestax. The difference is Costco gives you instant gratification vs. waiting around 5-10 days.

 

[gruntersdad]

I will start of by saying , I've been in retail for 20 years and have been a buyer for 6, It amazes me that some consumers really think that this is any type of "Big" loss for Costco,I will be you that Costco is making about 15.00 per unit after factored in overhead, not including LP standards for Shrink (Shrink is retail for theft internal/external)

People don't come to Costco to pick up an iPod........

This will most likely be a cost effective move for Costco.......

Do consumers really think there is some kind of magical profit/margin in selling electronics? just FYI , the manufacture makes the money, not the retailer, most stores only carry products like this for the customer draw, they count on making money else were in the store....

Costco is not worried about the Draw.......lol

This was to be my thought. Apple is a draw to get people in the store
to buy 200.00 worth of bulk items not a bunch of Apple products. One step above being a loss leader.

 

[louis Fashion]

Cry some more.

Entire Costco is babies.

Is they?

 

[ElusiveMind]

Honestly? Who cares!

If Costco doesn't want to carry Apple products then I'm sure neither company really gives two craps about it. Retailers sell products to make money. If they choose not to sell products by Apple, then it's their loss given Apple products are a hot commodity. Costco should be relatively happy to be able to offer these products - just as they would products from any other electronics manufacturer.

But Costco dumping Apple because they're not currently able to sell iPad? That does sound a bit petty.

Then again, it's not like it will cost Costco a customer in me. They don't have a store near me and I doubt I'd go there even if they did. Just not my cup o-tea.

 

[gadams999]

If I was running Costco, I would ban your arse for life. As soon as the cameras detected your face, I would have security swarm and push you out the door after taking your membership card, refunding the fee and cutting up the membership card.

If you are serious then you are not a customer but a parasite. Ambulance chasing lawyers have more ethics than you apparently.

Wait, you think he's an ass because he's exercising the stated return policy of Costco? If they are happy with the policy, what's it to you? He isn't doing anything wrong, and in fact, I bet because of it his loyalty to Costco is worth more as a retained customer.

Costco recently changed their return policy on electronic to limit the asstards that would buy huge LCD screens right before the Superbowl then return them a couple weeks later. With the float on AMEX, there was not out of pocket cost to them. Yeah, I'm talking to you down-the-street neighbors.

I'm a loyal customer of Costco and the decision to sell or not sell Apple products has little impact on me. Now if they stop selling that block of white cheddar cheese though....

 

[herr.butzie]

Robinson Pattman act of 1933

Costco could sue Apple under the he Robinson-Patman Act, 15 U.S.C.A. Section 13a enacted into law on June 19, 1936 and would win!

 

[CalBoy]

It's a very common hardball negotiation tactic used by big outlets to pit one manufacturer against their prime competitor.

It rarely becomes public knowledge like this. Who's to know if Apple and the Costco buyer couldn't come to a deal each could accept, or if Apple refused to sell to them for sh*ts and giggles, but I'd put my money on the former.

That negotiation tactic is one of the reasons I love Costco; you can shop with confidence that the price you're getting is probably the best, or at the very worst, amongst the lowest possible.

As for the disagreement with Apple, it's also possible that Apple didn't want to commit to more retailers until its supplies of the iPad were stronger, and since WalMart had already been given the iPad, it made sense to give it to its subsidiary, Sam's.

This is too bad; Costco has a large pool of customers that don't necessarily overlap with other retailers.

I think a lot of people are missing this when reading this story. Costco's customer base is very unique relative to other retail outlets. In the end Costco doesn't care about a few people not buying iPads (since Costco's margins would be pretty slim anyway), it cares about offering customers what they're looking for. Apple missed out on an opportunity to sell iPads to a lot of people who might never have thought of buying one.