If your argument is correct and tires really do last longer with nitrogen then it appears that Costco is shooting themselves in the foot since they would have less repeat sales over time, not more.
From what I've read so far you have no clue why Costco does what it does. It's pure guesswork on your part.
When I was a Costco member I could almost always find the same or better deal on a high dollar item elsewhere. But the two stores near me are always packed so what do I know. Or maybe it should be there's one born every second?
I used to buy ALL of my tires "cash and carry" - and take them home and install and balance them. That was when I had easy access to the equipment. Now that I don't have easy free access to the equipment, I buy them installed on the rim and balanced. All told, I bought a lot more bare, uninstalled tires than I have installed. But I am, admittedly, not your average customer.
Actually, the margin on tires is QUITE slim. If you are going to get rich selling tires, you will have to sell a lot of them. One place where I worked we sold over 1000 sets of snow tires each winter out of a 3 bay service station. I'm sure we made more on the installation than on the tires back in 1969-71. The wholesaler might make a better margin than the retailer - and Costco is, in effect, both so they can afford to sell them for less than the average independent shop - for sure.
No, because people will buy tires from places that sell tires that last - so the customer comes back to buy more tires if the tires stand up well - they buy tires elsewhere if they do not - -with price being a secondary consideration in many cases. And the average car owner owns a car long enough to wear out about 1
1/2 sets of good tires.- so they will be in to buy the next set of tires for their next car more likely than for this one.
Used to be there were great deals at costco in Canada - now I can usually buy just about anything for less elsewhere if I look hard enough. The advantage of Costco is they have EVERYTHING under one roof.
I'm not a member any more - found it wasn't worth it for me.
I am sure people have been looked at in many years over the years. To someone like me that has not, it seems difficult to know what drives people to buy things. I know a small farmer that had some produce for sell at a flea market. At 25 cents he could not sell any, but as soon as he took that sign down and made it 3 for a dollar he started selling the same thing. Peopel would pay more ,but probably thought they were getting a bargain.
While right or wrong, I am sure any business of any size has some people looking at ways to get customers in the store and make the most profit.
Big difference. I shop at both as they both have benefits tot he consumer. The meat from WalMart sucks and is injected with brine solution. The meat at Costco, BJ's and the like is top quality.
We use Cascade Platinum dish washing detergent. It is 17¢ a dose at BJ's and is 23¢ at Wal Mart. Assuming a load a day I save $21 a year on just one little item. Laundry detergent was a savings, paper towel was minimal. I can save enough in meat in a month to pay for the membership.
Your money, your choice, but the Clubs can be a money saver to a smart shopper.
Everyone know that the three for a dollar stuff is better quality than the quarter stuff.
I've seen that happen over they years. I've seen it with industrial products too. A certain tape for cartons was $1 a roll. A guy started making it and could profitably sell it for half that, but had no takers. He increased the price to 75¢ and got orders. Eventually sold the company at a nice profit too. .
There is NO "free benefit"! The customer pays for EVERYTHING. A business must make a profit to survive. I don't know Costco's business model on tires but it may a selling point that costs then very little in the volume they do. Ask Claire, he will tell you they had a price structure they followed and the only thing that wasn't figured in was rework. But that was included in the labor charges and/or tech agreements.
Guy I know from church, military vet. He is so pleased at the free phone, free medical care, etc. Every time he says "free" my brain changes that to "taxpayer funded".
Star Spangled banner: "O'er the land of the taxpayer funded, and the home of the brave."
If he's a military vet, he's likely paid for it 3 times over. You want to complain, retroactively trade places with him. Korea, VietNam, Desert Storm, or Afganistan - doesn't make any difference. There are a lot of invisible injuries (ptsd etc) that just don't go away.
Would be nice if he'd say "taxpayer funded" instead. At least his description would be accurate. From what I know of his service, though, he's paid every penny of the value in what he did for the country.
Costco, or any store, determines prices based on what generates the maximum revenue, not on what it actually costs them to provide a product or service.
The mistake that many people make is to assume that the cost of the included nitrogen is a line item in their price calculation of what to charge for tires. Retail doesn't work that way, for better or worse. They also include valve stems on non-TPMS tires instead of charging extra for it as many tire stores do--$2 for a 10¢ item. Costco is not going to lower the price of a tire by 10¢ if a customer declines the nitrogen.
Costco's tiny cost for nitrogen is almost certainly offset by savings in labor and warranty costs so if anything they should charge extra to customers that don't want nitrogen.
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