Anyone who wants to buy new AirPods might want to think about looking at Costco because their prices are cheaper for several reasons. The cost of many of our favorite electronics can be high, and Apple AirPods are no exception to this. It’s not uncommon to spend upwards of $150 on a new pair, and the latest versions are more than $400 if you buy them brand new and certain retailers. Costco’s prices tend to be cheaper than many others, and there are a few reasons why.
Table of Contents
- Why are Costco AirPods cheaper?
- Why Are Costco AirPods Cheaper?
Why are Costco AirPods cheaper?
AirPods at Costco are cheaper because they collect an annual membership fee from all shoppers, they buy their products in bulk and limit the number they sell, and they don’t do any local or national advertising.
Maybe you already have a Costco membership and are trying to decide if it makes sense to buy your pair of AirPods there. Or, perhaps you’ve been thinking about getting a membership and wonder if it’s worth it. In either instance, there are lots of advantages to buying your AirPods and other electronics at this megastore, and there are quite a few reasons why.
I love Costco almost as much as I love my Apple products, and am a big fan of buying all my Apple accessories there. Some people believe that the Costco membership isn’t worth it, or that the deals Costco has are too good to be true. But, I’m going to explain to you why that is simply not the case.
Why Are Costco AirPods Cheaper?
Anyone who has ever stepped foot inside a Costco store knows the excitement inside this giant, big box warehouse.
Opening its first doors in 1983, Costco began in Washington state, where it primarily catered to small businesses in the beginning, offering them discounts on bulk items if they paid a minimal annual fee to be part of the company.
Throughout the last forty years, Costco has grown to become the powerhouse it is. There are now more than 800 warehouse stores worldwide, and the chain just continues to grow.
In fact, in 2021, Costco was ranked as the 10th largest corporation on the Fortune 500 list and is now considered to be the third largest retailer in the world.
More than 94 million of us around the world have an active membership to Costco.
Costco is a no-frills warehouse-style brick-and-mortar store that is usually found near large metropolitan areas and can have hundreds of different products at a time, including its own Kirkland brand of foods and goods.
Though Costco is widely known for selling choice meats, organic foods, and wine, it is also a popular place to find electronics as well. From laptops to cameras, any high-tech gadget that you can think of is probably being sold at Costco at some point, and usually for prices that are lower than other average retail stores.
For example, I recently found a pair of AirPod Pros listed for $155 at my local Costco store. I then looked online and saw they were retailing for $179 on Amazon.
These were both the exact same AirPods, brand new and all accessories included.
So how does Costco do this? Why are they able to sell AirPods and other electronic devices for substantially less than other retail stores?
The answer is pretty fascinating. And it will help you learn more about Costco, why you should buy your AirPods there and how they keep their prices so low.
1. They Collect an Annual Membership Fee From All Shoppers
One of the biggest driving forces behind Costco’s ability to keep its prices so low is because there is an annual membership fee to join the organization and show inside the warehouses.
An annual membership fee to Costco is $60 a year. To have an Executive Membership, it will cost you $120 (but you’ll be privy to cash back incentives when you shop.)
That might not sound like a ton of money in order to be able to shop at this discount giant, but the powers-that-be at Costco know a thing or two about profit margins and how to run a successful business.
It is estimated that almost 75% of Costco’s profits actually come from membership fees.
There is no cost for Costco to charge a membership fee. So, that $60 or $120 that you are paying a year translates into almost all profit for Costco.
Because of this huge profit-making opportunity in membership fees, Costco can afford to then keep its prices lower than most stores can. They don’t need to mark items up as high because they are already making such a hefty profit from the fees all of its members are paying.
2. They Buy Their Products in Bulk and Limit the Number They Sell
Most of us, at some time or another, have had an opportunity to get a better deal on something because we bought more than one of it at the time.
Whether it’s a 2-for-1 deal of toilet paper or the three-pack of spaghetti sauces, we know that oftentimes buying something in a large quantity will save us money in the long run on the price of each individual item.
Costco knows this trick as well, and they employ it in order to get better deals on the items they buy. Because of their vast size and powerful position in the retail market, Costco can buy items in bulk from their suppliers, then eventually pass those savings that they made on to us, their customers.
A good example of this is the relationship Costco has with Apple. Items like AirPods, MacBooks, and iPads can be bought in bulk by Costco, which lowers their price. Then, that savings is passed on to us when we go to buy those AirPods from our local Costco store.
And, even though Costco has hundreds of brands to stock on their shelves, they actually have less brands than other large stores similar to them.
Because of this, they are dealing with fewer vendors and suppliers and can then lower the price so that we can then buy these items for less.
3. The Don’t Do Any Local or National Advertising
Have you ever noticed this one?
Next time you’re flipping through a magazine, watching a favorite television show, attending a sporting event, or walking through a major city, notice that you never run across any ads for Costco. You will see Walmart, Best Buy, and all the other large box stores. But Costco is not amongst them.
Advertising is a huge line item for most retailers (and businesses in general.) Not having that expense as a company makes a big difference in their budget and saves them millions of dollars every year…dollars they can pass on to the consumer by keeping their prices low.
Costco’s main goal is to keep its prices low. And anything that raises their prices they see as detrimental to their success.
So, not advertising the AirPods they have for sale, or any of their other cool gadgets means you will pay less for those AirPods and probably anything else you decide to buy at your local Costco store.