09.13.06
The Costco Stamp Mystery
Perhaps someone can solve the following mystery.
Last weekend at Costco, I saw a box of 100 first-class $0.39 stamps for $38.75. For those of you keeping track, that’s a savings of (a whole!) quarter.
For almost any other product, I wouldn’t think twice about a discount for bulk purchases - particularly a discount that small. Stamps, however - well, stamps are special. For some reason (and unfortunately I can’t seem to find any official documentation to back this up), I thought stamps were never, ever sold for under face value. Indeed, you can buy a coil of TEN THOUSAND (10,000) first-class stamps - a whopping $3,900.00 worth of postage and it’ll still cost you exactly $0.39 per stamp.
I suppose that the Costco stamps could be a loss leader, but this situation doesn’t conform to the usual criteria: the stamps are easily accessible (they were near the check-out), they last pretty much forever, they’re undifferentiated, and they don’t really lead to sales of anything else.
So, I’m curious if anyone has a clue - does Costco get some sort of super-special deal on stamps? Are they selling them as a loss leader in some sort of bizarre bet that a .65% (that’s a little over half a percent, not 65 percent) discount on stamps will get people to shell out the $50 membership fee? Or is there another reason that I’m just not seeing?
Danny Silverman said,
September 17, 2006 at 9:19 am
Interesting, Costco has been selling the bulk rolls of stamps for a while, but they used to be $39 even. Correct me if I’m way off the mark, but my understanding has been that anyone who sells stamps (banks, schools) does so at a 0% markup as a convenience to customers and nothing more. Costco selling the stamps at a very minor markdown over normal price could indicate a few things, but off the top of my head I can think of three reasons:
# A subtle indication to customers that membership is “worth something,” in much the same way that they sell relatively inexpensive prepared food at a counter near the exit even though it is unlikely they make much money from it.
# Alternately, building a “culture” that says Costco “cares” about its customers by “going the extra mile” to offer them savings and convenience, thus enhancing an already gleaming corporate image.
# Another way to encourage penny-pinchers to come into the store and buy additional things in bulk, either because they actually would go all the way out of their way to get slightly cheaper stamps or because they will think, “gee, if Costco can even sell *stamps* cheaper, then their other products must be the best price!”
Or perhaps its just because a small step like this can get people like you and me pondering why Costco would do it, thus giving the company additional mindshare.
Christopher said,
June 24, 2009 at 6:13 pm
Is it possible that the US post office had just upped there postage rate and that costco was selling off their remaining stamps at a reduced value?