For us having a Executive card brings us better benefits for things outside of just warehouse shopping. I get free roadside assistance by having car insurance thru Costco and I get other benefits for my car insurance. Knowing that I probably wouldn't pay just $100 year (the executive membership fee) for roadside assistance here in WA we decided it was best for us.
But No, we dont' get back $100 for the 3% back per year. Which sucks because you'd think we'd at least get close because we do a lot of our shopping there....well we did.
Its a love hate relationship for us with Costco. Some stuff hands down is cheaper but other stuff its so much more expensive if I had just waited until it went on sale at a local grocery store.
BUT because we get such benefits as having free roadside assistance on our car insurance its worth the membership fee. (this is mainly because my hubby doesn't exactly have the best driving record! this might not be as cost effective for other drivers out there)
The value depends on what you want to get out of it too.
I rented with Chegg.com for the first time this semester and have been happy with the results. If I decide I want to keep the book after taking the class, it's an option for an additional fee. I like the non-hassle of reselling too.
I used bigwords.com to find the best prices, which led me then to Chegg. With Bigwords.com you can also exclude international copies which can lead to problems.
Chegg is on twitter too, with some savings options if you want to contact them. I got a 5% discount, which saved the shipping costs.
A friend approached me, and asked for help buying her books for university. Her student loan was delayed, and was due in any day now. I've been there, and managed anyway, so I agreed. Well, a few months went by and my partner's dad had another bad heart attack, and somehow my partner needed to get back to see him.
Not only had the friend never intended to repay me, she had been denied student loans because she owns her own house. And because I asked to be paid back, and wasn't as popular as she was (likely because I didn't give parties, being one of a pair living on one person's student loans), I was very quickly ostracized from my only social group.
Having nowhere to go, having nobody to talk to, having stress from my partner's father's poor health, it's not really a surprise that I was soon diagnosed with major depression and consequent to my depression, debarred from university.
That was a very expensive $500. I'm not sure I can ever forgive any of them, the friend who lied to me or all those who turned their backs on me.
I lend friends money, but only as much as I can survive without, and I never expect it to come back. I've been pleasantly surprised, but never again so badly disappointed.
I had a friend ask to borrow money, and after pretty much begging my husband he agreed to the loan. But I was upfront with my friend - this money was coming from our adoption fund and thus we really needed it back. She made lots of promises and thanked us.
To date we've only seen a small fraction of that money back. I really don't think we'll see any more of it.
My new policy - never loan money. To anyone. Period.
I've used Chegg, bought on Amazon Marketplace and resold books.
It really boils down to availability. The books I've rented on Chegg were because nothing else (other than the $120 new edition) was available Amazon.
Usually I go for the marketplace, one edition or two back depending on the book and the class. Some required course which has nothing to do with my focus of studies, I go for the oldest and cheapest.
As far as reselling, don't expect huge profits. It all depends on the book. Many times there's an enormous glut of books on there for under $1-$5. Other times, you can set your price but may have to wait 6-8 months for a sale.
It does feel good when you know you only paid $15 for a book, even if you only sell it back for around $7.
Be advised that if you are selling your book via Amazon Marketplace, selling anything under $3 means taking a loss after fees and shipping.
I am a fan of paying for required books. I like being deeply involved in with my textbooks. I like taking light notes on the sides to help me remember a point. I usually do this in pencil so I can resale it. If I did the same with a rented book, they would probably fine you or something like this. There are some books that would be good rented like books you may not need as much during the semester.
In law school, I found buying used, or even sometimes new, beat the rental prices every time. The only time rental worked for me was when I needed a book for a few weeks and didn't feel like fighting over the reserved copy in the library.
The biggest tip I could offer to save money on texts? Buy the second most recent edition. Rarely was there enough of a difference to justify the cost for the newest edition and I could always double check a classmate's book or the reserved copy. I never had a problem and I saved a ton of money!
The problem with shopping around for the cheapest price is that the "required" list of books isn't always accurate, and you might not get the real story till you show up in class the first day.
So you're stuck balancing buying the cheapest book online a week before classes with showing up and hearing the professor say "Now, everything on the tests will be from lecture, but the book will be a good reference.".
Renting could help avoid that scenario, though I think buying cheap/international versions and then re-selling them is the best way to go.
When I was a teenager, my parents instituted a clothing shopping allowance at back-to-school time. I would get a couple hundred dollars to spend on the clothes I wanted/needed, and Mom wouldn't argue if it was expensive, name-brand clothes - only if they weren't modest enough for her tastes.
The end result is that either you get a few, expensive pieces, and have to make do with whatever else you have left over from last year, or you budget your money and get plenty of new things to last the entire year. I very quickly realized it made more sense to go to places like Ross rather than the department stores.
Mom and Dad also gave me a weekly allowance, but it was just enough money to pay for school lunches. If I wanted to keep that money for my own uses, they said, I'd have to pack my own lunch. It was the first budget I'd ever been on, and was very helpful. I ate lots of peanut butter sandwiches when something fun and expensive with my friends was on the horizon.
I switched from Costco to the Trader Joe's and Smart and Final combination. I think I save money. I did like Costco meats but probably didn't eat enough to pay for a membership.
Add Walmart to the TJ's and S&F mix, and I'm sure you could beat the warehouses ... if WM is convenient and moral to you.
I have been doing something for the past few years that REALLY ended the 'gimmes' at our house:
We call it 'wishes' - you can call it whatever you like :)
Each month during the school year, and each week during the summer, the kids get a turn in rotation to have it be their wish week or month. We set a spending limit [which can be whatever you like] and they decide what to spend it on - *I* decide WHEN [so I'm not running around unnecessarily and also I can plan our time so it gets the most bang for our buck] The wish is for al of us, not just the wish child of course. I post a list on the fridge of common things they enjoy and ask for with approximate costs - they can raise new things as they like.
For example, things I used to get nagged about in summer included the ice cream truck, going out to eat, visiting various museums and play places etc. After instituting wishes I would just say 'well, if you want to use your wish on it'
They quickly learned - and now they say 'oh! there's the ice cream truck! I'm definitely using my wish money for that when it's my turn!" They NEVER ask/beg/whine anymore!
It's been great - as well as a great budgeting tool - I point out things that are cheaper or more fun - such as having lunch out at the zoo [where we have a membership] rather than just a fast food joint]and I don't hold back on side costs [they need to know that parking in NYC usually costs me $40 - I'm not subsidizing LOL.
We still do things as a family that aren't wishes - but Mom and Dad pick them, thinking as always of the kids enjoyment - and no one ever gives us grief about doing what THEY want to do.
I would keep my Costco membership for the gas prices alone. The Costco is on my way to work and the gas is typically at least ten cents cheaper per gallon than the gas station by my house.
My husband and his buddies at work go during lunch for the cheap (but tasty!) pizza and pop deals. Much better deal than going to the local fast food restaurants.
I completely agree that some things are more expensive at Costco (pop for example), but so many things are not. I do a lot of cooking from scratch and I find that the ingredients can be much less expensive at the Costco. Chocolate chips and peanut butter are two things that I always buy at the Costco because I have found they are more expensive at Target (although Target has wonderful prices on some things).
So to make more profit on merchandise than a membership, each member should spend around $500 to $1000 a year or so. Not everyone spends that much every year. We definitely spent less than $1000 a year so most of the profit from us is in the membership. Anyway, the profit margin on merchandise is pretty thin, but it is not 0.
hello with the earings they take forever to make and we have to use washi paper which costs soo much money added with many layers of sealer which is not cheap too they are worth $20 for them!
Kelja and whoever else, stop you're bitterness. This is not a moral isse for those needing to walk, it's a business decision. The Banks are getting bailed out, the average household not so much. Obama's housing plan is a joke and these loan mods are very hard to get. Don't get caught up in the guilt of letting a house go back to the bank, the deal is you pay or they take the house. Period. Just cover yourself first with a Bankruptcy it will protect you from getting your wages garnished on the defiency amount, and taxes. Unfortunately, it's on your credit, but guess what you can purchase a house again in two or three years after a foreclosure or bankruptcy. FHA loans 2 years...and you get the same loan terms as those with great credit.
> these stores make no profit on their merchandise
YES! This may seem counter-intuitive but it is absolutely true. The average mark-up at Costco is so low that once you factor in cost of goods, operating expenses and taxes, essentially NO profit is made on merchandise sales.
You further write:
> If people utilized their memberships more you should see more profit coming from merchandise instead of membership even if the margin is small.
NO! (And herein lies the breakdown of your argument and the source of my confusion over your reasoning.) Profit on merchandise sales, for all intents and purposes, is ZERO. You will not see more profit on greater sales when the profit margin is zero. $1 x ZERO = ZERO, and $1 million x ZERO = ZERO.
In short, Costco is successful in large part because they are "giving away merchandise at cost." (With cost = cog + operating expenses + taxes.) What they are SELLING (and earning pure profit on), are the annual memberships.
I like your example calculation, good one! So simple to use. As a retired person, I use the 4% draw as well off of my nut. I'm surprised to find that I need MUCH LESS money than I thought during retirement, and i'm only in my mid-40s.
The answer is definitely yes. It's just let renting your cap and gown during graduation. Heck, you can go one step farther to rent the wedding dress and tux! All a waste of money.
The logic is pretty simple. If people utilized their memberships more you should see more profit coming from merchandise instead of membership even if the margin is small. The fact that pretty much all the profits come from memberships means that either a) these stores make no profit on their merchandise or b) people are not buying enough things for these stores to make a profit beyond the membership fee. I am probably the customer that doesn't use the stores enough for them to make more profit on the merchandise, but other customers do give these stores a bigger profit
Thanks for the reply Xin Lu. I am very aware that club stores derive virtually 100% of their profits from membership fees and essentially ZERO percent profit from merchandise sales, after accounting for operating costs and taxes. I just don't follow your implied causality that BECAUSE club stores earn their entire profit from annual membership fees, that THEREFORE members are "under-utilizing" their memberships. How would "more utilizing" of the membership over the course of a year change the fact that all profits come from the annual membership fee? If we agree that no profits come from sales and all profits come from annual membership fees, a person could "utilize" (purchase merchandise) in the amt of $1./year, or $1MM/yr, and the profit to the company would still be the same, because profit = membership fee. Sorry, maybe it's me, but I just don't see your logic regarding the connection between the company's source of profit and the extent to which people "utilize" their memberships. Thank you.
For us having a Executive card brings us better benefits for things outside of just warehouse shopping. I get free roadside assistance by having car insurance thru Costco and I get other benefits for my car insurance. Knowing that I probably wouldn't pay just $100 year (the executive membership fee) for roadside assistance here in WA we decided it was best for us.
But No, we dont' get back $100 for the 3% back per year. Which sucks because you'd think we'd at least get close because we do a lot of our shopping there....well we did.
Its a love hate relationship for us with Costco. Some stuff hands down is cheaper but other stuff its so much more expensive if I had just waited until it went on sale at a local grocery store.
BUT because we get such benefits as having free roadside assistance on our car insurance its worth the membership fee. (this is mainly because my hubby doesn't exactly have the best driving record! this might not be as cost effective for other drivers out there)
The value depends on what you want to get out of it too.
I rented with Chegg.com for the first time this semester and have been happy with the results. If I decide I want to keep the book after taking the class, it's an option for an additional fee. I like the non-hassle of reselling too.
I used bigwords.com to find the best prices, which led me then to Chegg. With Bigwords.com you can also exclude international copies which can lead to problems.
Chegg is on twitter too, with some savings options if you want to contact them. I got a 5% discount, which saved the shipping costs.
What I'd find in my shower, I wouldn't want displayed to the world.
A friend approached me, and asked for help buying her books for university. Her student loan was delayed, and was due in any day now. I've been there, and managed anyway, so I agreed. Well, a few months went by and my partner's dad had another bad heart attack, and somehow my partner needed to get back to see him.
Not only had the friend never intended to repay me, she had been denied student loans because she owns her own house. And because I asked to be paid back, and wasn't as popular as she was (likely because I didn't give parties, being one of a pair living on one person's student loans), I was very quickly ostracized from my only social group.
Having nowhere to go, having nobody to talk to, having stress from my partner's father's poor health, it's not really a surprise that I was soon diagnosed with major depression and consequent to my depression, debarred from university.
That was a very expensive $500. I'm not sure I can ever forgive any of them, the friend who lied to me or all those who turned their backs on me.
I lend friends money, but only as much as I can survive without, and I never expect it to come back. I've been pleasantly surprised, but never again so badly disappointed.
I had a friend ask to borrow money, and after pretty much begging my husband he agreed to the loan. But I was upfront with my friend - this money was coming from our adoption fund and thus we really needed it back. She made lots of promises and thanked us.
To date we've only seen a small fraction of that money back. I really don't think we'll see any more of it.
My new policy - never loan money. To anyone. Period.
I've used Chegg, bought on Amazon Marketplace and resold books.
It really boils down to availability. The books I've rented on Chegg were because nothing else (other than the $120 new edition) was available Amazon.
Usually I go for the marketplace, one edition or two back depending on the book and the class. Some required course which has nothing to do with my focus of studies, I go for the oldest and cheapest.
As far as reselling, don't expect huge profits. It all depends on the book. Many times there's an enormous glut of books on there for under $1-$5. Other times, you can set your price but may have to wait 6-8 months for a sale.
It does feel good when you know you only paid $15 for a book, even if you only sell it back for around $7.
Be advised that if you are selling your book via Amazon Marketplace, selling anything under $3 means taking a loss after fees and shipping.
I am a fan of paying for required books. I like being deeply involved in with my textbooks. I like taking light notes on the sides to help me remember a point. I usually do this in pencil so I can resale it. If I did the same with a rented book, they would probably fine you or something like this. There are some books that would be good rented like books you may not need as much during the semester.
In law school, I found buying used, or even sometimes new, beat the rental prices every time. The only time rental worked for me was when I needed a book for a few weeks and didn't feel like fighting over the reserved copy in the library.
The biggest tip I could offer to save money on texts? Buy the second most recent edition. Rarely was there enough of a difference to justify the cost for the newest edition and I could always double check a classmate's book or the reserved copy. I never had a problem and I saved a ton of money!
The problem with shopping around for the cheapest price is that the "required" list of books isn't always accurate, and you might not get the real story till you show up in class the first day.
So you're stuck balancing buying the cheapest book online a week before classes with showing up and hearing the professor say "Now, everything on the tests will be from lecture, but the book will be a good reference.".
Renting could help avoid that scenario, though I think buying cheap/international versions and then re-selling them is the best way to go.
When I was a teenager, my parents instituted a clothing shopping allowance at back-to-school time. I would get a couple hundred dollars to spend on the clothes I wanted/needed, and Mom wouldn't argue if it was expensive, name-brand clothes - only if they weren't modest enough for her tastes.
The end result is that either you get a few, expensive pieces, and have to make do with whatever else you have left over from last year, or you budget your money and get plenty of new things to last the entire year. I very quickly realized it made more sense to go to places like Ross rather than the department stores.
Mom and Dad also gave me a weekly allowance, but it was just enough money to pay for school lunches. If I wanted to keep that money for my own uses, they said, I'd have to pack my own lunch. It was the first budget I'd ever been on, and was very helpful. I ate lots of peanut butter sandwiches when something fun and expensive with my friends was on the horizon.
I switched from Costco to the Trader Joe's and Smart and Final combination. I think I save money. I did like Costco meats but probably didn't eat enough to pay for a membership.
Add Walmart to the TJ's and S&F mix, and I'm sure you could beat the warehouses ... if WM is convenient and moral to you.
I have been doing something for the past few years that REALLY ended the 'gimmes' at our house:
We call it 'wishes' - you can call it whatever you like :)
Each month during the school year, and each week during the summer, the kids get a turn in rotation to have it be their wish week or month. We set a spending limit [which can be whatever you like] and they decide what to spend it on - *I* decide WHEN [so I'm not running around unnecessarily and also I can plan our time so it gets the most bang for our buck] The wish is for al of us, not just the wish child of course. I post a list on the fridge of common things they enjoy and ask for with approximate costs - they can raise new things as they like.
For example, things I used to get nagged about in summer included the ice cream truck, going out to eat, visiting various museums and play places etc. After instituting wishes I would just say 'well, if you want to use your wish on it'
They quickly learned - and now they say 'oh! there's the ice cream truck! I'm definitely using my wish money for that when it's my turn!" They NEVER ask/beg/whine anymore!
It's been great - as well as a great budgeting tool - I point out things that are cheaper or more fun - such as having lunch out at the zoo [where we have a membership] rather than just a fast food joint]and I don't hold back on side costs [they need to know that parking in NYC usually costs me $40 - I'm not subsidizing LOL.
We still do things as a family that aren't wishes - but Mom and Dad pick them, thinking as always of the kids enjoyment - and no one ever gives us grief about doing what THEY want to do.
I would keep my Costco membership for the gas prices alone. The Costco is on my way to work and the gas is typically at least ten cents cheaper per gallon than the gas station by my house.
My husband and his buddies at work go during lunch for the cheap (but tasty!) pizza and pop deals. Much better deal than going to the local fast food restaurants.
I completely agree that some things are more expensive at Costco (pop for example), but so many things are not. I do a lot of cooking from scratch and I find that the ingredients can be much less expensive at the Costco. Chocolate chips and peanut butter are two things that I always buy at the Costco because I have found they are more expensive at Target (although Target has wonderful prices on some things).
You gave a balanced perspective, but I wouldn't say it's any greener to rent than it is to buy and resell, except the tree thing.
Lmao, plus fifty points, dude!
Costco and BJ's merchandise margin is around 10 to 14% according to this article: http://www.istockanalyst.com/article/viewarticle/articleid/3088758.
So to make more profit on merchandise than a membership, each member should spend around $500 to $1000 a year or so. Not everyone spends that much every year. We definitely spent less than $1000 a year so most of the profit from us is in the membership. Anyway, the profit margin on merchandise is pretty thin, but it is not 0.
hello with the earings they take forever to make and we have to use washi paper which costs soo much money added with many layers of sealer which is not cheap too they are worth $20 for them!
Kelja and whoever else, stop you're bitterness. This is not a moral isse for those needing to walk, it's a business decision. The Banks are getting bailed out, the average household not so much. Obama's housing plan is a joke and these loan mods are very hard to get. Don't get caught up in the guilt of letting a house go back to the bank, the deal is you pay or they take the house. Period. Just cover yourself first with a Bankruptcy it will protect you from getting your wages garnished on the defiency amount, and taxes. Unfortunately, it's on your credit, but guess what you can purchase a house again in two or three years after a foreclosure or bankruptcy. FHA loans 2 years...and you get the same loan terms as those with great credit.
One final attempt to clarify this.
You write:
> these stores make no profit on their merchandise
YES! This may seem counter-intuitive but it is absolutely true. The average mark-up at Costco is so low that once you factor in cost of goods, operating expenses and taxes, essentially NO profit is made on merchandise sales.
You further write:
> If people utilized their memberships more you should see more profit coming from merchandise instead of membership even if the margin is small.
NO! (And herein lies the breakdown of your argument and the source of my confusion over your reasoning.) Profit on merchandise sales, for all intents and purposes, is ZERO. You will not see more profit on greater sales when the profit margin is zero. $1 x ZERO = ZERO, and $1 million x ZERO = ZERO.
In short, Costco is successful in large part because they are "giving away merchandise at cost." (With cost = cog + operating expenses + taxes.) What they are SELLING (and earning pure profit on), are the annual memberships.
I like your example calculation, good one! So simple to use. As a retired person, I use the 4% draw as well off of my nut. I'm surprised to find that I need MUCH LESS money than I thought during retirement, and i'm only in my mid-40s.
Shogun
The answer is definitely yes. It's just let renting your cap and gown during graduation. Heck, you can go one step farther to rent the wedding dress and tux! All a waste of money.
Shogun
The logic is pretty simple. If people utilized their memberships more you should see more profit coming from merchandise instead of membership even if the margin is small. The fact that pretty much all the profits come from memberships means that either a) these stores make no profit on their merchandise or b) people are not buying enough things for these stores to make a profit beyond the membership fee. I am probably the customer that doesn't use the stores enough for them to make more profit on the merchandise, but other customers do give these stores a bigger profit
Thanks for the reply Xin Lu. I am very aware that club stores derive virtually 100% of their profits from membership fees and essentially ZERO percent profit from merchandise sales, after accounting for operating costs and taxes. I just don't follow your implied causality that BECAUSE club stores earn their entire profit from annual membership fees, that THEREFORE members are "under-utilizing" their memberships. How would "more utilizing" of the membership over the course of a year change the fact that all profits come from the annual membership fee? If we agree that no profits come from sales and all profits come from annual membership fees, a person could "utilize" (purchase merchandise) in the amt of $1./year, or $1MM/yr, and the profit to the company would still be the same, because profit = membership fee. Sorry, maybe it's me, but I just don't see your logic regarding the connection between the company's source of profit and the extent to which people "utilize" their memberships. Thank you.
You know deep down it's not a good idea, otherwise you wouldn't be posting this in the first place.
Don't. Do. It!
@ydde - Thanks for the resource for Canadians! Cheers...