Like Costco and Sam’s Club, warehouse clubs operate differently from other stores. Unlike regular retailers such as Target or local grocery stores, these warehouse clubs charge people a membership fee to join. This membership creates a unique relationship between the clubs and their members. Members feel more connected and committed to these clubs because they’ve paid to join, which is not the case with other retailers.
Sam’s Club
Walmart owns Sam’s Club, but it doesn’t offer as many products or services as Walmart. Despite this difference, Sam’s Club and Walmart focus on low prices. It is one of their primary objectives.
Sam’s Club’s website is very similar to Amazon’s and Walmart’s, but there’s a slight difference. Sam’s Club’s website doesn’t offer free shipping for paid members like the others.
Costco vs. Sam’s Club
In many situations, the relationship between Costco and Sam’s Clubs and their members is clearer because both warehouse clubs have made a pledge to their members: They promised to offer low prices.
Costco provides a lot of information about its margin choices. It also makes its markups transparent during its quarterly financial updates with investors. This is one thing Costco never offered, only Sam’s Club.
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Sam’s Club Membership
Sam’s Club offers something Costco never did: free shipping for its Plus members. This special membership, which costs $110 a year, gives members free shipping on most items.
According to their website, the Plus membership offered the best value, especially for business owners. Its benefits included free shipping, Curbside Pickup, and early shopping hours, which helped businesses grow. However, starting August 19, there will be a change. The benefit will no longer be available for Sam’s Club Plus members.
Costco’s Club Members
Costco has the same shipping policies for both Gold and Executives members. Gold members pay $60 a year to shop at Costco. Executive members pay $120 a year. In addition to shopping, each member gets 2% cash back on most purchases. This cashback amounts up to $1,000 per year.
Executive members at Costco pay more for their membership to get better deals. This can save them a lot of money, even if they don’t get the full $1,000 in cash-back rewards. This benefit is probably why, by the end of the third quarter, Costco had 34.5 million Executive members, an increase from the 661,000 members from the previous quarter.
Sam’s Club: Plus Memberships
Chief Financial Officer Gary Millerchip made a statement concerning the warehouses during the call. He stated that executive members make up more than 46% of paying members and contribute to 73.1% of global sales.
Sam’s Club’s Plus membership used to offer a 2% cashback reward and free shipping. However, a new pricing plan has replaced the free shipping benefit.
Sam’s Club: A New System
Under the new system, the warehouse club will charge $8 for orders under $50, whether you choose same-day delivery (for qualifying items) or shipping. Costco’s shipping prices are more complicated.
When you shop online, the Warehouse Club treats its grocery and non-grocery products as two different categories. You can buy items from both categories in one go, but each category has its own shopping cart and total cost. For grocery items, the club encourages you to order more, but this isn’t about spending more money. Instead, it focuses on the quantity of items you’re buying.
Free Delivery Benefits
“When we can send out a complete box of items, we save money on shipping costs. We pass those savings on to you by not charging for delivery,” the company shared. “Also, we handle non-perishable items (things that don’t spoil) differently from perishable items (things that can spoil).” The company said, “If you order non-perishable pantry items, there is a $3 delivery fee for each item. However, this delivery fee is waived if you spend $75 or more, not including tax.”
When it comes to non-grocery items, the situation can be more complicated, but Costco is very clear about all fees on its website.
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Costco: Shipping Fee
Every product listed on Costco.com comes with its own shipping fee. However, many items are shipped to customers for free. If a product has a shipping charge, you’ll see it on the product’s detail page.
The details are next to the product image on the website,” the company explained. Costco also provided a full explanation of how they determine shipping charges for non-grocery items.
How Does Costco Determine Their Shipping Charges for Non-Grocery Products
Every vendor and manufacturer sets their own shipping fees, and Costco can’t change or remove these fees. Sometimes, even buying the same item might be shipped from different places based on where the items are in stock.
The company explained that, as a buyer, you are charged for each item and any shipping fees when the item is shipped. This is why you might see several charges on your financial statement.
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