November 26, 2020

Your Money: Adding It Up: Amazon Ship vs. Costco Shop

Amex has a couple of different Costco-branded credit cards. The ones currently available to new customers earn 2 percent back on all travel purchases, 3 percent on all restaurant charges and at least 3 percent on gasoline (at any station, not just Costco ones) up to certain annual spending limits. Plus, you get 1 percent cash back for spending everywhere else.

The check arrives attached to the bill for February, but it comes with a catch: You have to go to Costco to redeem it. You can just collect cash, turn around and walk out. But Costco is clearly hoping that most people will see the check as a good excuse to go shopping right then and there. And that’s what most people seem to do.

I have this card and love it. But I’ve also begun to question the value of the time it takes for an expedition to one of these stores. And if you shop at Sam’s Club or BJ’s, Costco’s competitors, you may be wondering, too.

After all, the older you get, the more valuable your time seems. And going to Costco, even though it’s just a couple of miles from my home, is generally a two-hour round trip by the time the driving, the shopping, the waiting in line, the loading of the car and the unloading back home are done.

In 2007, meanwhile, Amazon.com introduced a service called Subscribe Save. The premise is simple: If you agree to get a recurring shipment of an item, Amazon will cut 15 percent off its normal price and send it to you every one, two, three or six months without charging the standard shipping rate. So I subscribed to toilet paper, which makes for a great story and good fun for children when three months’ worth arrives and become a temporary tower or a fort on the living room floor.

Ever since the toilet paper subscription (and later, the paper towel one) started coming, I’ve wondered what it would be like to subscribe via Amazon to everything I get at Costco and never set foot in the place again, except to cash my check each year.

So this year, $304.50 refund check in hand, I went to Costco with a list of items that most households need to replenish every so often. I recorded the prices. Then, I compared them with identical items at Amazon, looking in particular for the ones among the 40,000 or so that are now available for subscription.

My guess is that many Costco customers would find that any savings they gain by shopping there is eliminated and then some when they consider the value of the time spent going to and fro many times a year. That’s time they would win back if they subscribed to those same items at Amazon and then never had to think again about running out of them.

My Costco list included the following: Huggies diapers, Tide powder, Bounty paper towels, Swiffer refills, Clorox wipes, Ziploc sandwich bags and enough Duracell batteries to power multiple electronic devices for many months.

There was also Dove soap, Lubriderm lotion, Tampax, Mach 3 Turbo razor blades and enough house brand ibuprofen to kill off hundreds of headaches, among other things.

Then, I spent some time on Amazon’s site and recorded the per unit price for each of these items. Almost all were available at the discounted subscription price, which manufacturers help Amazon pay for (so excited are they by the idea of a recurring pipeline into people’s homes and wallets).

Setting up Amazon subscriptions for the first time probably takes about as much time as a round trip to Costco. But, according to Doug Herrington, vice president of consumables for Amazon, many people start with just a few items. “They add over time,” he said. “They start with one big schlep factor, like toilet paper or diapers.”

Over time, you may need to adjust your delivery dates So what does that 15 percent discount get you? My sample basket of goods, enough for a three-month supply for a family of four, cost $251 at Amazon. At Costco, it was $208, representing a 17 percent savings.

Costco was tied or cheaper on every item, occasionally by a lot. Amazon, for instance, isn’t competitive on large containers of cleaning liquids of various sorts, since it’s just too expensive to ship those sorts of things.

Article source: http://feeds.nytimes.com/click.phdo?i=0a79f26d7a5255a28ba1dff2d00b8d96

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