Holiday Pricing Shootout: Costco Vs. Amazon

The outcome wasn't even close
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The outcome wasn't even close
shootout

Costco and Amazon are two of the top bastions of discount retail, with the warehouse club commanding a lofty place in the brick-and-mortar hierarchy and the e-tailer lording over digital.

Each takes a different merchandising approach: Costco’s good-better-best assortment is narrow and opportunistic, while Amazon aims to have the world’s largest selection.

Nevertheless, both are known for their low-to-no-margin pricing, which is subsidized in Costco’s case by its annual membership fees, and for Amazon by its separate and highly profitable web services business.

To see who outdoes who on price, student financing site LendEDU compared a 38-item basket of identical products in a one-to-one price match competition on Nov. 13, using the lowest available price on Amazon given its choice of direct and third-party sales. Categories included tech, appliances, food and beverage, and miscellaneous apparel and household goods.

“Once and for all, we wanted to squash the great debate: Does Costco or Amazon save the consumer more money?” explained LendEDU research analyst Mike Brown. His finding: the total ticket was 12.1 percent higher when ordering the items on Amazon than by purchasing them at a Costco store in Long Island City, N.Y.

Surprisingly, Costco undersold Amazon in every product category, Brown discovered. The difference was greatest for food and beverage items, which were priced 95.8 percent higher at Amazon, and was most negligible in tech, where the retailers were evenly matched.

Tech items included a 55-inch Samsung 4K TV, which sold for $1,600 at Costco and $1,598 at Amazon, and a 256GB Apple 12.9-inch iPad Pro, which was $900 at Costco and $949.25 at Amazon.

Appliances, including floor care, a Whirlpool refrigerator and countertop devices, were 30 percent cheaper at Costco. Among the items, the 25-square-foot French door fridge sold for $1,400 at Costco, a $400 savings vs. Amazon, while a Panasonic microwave oven retailing for $100 at the warehouse club was twice the price online (see charts, below).

Source: LendEDU

Source: LendEDU

Source: LendEDU

Source: LendEDU

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