Most of us might not think of Costco as a luxury brand. However, with their ability to influence consumers to purchase high end luxury goods for less they rule this niche market. Hats off to Costco many attempted to venture into the luxury for less niche but did not strike gold.

What makes Costco so appealing in this specific luxury market of offering luxury goods at a discount rate may be their marketing approach. It could be that a warehouse club membership is privileged and not a coupon reward. Luxury consumers like V.I.P savings a difference from coupon offers. The luxury consumer is more concerned about quality over the cost of luxury goods.

Costco manages to offer the both of best worlds. A membership club which allows the luxury consumer to feel privileged. Generally, such membership comes with exclusive offerings. Costco offers membership to the masses while only a select few will be able to take advantage of purchasing high end luxury goods for less.

So what does Costco offer when it comes to luxury for less? Costco, the subject of a CNBC documentary “The Costco Craze,” sometimes employs this strategy. That has led some companies to sue the retailer, but most have been unsuccessful. For example, Coach, Chanel, and Burberry handbags, Herman Miller chairs, and Waterford crystal have been known to grace Costco’s shelves over the years.

In some cases, the warehouse clubs partner with high-end brands to offer its members exclusive products at discounted prices. However, some retailers may also obtain items through gray-market buying — a controversial practice in which retailers circumvent manufacturers and buy products through third-party distributors.

Costco’s founder and former CEO Jim Sinegal has no qualms procuring goods through the gray market.

“If the supplier is refusing to sell to us, there’s only one reason why they’re refusing to sell to us. And that’s because the price that we bring the goods to market,” he told CNBC.

The real problem, he said, is “when people try to manipulate the market so that they can control prices and keep prices artificially high. That’s wrong.”

The selection of luxury goods in warehouse stores varies from region to region and store to store. Sometimes finding them is all about luck.

No matter. Just toss them all into a doublewide shopping cart and head to the checkout line.

Thinking about buying a Mercedes-Benz SL550 Roadster?

Costco price: $105,245

Through partnerships with local authorized dealers, Costco members receive a reduced price on cars that’s meant to be haggle free.
Costco’s website lists the makes and models in its inventory, from a Toyota Prius to a Porsche Roadster. It then connects members to a local dealer, who offers a pre-negotiated Costco quote.

For a new 2012 Mercedes-Benz SL550 Roadster, with additional accessories such as a black leather interior and a panorama roof with sun shade, as well as added costs such as a gas guzzler tax, we were quoted 5.8 percent off the MSRP price of $111,725. Costco members are also eligible for additional manufacturer rebates and special financing.

Might be interesting to know Costco offers luxury for less on Remy Martin Louis XIII Cognac, Betsey Johnson Frames, Wedding Dresses by Kirstie Kelly, and a full list of luxury items sold for less.


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