Costco doesn’t need to pay for advertising
Jillian Cain Photography/Shutterstock
When you really think about it, you’ll realize that you’ve probably never seen a Costco ad in print or on TV, but you’ve definitely heard about Costco from others. This word-of-mouth advertising is the best kind — completely free. And if you ask Costco it’s just as effective as spending big bucks for a radio spot or other high traffic appearance.
Another benefit of Costco choosing not to advertise is the savings, which is about 2% a year, according to The New York Times. This 2% helps Costco keep lower prices for shoppers (per Business Insider). During an interview in 2013, Jim Sinegal, one of the Costco co-founders, said Costco was built on the idea that advertising is “evil … because it costs money; anything that is going to raise our price on merchandise is bad” (via The Motley Fool). Low prices attract people like moths to a flame and we can’t blame them. Thanks to this strategy, Costco can send promotional mail out to members only and prompts Costco celebrity super fans, like Kris Jenner, spread the word.
The Real Reason Costco Doesn’t Advertise
Graham Drew Photography/Shutterstock
By Hannah Beach/Updated: April 10, 2022 7:56 pm EST
However, not all businesses spend big bucks on advertising. Costco, for example, doesn’t even bother with commercials or billboards, or any ads at all for that matter. But why not? Doesn’t Costco need to market itself in order to compete with other stores? Well, no, not really.
Costco doesn’t need to pay for advertising
Jillian Cain Photography/Shutterstock
When you really think about it, you’ll realize that you’ve probably never seen a Costco ad in print or on TV, but you’ve definitely heard about Costco from others. This word-of-mouth advertising is the best kind — completely free. And if you ask Costco it’s just as effective as spending big bucks for a radio spot or other high traffic appearance.
Another benefit of Costco choosing not to advertise is the savings, which is about 2% a year, according to The New York Times. This 2% helps Costco keep lower prices for shoppers (per Business Insider). During an interview in 2013, Jim Sinegal, one of the Costco co-founders, said Costco was built on the idea that advertising is “evil … because it costs money; anything that is going to raise our price on merchandise is bad” (via The Motley Fool). Low prices attract people like moths to a flame and we can’t blame them. Thanks to this strategy, Costco can send promotional mail out to members only and prompts Costco celebrity super fans, like Kris Jenner, spread the word.
Another benefit of Costco choosing not to advertise is the savings, which is about 2% a year, according to The New York Times. This 2% helps Costco keep lower prices for shoppers (per Business Insider). During an interview in 2013, Jim Sinegal, one of the Costco co-founders, said Costco was built on the idea that advertising is “evil … because it costs money; anything that is going to raise our price on merchandise is bad” (via The Motley Fool).
Low prices attract people like moths to a flame and we can’t blame them. Thanks to this strategy, Costco can send promotional mail out to members only and prompts Costco celebrity super fans, like Kris Jenner, spread the word.
