Costco makes $200m a month selling gold

Costco has indeed become a significant player in the gold market, generating substantial revenue from the sale of gold bars. According to various sources, Costco's venture into selling nearly pure 24-karat gold bars, which began last fall, has seen the company earning between $100 million to $200 million monthly from these sales[1][2][3][4][5][6][7][8][9]. This revenue stream has emerged amidst a backdrop of economic uncertainty and inflation, driving consumer interest towards gold as a stable investment option.

The gold bars, priced at about $2,000 for a 1-ounce bar, are sold at approximately 2% above the spot price, offering a competitive option for Costco members interested in investing in gold[1][2][3][4]. Despite the significant sales figures, analysts from Wells Fargo have suggested that this venture might be a "very low profit business at best" for Costco, given the pricing and shipping costs involved[1][2][4][5]. This assessment indicates that while the sales figures are impressive, the profit margins on these sales may not be substantial.

Costco's success in the gold market is attributed to several factors, including its aggressive pricing, the high level of trust it enjoys among its customers, and the convenience it offers to members looking to invest in gold[3][4][5][6]. The retailer has also limited the purchase of gold bars to five ounces per customer, which could be a measure to ensure wider access to its members[2].

The surge in Costco's gold sales also reflects broader market trends, with gold prices experiencing significant increases. For instance, spot prices for gold rose more than 13.70% since the start of 2024[1], and gold prices topped $2,300 per troy ounce for the first time ever this month, marking a 25% increase over the last month[19]. This rally in gold prices underscores the metal's appeal as a hedge against inflation and economic instability, factors that have likely contributed to the heightened consumer interest in Costco's gold offerings.

In summary, Costco's foray into selling gold bars has not only generated substantial monthly revenue but also highlighted the retailer's ability to diversify its product offerings and tap into the growing consumer interest in precious metals as investment vehicles.

Citations:
[1] https://www.usatoday.com/story/money/2024/04/09/costco-gold-bars-200-million/73266179007/
[2] https://abcnews.go.com/GMA/Living/costco-makes-hundreds-millions-24-karat-gold-bar/story?id=109131981
[3] https://www.cnbc.com/2024/04/09/costco-selling-up-to-200-million-in-gold-bars-a-month-wells-fargo-estimates.html
[4] https://www.cbsnews.com/news/costco-gold-bar-sales-inflation-silver-coins-2024/
[5] https://www.seattletimes.com/business/why-are-gold-bar-sales-surging-at-costco/
[6] https://www.nytimes.com/2024/04/11/business/costco-gold-bars.html
[7] https://www.goodmorningamerica.com/living/story/costco-makes-hundreds-millions-24-karat-gold-bar-109131981
[8] https://eu.usatoday.com/story/money/2024/04/11/costco-gold-rush-drives-interest-not-value/73282210007/
[9] https://www.axios.com/2024/04/10/costco-gold-bar-sales-wells-fargo-report
[10] https://www.cnbc.com/2023/09/27/costco-is-selling-gold-bars-and-they-are-selling-out-within-a-few-hours.html
[11] https://www.costco.com/gold-necklaces.html
[12] https://www.bankrate.com/investing/gold-at-costco-investment-buy-instead/
[13] https://www.usatoday.com/story/money/2024/03/09/costco-silver-coins-gold-bars/72910338007/
[14] https://www.youtube.com/watch?v=vIhmr8Hd-Sw
[15] https://www.costco.com/gold-jewelry-information.html
[16] https://www.costco.com/1-oz-gold-bar-pamp-suisse-lady-fortuna-veriscan-new-in-assay.product.4000186760.html
[17] https://www.costco.com/jewelry-buying-guide-metals.html
[18] https://www.costco.com/1-oz-gold-bar-rand-refinery-new-in-assay.product.4000202779.html
[19] https://www.forbes.com/sites/dereksaul/2024/04/10/whats-up-with-gold-heres-why-everyone-from-costco-to-central-banks-is-rushing-in/?sh=58da9c857a48
[20] https://wjdx.iheart.com/content/2024-04-11-costcos-gold-bars-have-been-making-customers-tons-of-money/