Is it obvious or not obvious why some stores charge customers (annual for eg.) a fee in order to sell them their products?

I worked in a grocery store that was a Franchise and that company charges a fee to have the ideal placement on the shelves, or near the cash register , knowing that some people (or most) buy on impulse.
That is why adverting of a product with colorful and eye catching themes becomes very important .

@Inspired_2write by “customers” I meant the end users not the retailers.

By the way, I’m asking if the store is saying we need/want to charge, does it not mean that otherwise it would lead to too many more customers, more $, and that that’s not good?

Who does this? It would have to be a large company, or are you thinking of weird hidden pricing techniques?

I have never experienced any store charging an annual fee. If they did I guess I’d go someplace else.

Unthinkable, I would have thought this notion would be but…
I’ll let who know about it weigh in. I don’t want to mention it in case I just dreamt it,

@flo
Oh sorry I misunderstood, then in that case I believe the answer would become No, they don’t charge customers except in Credit cards who do up front mention fees.

https://www.budgetkitty.com/costco-membership-fee/
I don’t see the word annual or whatever period of time there. That,s why I didn’t want to mention the name of the store I wasn’t sure. There is a comment from a customer in the article something like “the savings are not good enough to cover the fee.”

I pay a fee for. Costco membership, but I save way more than the membership fee every year. Is that what you mean? Or are you referring to Amazon Prime, where I am essentially paying for a streaming service, free shipping and some other benefits? Again, it’s a saving.

Ok, it’s a yearly fee, another article says so.
“The company COST, +0.49% said this week it will raise its basic membership fees by $5 starting June 1, putting its “goldstar” individual membership, business and business add-on memberships at $60 per year, up from $55. Executive memberships will now cost $120, up from $110. But with that increase, Costco is also raising its maximum annual 2% reward to $1,000 from $750 for that membership. This is the first time Costco has increased its membership since 2011.”
https://www.marketwatch.com/story/is-costcos-new-60-annual-membership-fee-worth-it-2017-03-03

I guess I have never been to Costco.

I do get a Goodwill discount card every year and it’s worth it. Also, I subscribe to Prime. Also worth it. But in neither situation am I required to get a membership to shop with them.

I believe @flo is referring to membership-only, warehouse-style retailers such as Sam’s Club and Costco.

As for why they charge a fee – because they can and people are willing to pay it.

Years ago, when I was in my early 20’s and still living with my parents, my dad had a membership to Sam’s Club as one of the perks his employer offered. We went there one time and found it not worthwhile for us. Never used that membership again.

When I had a daycare I shopped for groceries at Sam’s once a month. I got 5 shopping carts full of food. I happily paid their membership fee! Plus I could deduct it at tax time.

The customers have to spend more time to find things (they save the store $, b/c of fewer employees ) and they get to pay a fee.

You are wrong, @flo. I track my expenditures carefully (of everything) and Costco saves me a lot of money, well more than the fee. I do a lot of basic food shopping there, as well as some things that I need from time to time (toiletries and the like).

All stores scatter their product through out the store, not just the ones who charge and annual fee. It’s a marketing strategy to encourage impulse buying.

And why would they have fewer employees?

@Inspired_2write I hope you’re reading the articles (even the one that doesn’t mention the period (yearly), so, it’s not about credit card. And let me know if you can see why more customers (no charge) means they make less $ or something like that.

@flo I suppose they are using psychology on customers who feel that they belong to special group and have privileges ( supposedly) that others do not.
It does not mean that they can keep these customers forever, as people will go elsewhere out of convenience or bargains?

CostCo charges $69 membership fees per year. With out them the customers would buy a meal, from their food court, and a cooked chicken for a discount price of $5 and would bleed the store dry of profits.

The big box stores began the practice in the days before the internet, while at about the same time the supermarkets began distributing those loyalty cards, and I think both practices serve the same purpose of gathering information on your shopping habits. In the case of big box membership, the executive membership fee at costco, I always use the annual 2% rebate check to cover the membership fee & walk away with the surplus of at least $200.

I gladly pay for Costco Executive membership (was 100 a year, will pay it when it goes up, too). Some people tell me they don’t need Costco or other wholesale stores because they don’t need that much food. I don’t need that much food, either, as it’s just me and a child, but here’s what I do buy at Costco:
Milk about 40% less than a regular grocery store
K-cups -about 30 or 35 dollars for 100
fruit – berries, etc.
cookies and crackers
eggs
butter
garbage bags (every household will eventually use 100 garbage bags)
toilet paper (ditto)
paper towels (ditto)
cat food (canned food, dry food)
jeans – Gloria Vanderbilt, about 12 on sale
clothes
shampoo (32 oz bottles, about 7 dollars)
perfume
prescription eyeglasses in the optical department
eye exams from the optician
pharmacy
photo printing (cards, photo products, etc.)
liquor (at holiday time, gifts)
tires
gasoline
sneakers
bathing suits
toys and gifts at Christmas
walnuts
socks
down comforter
towels

At home, my couch is from Costco. My lamp is from Costco, my scale is from Costco. My canister steamer is from Costco.

I’m considering an international trip this summer thru Costco travel. This past holiday season I rented a car thru Costco travel.

I have a Costco credit card. This year with my Exec membership, I got back over 450 dollars. That pays for the membership fee and gives me about 350 in my pocket.

If Costco was not a good deal, people wouldn’t pay for the membership fee.

@jca2, I once bought a car through Costco. Now that was a good deal!!!

@RedDeerGuy1 No store sells their products at a loss. And, there are other stores that are less expensive to one degree or another. No such thing in my opinion that more customers equals less success.
@Inspired_2write I’m agreeing with that.

@flo YouTube video. This Is Why Costco Only Charges $5 For A Rotisserie Chicken

@RedDeerGuy1 Your link makes my point if you read the comments doesn’t it?

@flo I will read the comments now. edit. Yes it is a draw to upsell more expensive products.

“Go in there to spend $4.99 and end up spending $300”
_“went in Costco for a rotisserie chicken and came out with a living room set“_

(Dillions here sells rotisserie chicken for $4.99 too!)

I have never shopped at Costco. :(

Well, @flo, then by all means, avoid Costco. Being an intelligent grownup, I don’t tend to get swayed by the thought of a $5 chicken that will lead me to a new living room set.
Did your research also cover the fact that Costco treats its workers fairly, pays them a decent wage and benefits?
By shopping at Costco I don’t use up resources going here and there and the other place, while supporting a quality company.
But I can understand why you wouldn’t want to do that.

@canidmajor Is that a straw man argument?

@flo. No.

I also pay $80 a year for Amazon Prime. I buy lots of books.

@flo no.

@RedDeerGuy1 …a cooked chicken for a discount price of $5…

That’s a pricing strategy called “loss leader.” The low cost draws customers. The vendor’s expectation is that, after consumers have arrived, they’ll purchase other goods at regular prices, resulting in profits for the store.

The next time you go shopping for something at a deep discount, notice the item’s location. Usually, loss leaders are placed in an inconvenient place, such as the far rear of the store, so that customers need to walk past other, full-priced products.

Also, loss leaders tend to be popular items that people purchase frequently, so that customers notice the low price and make an effort – a special trip to the store – to buy. You certainly remembered a $5 cooked chicken, but you might have paid much attention to the reduced cost of a less-favored food.

^^^Yep. Milk is commonly used as a loss leader, as it’s one of the most heavily purchased food items on the market. Also, hence why the milk coolers are almost always at the back of the store.

Huh! Good point Darth. Never thought of that.

@RedDeerGuy1 That’s per what period of time?

@flo $79 per year.