When it comes to cheap gas, Costco is hard to beat. The big-box retailer consistently offers some of the lowest prices on gasoline, often undercuttings its competitors by a few cents per gallon.
Costco’s gas prices are so low that they’re often used as a barometer for other stations.
So, why is Costco gas so cheap? There are a few reasons.
1. Costco doesn’t mark up its gas
Costco doesn’t make much profit on gas sales. In fact, the company’s markup on gasoline is just 1%, while the average markup for other retailers is around 9%. This means that Costco only charges a few cents more than what it pays for the gas.
2. Costco buys in bulk
Costco is known for buying in bulk and this extends to gasoline. The company buys large quantities of gas at a time, which allows it to get a discount from suppliers. This savings is passed on to customers.
3. Low overhead costs
Another reason why Costco can offer such low prices is because it has low overhead costs. The company doesn’t spend much on advertising or branding, and its stores are relatively basic. This allows Costco to keep costs down and offer lower prices.
Conclusion:
So there you have it! These are the reasons why Costco gas is so cheap. Next time you need to fill up your tank, be sure to swing by your local Costco for the best price.
