Rand and PAMP gold bars sold by Costco. Costco
- Gold bars and silver coins continue to show strong sales for Costco.
- The company sells an estimated $200 million per month of the metals.
Gold bars and silver coins had another quarter of strong sales for Costco.
While the company didn’t break out exact sales figures for the products in its third-quarter earnings call Thursday, it did say the category was a top seller online, alongside appliances, gift cards, and e-tickets.
Analysts estimate the company sells around $200 million of gold and silver each month, and former CFO Richard Galanti has said the supply usually sells out “within hours.”
A big part of their appeal for professional and amateur collectors alike is the fact that the bars and coins are sold at a very low markup to the metal’s spot price. (Silver coins from the US Mint fetch a slight premium, since there are tax advantages to those.)
But even though Costco’s profit on the gold and silver sales is comparatively low, these high-value items are a kind of cheat code for the wholesale club that is still trying to develop its e-commerce business.
Routing hundreds of millions of dollars in sales through Costco.com is a quick way for the company to show strong e-commerce growth with relatively low risk or complicated capital investment: they simply buy a batch of gold and sell every ounce of it to members.
The strategy is paying off too — digital sales for the quarter were up 20.7% over the same period last year, before Costco’s gold went viral.
And, since the gold and silver are member exclusives, the buzz around the metals is another way to attract new sign-ups. After all, what is a $60 membership fee on a $4,000 shopping cart of gold bullion?
### Strong Sales of Gold Bars and Silver Coins for Costco
Costco continues to see robust sales of gold bars and silver coins, with an estimated $200 million worth of these metals being sold each month. These items have become top sellers online for the company, showcasing their popularity among consumers.
### Appeal to Collectors
One reason for the appeal of Costco’s gold bars and silver coins is their low markup compared to the metal’s spot price, making them attractive to both professional and amateur collectors. Additionally, silver coins from the US Mint carry a slight premium due to tax advantages associated with them.
### Strategic E-commerce Growth
While Costco’s profit margins on gold and silver sales are relatively low, these high-value items serve as a strategic tool for the company’s e-commerce growth. By selling these metals through their website, Costco can showcase strong digital sales performance with minimal risk or complex investment.
### Customer Engagement and Membership Growth
The exclusivity of gold and silver sales to members not only drives sales but also acts as a way to attract new sign-ups. The buzz surrounding these metals can spark interest from potential customers, highlighting the value proposition of a Costco membership when purchasing high-ticket items like gold bullion.
