How can Costco Wholesale charge less for gasoline at their pumps in comparison to other filling stations?
by 
Sheriff Raff -Answerhag
ANSWERS: 7
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It's a loss leader to get people into the stores.
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It is like some kind of magnet that will attract you to the store where they will make a profit by selling you something "super size" that you don't really need. They are so big that they can afford to lose money at the gas pump.
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They don't accept credit cards (with the exception of AMEX) which saves them $ on processing fees. They utilize their ability to buy bulk on gas just like they do on paper towels. They buy from one supplier. Gas, they say, is not used as a loss leader, but they will sell below cost if it matches a competitor. They count on volume to make up the difference in profit.
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just like the prices vary from shell to chevron to arco...I find Costco gas very comparable to arco prices.
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They buy in bulk, they buy cheaper gas (no additives), it's generic so thay don't support a merchandising brand , for starters.
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Believe me, they don't charge THAT much less.
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because its costco
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