The One Thing Some People Feel Costco Has That Amazon Doesn't
You may have not heard of Charlie Munger, but you've definitely heard of his business partner, Warren Buffet. The two were previously huge investors in Costco and Munger has been a director for the brand since the late 1990's, according to Financhill. Additionally, he personally, apart from Buffet, owned $60 million-plus Costco stock as of last year. Recently, Munger was quoted as saying, "Costco, I do think, has one thing that Amazon does not. People really trust Costco to be delivering enormous values. That is why Costco presents some danger to Amazon — because they've got a better reputation for providing value than practically anybody including Amazon" (via Yahoo! Finance).
And that's true, to a point. People go to Costco because they think they're getting an awesome deal on a bulk pack of a million granola bars. People go to Amazon because they want a cheap home good delivered within 24 hours. While Amazon offers cheap and fast, Costco offers, in many cases, a good product or quantity for a good price.
But why are Amazon and Costco even competing?
When Munger's quote was posted as a comment on Reddit, one user noted, "As a customer of both business[es], strangely, I don't fully see them as 'competitors.' Both of them are very useful for specific things. Amazon is great if I just want one specific thing and don't want to bother shopping. At the opposite, I love going to Costco every once in a while to stock up on a bunch of things at a discount, like garbage bags, laundry, dry foods, etc." Many other Redditors agreed.
The other general consensus on the thread, though? Even if value isn't the top thing that Amazon is known for offering, the online retailer's value has still been plummeting regardless. Commenters mention a lack of quality control and a rise in fake, knock-off products, as well as the simple fact that Amazon doesn't seem to have as many good deals as it once did. So, regardless of whether or not Costco and Amazon are direct, head-to-head competitors, could the former be giving the latter a run for its money? If you're to trust Munger, that's exactly the case.