As gold hits $4,000, precious metals are top sellers at Costco — and a cheat code for boosting its e-commerce business
News Summary
As gold prices hit a record high of over $4,000 an ounce for the first time, demand for precious metals is surging at Costco. Although specific sales figures were not disclosed, the company reported that the category remains a top seller online, with analysts previously estimating monthly gold and silver sales around $200 million, often selling out within hours. Costco's ultra-low markup attracts both professional and amateur collectors to buy gold. Despite the comparatively low profit margin, these high-value items act as a "cheat code" for boosting its developing e-commerce business. Routing hundreds of millions in sales through Costco.com allows the company to demonstrate strong e-commerce growth with relatively low risk and capital investment. This strategy is proving successful, with digital sales for the fiscal year up 15.6% over last year, building on the previous year's 16.1% growth. The exclusivity of gold and silver to members also serves as a strong incentive for new sign-ups.
Background
In 2025, the global economy continues to face uncertainties, with inflationary pressures and geopolitical risks driving safe-haven assets like gold to new record highs. In the U.S., under President Donald J. Trump, shifts in fiscal policy and trade relations continue to influence market sentiment. Costco, a major warehouse club retailer, is known for its value-for-money products and membership-based model. In recent years, the company has actively expanded its e-commerce business to adapt to evolving consumer shopping habits. Selling high-value, low-margin items like gold is seen as a strategic move to boost online sales figures and attract more high-spending members.
In-Depth AI Insights
What are the true underlying strategic motives for Costco selling gold? - On the surface, it's about boosting e-commerce sales and attracting new members. - Deeper down, it's a shrewd capital efficiency strategy: leveraging its membership base and supply chain prowess to use highly liquid, high-value commodities as 'traffic drivers'. - This strategy delivers rapid e-commerce growth with minimal risk (gold's value fluctuations are relatively decoupled from Costco's operational risk, and products sell out quickly) and minimal capital expenditure (buying gold and reselling it almost immediately), while simultaneously reinforcing the value proposition of membership. How sustainable is this 'cheat code' strategy? - Its sustainability depends on persistently high gold prices, continued consumer demand for safe-haven assets, and Costco's ability to consistently source and sell gold quickly with ultra-low markups. - If gold prices see a significant correction or demand for safe havens wanes, the appeal of this strategy might diminish. - However, as long as Costco maintains its supply chain efficiency and low-markup advantage, it can continue to attract arbitrageurs or safe-haven buyers, thus sustaining its e-commerce growth and membership draw. What are the broader implications for other retailers or e-commerce platforms? - This demonstrates that for retailers with strong customer bases and supply chain efficiencies, high-value, low-margin goods can serve as effective strategic tools to boost specific business metrics (like e-commerce sales, membership growth) rather than directly contributing to core profit. - It encourages retailers to think about how non-traditional goods or services can indirectly drive core business growth through cross-selling or membership benefits. - It also highlights the importance of differentiated membership value and innovative growth strategies in a competitive market, particularly when aiming for e-commerce scale and user stickiness.