This One Costco Item Is Reportedly Generating Up to $200 Million a Month for the Retailer Gold bars are flying off the shelves.
By Emily Rella
Opinions expressed by BIZ Experiences contributors are their own.
Discount membership club Costco is known for cultivating a cult-like following over certain products and for its prices on bulk items.
But there's one unexpected product that's generating a jaw-dropping amount of revenue (read: hundreds of millions) for the retailer — gold bars.
Wells Fargo analysts estimate that Costco could now be generating between $100 and $200 million a month after debuting one-ounce, 24-karat gold bars last October.
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This is a massive jump considering the gold bars reportedly brought in $100 million in the entire fiscal first quarter of 2024 that ended in November of 2023.
The prices of the bars vary based on market value.
via Costco
"Our work suggests there has been significant interest given [Costco's] aggressive pricing and high level of customer trust," Wells Fargo equity analyst Edward Kelly reportedly said in a note to clients.
Costco limits purchases to five bars per person while also offering 2% cash back to executive members of the discount club and another 2% if members use a Citigroup credit card.
Gold prices have been surging since March, hitting record highs with the price of spot gold reaching $2,364 an ounce on Tuesday.
The gold bars are also popular with a younger audience, which has been reflected on social media. There are a slew of viral posts dedicated to finding and purchasing the gold bars, which sell out during nearly every restock.
"Priced below spot!?!?!? And you could get 4% back on top of that? Seems too good to be true," one Reddit user wrote about the deal.
"I hope Costco can keep this up a few more years," another said. "We need a few players like Costco to change the premium culture."
Others compared the deal to Costco's famed $1.50 hot dog and soda — it might not make much of a profit for the retailer, but it certainly gets people talking and in the door.
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"Pricing at that level and shipping costs suggests it's a very low-profit business at best," Wells Fargo suggested in its note.
Costco was up nearly 46% year-over-year as of Wednesday morning.
