- Gold prices hit a new record high on Wednesday of more than $3,600 per ounce.
- One popular place to buy is Costco, which sells over $200 million a month in precious metals.
- Though the markup is low, these high-value items help the company show strong e-commerce growth.
As gold prices hit new record highs, demand for the precious metal is running hot at Costco.
The price of the yellow metal topped $3,600 per ounce on Wednesday, and is driving strong sales for the wholesale club.
While the company didn’t break out exact sales figures for the products in its third-quarter earnings call in May, it said the category continued to be a top seller online.
Analysts previously estimated that the company sells around $200 million of gold and silver each month. Former CFO Richard Galanti has said the supply usually sells out “within hours” of its release.
When the metal’s spot price rises faster than the retail price, Costco’s gold inventory can move quickly, according to posts on the CostcoPM subreddit.
Costco’s ultra-low markup is a big part of the wholesale club’s appeal for professional and amateur collectors alike. One likened the club store to a “gateway drug” to gold investing, in an earlier interview with Business Insider.
But 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 developing 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: it simply buys a batch of gold and sells every ounce of it to members.
The strategy is paying off, too — digital sales for the third quarter were up 14.8% over the same period last year. That growth comes on top of last year’s 20.7% third-quarter growth over 2023, the first year Costco mentioned that it sold gold.
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 $65 membership fee on a $3,600 shopping cart of gold bullion?
Costco could reveal more details about its precious metals sales when it reports full-year earnings on September 25.
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