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What is a Warehouse Club?

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  • Written By: Sheri Cyprus
  • Edited By: C. Wilborn
  • Last Modified Date: 25 September 2016
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A warehouse club is a retail business whose customers are members. The members pay an annual fee in exchange for receiving low retail prices on a wide range of merchandise. Studies have shown that on average, consumers who are members of a warehouse club typically save 30% off of brand name products. Different warehouse clubs vary widely in their prices and merchandise inventory, however.

A plain shopping environment with merchandise left stacked up on loading pallets is typical of a warehouse club store. The sparse furnishings reduce overhead for the company so that they can pass the savings on to their customers. Warehouse club stores typically carry a wide range of grocery products as well as some clothing, electronics, and home furnishings.

Food packages are usually very large at warehouse clubs. For instance, brand name bags of frozen, ready-to-heat French fries may be three times the size of those sold in regular grocery stores. The price is likely to be much less than the grocery store equivalent. Large families, as well as people with extra pantry and freezer storage, are typical customers of warehouse stores.

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Warehouse clubs may not honor manufacturer's coupons as regular grocery stores do. Instead, they may have their own discount coupons that they offer their members. A warehouse club often mails members a print magazine they produce that contains coupons and special offers. Since the format of the store is already a discount warehouse, weekly sales aren't usually offered as they are in most grocery stores; rather, prices are reduced as a continued sale price.

By contrast, most grocery stores feature certain items on sale each week. It may be possible for one of these sale items to be less expensive than the identical product in a warehouse club. Budget-minded discount warehouse members check weekly supermarket flyers for sales before shopping in the club store. Shopping online is possible for many warehouse clubs. In some cases, the shipping costs are included in the low prices.

Non-members may be permitted to shop in some warehouse clubs. A non-member fee that may be up to 15% of the purchase price is likely to be charged. Depending on the item and the sales at other stores, it's still possible for non-members to save when buying products at warehouse clubs. For instance, the pharmacy at a warehouse club store may allow non-members to save on prescription drug costs.

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