Analysts say Costco's interesting and innovative initiative selling 1-ounce gold bars to its members has been a success in the months since its launch last year.
A research equity note released by analysts at Wells Fargo has reportedly found that the company is bringing in as much as $200 million a month since the debut of the exclusive online sales of the precious metal bars in 2023.
As MarketWatch reported, the analysts said the gold sales appear to be boosting same-store sales by around 1%.
AP Photo/Richard Drew
In October, the company found that customers were buying out the pure 24-karat gold bars faster than its discounted 170-ounce jugs of laundry detergent, The Associated Press reported.
The company's CFO Richard Galanti said during an earnings call that the gold bars were "typically gone within a few hours" after they are posted for sale on Costco's website, and said at the time the company had initially placed a two-bar limit for each buyer. The company was selling them at just under $2,000 each.
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The company said it was monitoring reports on Reddit while watching sales as it estimated how receptive customers would be to continued sales of precious metals.
Estimates have found that Costco is pricing the gold bars aggressively at around 2% above the spot price, Investor Place reported. With just one transaction per member allowed, this could contribute to how the gold bars are priced. Within each transaction, up to five bars were eventually permitted in a sale.
Costco has said on its website that there will be no refunds for purchase of gold bars.
Wells Fargo has called Costco's decision to offer gold and silver for sale a "smart move" that "reinforces" the company's "value position." Jewelry has also been a top-performing product sector for the warehouse giant, Axios reported.
