SMS wrote:

On 11/12/2014 9:03 AM, scarecrow wrote:

I'm late to the party so maybe someone's also mentioned this, but
perhaps Costco figures if someone is dumb enough think they have to
drive miles to top up their tires instead of doing it in the comfort
of their own garage they might also, while there, go in and buy an
impulse flatscreen.

Tires are very high margin items, like mattresses.

If your argument is correct and tires really do last longer with
nitrogen then it appears that Costco is shooting themselves in the
foot since they would have less repeat sales over time, not more.

You want to maximize
your sales volume. Prices are set to maximize profit, they are not set
by calculating expenses and then adding some percentage to that.
Costco's strategy is to maximize profit by increasing their market share
by pricing things competitively.

From what I've read so far you have no clue why Costco does what it
does. It's pure guesswork on your part.

Costco also seems to have a corporate philosophy of not being sleazy.
They never charged separately for valves or road hazard and they never
set tire prices artificially low and then tried to make it up with high
mounting and balancing prices.

When I was a Costco member I could almost always find the same or
better deal on a high dollar item elsewhere. But the two stores near
me are always packed so what do I know. Or maybe it should be there's
one born every second?