Costco, the American multinational retail corporation, is known for its bulk products and low prices. However, in recent times, the company has taken a surprising turn by selling high-end luxury items such as Louis Vuitton handbags.
This move has left many people wondering – why is Costco selling Louis Vuitton? Let’s explore the reasons behind this unexpected shift.
Costco’s Business Model
Costco operates on a membership-based system where customers pay an annual fee to access their stores. This model enables Costco to sell their products at lower prices than their competitors since they can purchase goods in bulk directly from manufacturers without any intermediaries. By doing so, the company can pass on savings to their customers and maintain customer loyalty.
Partnership with Luxury Brands
In recent years, Costco has partnered with several luxury brands such as Gucci and Prada to offer discounted items to its members. These partnerships have been successful for both parties as luxury brands can reach a broader audience while Costco can provide high-end products at lower prices than traditional stores.
Louis Vuitton Lawsuit
In 2013, Louis Vuitton filed a lawsuit against Costco for trademark infringement over a line of handbags sold under the name “Tiffany” that resembled the famous Tiffany & Co jewelry brand. The court ruled in favor of Louis Vuitton and ordered Costco to pay $5.5 million in damages.
After this lawsuit, one would expect that Louis Vuitton would never want to do business with Costco again. However, surprisingly in 2019, Louis Vuitton started selling some of its items at select Costco stores.
Limited Supply
It’s important to note that Louis Vuitton products sold at Costco are limited edition items with restricted availability. These exclusive deals are only available for a limited time and are not replenished once sold out. This strategy creates a sense of urgency among shoppers to purchase the item before it’s gone, which contributes to Costco’s business model of offering a unique shopping experience.
Final Thoughts
In conclusion, Costco is selling Louis Vuitton products because of their partnership with luxury brands and a desire to offer exclusive deals to their members. While the move may seem out of place for a bulk retailer, it’s an innovative approach that appeals to shoppers who want high-end products at affordable prices. With more luxury brands partnering with Costco, it’s possible that we will continue to see more unexpected collaborations in the future.
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