Quote Originally Posted by Mr Peabody
Out to Costco today, noticed some additional Blu-ray movies prominently displayed in a main isle. Still not completely competitive on price though. A few were $7.99. Stuff like Young Guns, Total Recall and a few other older titles. Regular titles like the Harry Potter and such were $16.99 which is bettered by places like Amazon. The new Harry Potter was $18.99 and others even higher. Interestingly enough I bought the new Harry Potter on Blu-ray at Wal-Mart for $15.46 which is right with Amazon.
Walmart and Amazon though do a lot of loss leader pricing -- using the low prices on specific titles in hopes that you will buy other items before you checkout. And a lot of their other titles are not as discounted. I picked up This Is Spinal Tap last week on Blu-ray for $15, whereas Amazon currently sells it for $19 and Best Buy sells it for $23.

Costco functions largely as a wholesale warehouse (about half of Costco's sales are to other businesses for resale), and doesn't do loss leader pricing. They will get volume discount deals with manufacturers, which they pass along as coupon specials.

But, my understanding is that the items in Costco are typically priced around wholesale cost plus 10%. The wholesale cost on new release BDs is supposedly around $22, and Costco sells most of them for around $25, so Costco's Blu-ray pricing is more in line with what it should cost if a store expects to make a small profit on that particular title.