Amazon Prime Versus Costco Memberships

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If you’re wondering whether or not you should sign up for Amazon Prime or Costco—or both!—I’m happy you’re thinking about your budget. Recurring expenses, like subscriptions and memberships, are often the biggest budget busters. But unlike the Hulu subscription you may have forgotten about, Amazon Prime and Costco memberships are not as forgettable.

Here’s the basic breakdown. 

Amazon Prime  

Membership Fee: The Amazon Prime membership fee is $119 per year. The first 30 days are free and you can cancel anytime. 

Top Benefit: Free two-day shipping on eligible items.


Membership Fee: Gold Star Membership costs $60 annually for new members. 

Top Benefit: Access to any Costco location worldwide and quality merchandise at a value.


Amazon = Convenience 

Those who use Amazon Prime use it for the ease of use and overall convenience. It has replaced running to the store for batteries or browsing the aisles for a baby gift. In just a few clicks you can order almost anything you need or want online and have it delivered to your door in two days or less for free. 

For the things you need, why not have them delivered? Well, sometimes the convenience factor can convince us that something is a need rather than a want. Unlike shopping at a brick and mortar store where you can see the total amount spent on your shopping trip on your receipt, many Amazon Prime shoppers fall into the habit of making one-off purchases because of the free shipping. So, you never see the total amount of what you’re actually spending. 

A long string of small amounts of money can add up. One new backpack here, $8 there, another $25 for some odds and ends, and before you know it, you’ve spent over $100 on a whole bunch of miscellaneous items. Additionally, the fact that you’re not physically handing over your money to a cashier, but rather clicking a button, could send your budget into turmoil. 

Costco = Value 

While Amazon is loved for its convenience, Costco is known for its value. At Costco, you also pay for an annual membership. You then receive savings because you’re buying bulk goods and discounted services. Rather than filling a virtual cart, Costco shoppers drive to the store, fill an oversized shopping cart, and shop in a warehouse-style environment. 

Shopping at Costco can be beneficial to your budget, especially for large families or those who need large quantities. However, what I’ve found is that it’s easy to purchase bonus items that you don’t really need. If you were surviving and thriving without $55 worth of snacks from Costco, then be cognizant of your budget when going down the snack aisle. Making a shopping list is an easy way to stick to a budget and still have fun while shopping at Costco.

What about prices? 

When you hear the word discount, you might think lower quality, but that is not the case with Costco. In fact, they’re known for many high-quality products like organic food items, fresh seafood, fine wines, and more. Because of this reason, you could probably shop at a regular grocery store where they sell generic brands and spend less. 

Price shopping is not a bad idea wherever you shop. If you’re in the market for a higher ticket item, like a vacuum or kitchen appliance, while it might seem like you’re getting a deal at Costco, you may be spending more than necessary. Shopping around is your best bet if you’re trying to stick to a budget. 

Paying Convenience Tax

While Costco seems to be favored in terms of the best prices compared to Amazon, buying in bulk can be a hassle. On the other hand, sometimes time is so valuable that paying to have something delivered is worth it. I call this a convenience tax. A new mom who needs diapers but also needs to stay home and bond with her baby? That’s worth paying what it takes to have those diapers delivered. A business owner who is booked solid and can’t make it to the store? Delivery to the rescue! 

The Verdict 

At the end of the day, Amazon Prime and Costco both offer incredible benefits that are worth the fee. If you have room in your budget to pay for the membership fee, go for it! Like with anything else in your budget, your behavior will be the deciding factor if you can sustain these types of memberships. If you’re being responsible with your spending, setting limits, and sticking to your goals, then there’s no problem with signing up for Amazon Prime or getting a Costco card. On the contrary, these memberships can easily be cancelled to make room in your budget for more necessary items. 

Happy shopping, friends! If you want to read more content like this, check out my blog page.

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