Collective Buying Power = Savings
Why being a part of a membership club makes the most sense.
At some point in your life, you’ve probably been a part of a membership club like Costco, AAA, etc. and reaped the benefits of membership. But have you ever thought about why these types of clubs work?
Collective buying power or the idea that there is power in numbers is the reason the membership clubs can offer incredible deals and savings. These clubs create win-win situations for businesses and consumers, meaning the business can count on making sales to the large number of members, while the members get access to deals because of their large numbers. Joining becomes intuitive because members know they are not able to get these deals on their own.
Again, membership clubs provide savings because they provide guarantees. Guaranteed sales to businesses and guaranteed savings to members. Win-Win.
Further, the savings also come from the club not profiting off of the product or service being provided. Instead, the club makes most of its money by charging the low individual membership fees/dues. Members rest assured knowing they are getting a great deal because the entire membership club model rests on the idea that members are getting access to the lowest prices possible. If the group does not get a better deal than the individual, the entire membership club model would collapse. Good thing members continue to get the best deals and the clubs don’t collapse!