Those “figures” are not based on Costco’s pricing, they are based on another member’s example of reasonable profit margin. I don’t know of the 15% markup applies to our speciality departments, or just off the shelf products, I don’t have access to that information.
The odds that this troll is actually employed but Costco in their hearing aid dept is slim… maybe on the back dock. No professional representing their employer would act the way our troll does. I’m sure he has never taken a business or economic class.
The odds that this troll is actually employed but Costco in their hearing aid dept is slim… maybe on the back dock. No professional representing their employer would act the way our troll does. I’m sure he has never taken a business or economic class.
Love the continuous insults lol. Truly underlines my points.
Those “figures” are not based on Costco’s pricing, they are based on another member’s example of reasonable profit margin. I don’t know of the 15% markup applies to our speciality departments, or just off the shelf products, I don’t have access to that information.
Given the $350 that you pay for the units and the $1295-1500 sale price let’s say you are ‘making’ 300% on your per unit sales. Your floor space is free, so what you’re effectively doing is being subsidised by and using the purchasing power of Costco to kill down the local independent who is making exactly the same or lower % markup that you are.
Given the $350 that you pay for the units and the $1295-1500 sale price let’s say you are ‘making’ 300% on your per unit sales. Your floor space is free, so what you’re effectively doing is being subsidised by and using the purchasing power of Costco to kill down the local independent who is making exactly the same or lower % markup that you are.
Do you feel that’s a fair comparison?
That is an unfair comparison given the fact that we don’t know that the clinic’s cost is only $350, this is speculation.
Making comparisons is a difficult proposition at best. There is a lot of mystery involved in cost-of-goods. Even in the more open environments that I know it is a clouded issue. I don’t know where you got the $350. I recall a remark that the feds paid $600 and that someone guessed $300 cost per. But both of those are unsubstantiated.
Additionally, your (service industry) and Costco (retail) industry really compare apples and oranges. Costco’s business plan actually relates more to turn than the profit aspect. Turns are a powerful retail force and one not available in service industries. It is how lower margin business can be so profitable with super markets being an excellent example.
I think what you are trying to say is that it is unfair. I agree with that. You providers are disadvantaged. I just don’t know where it is going to change. You need the added profit based on your lower turns. They don’t. They certainly make a greater profit in hearing aids than coffee. It is lack of competition that establishes that feature and makes it attractive to them at an intermediate markup. They probably can sell for less but don’t have to. Be grateful.
Disclosure: I am a long term holder of COST. Heck of a stock for me.
Costco’s self-imposed 15-percent limit on markups obviously doesn’t apply to hearing aids. One investment bank in Denmark, where ReSound is headquartered, estimates the selling price to Costco is about $350 per unit.
That is an unfair comparison given the fact that we don’t know that the clinic’s cost is only $350, this is speculation.
It’s consistent with the transfer price of another of the big suppliers (Sonova). It’s also consistent with the pricing that the major UK private sector supplier (Specsavers ) pays for their stock.
All this guessing about cost isn’t addressing the real issue. Let’s assume that $350 is correct and another from one of the practitioner remarks of $1000-1200 is also correct. To a lesser degree such pricing exist everywhere with “promotional pricing”, volume discounts, and, when Attorney Generals get involved, illegality.
Hearing aids are produced under oligopoly. If you aren’t familiar with the term, take a look here.
I looked on a site and it listed 6 clinics within 10 miles of my house. That was for a single brand. All of those price within a few dollars of each other. They do no price promoting and leave that for the operations that invite seniors to some temporary location with any followups a hundred miles or so away.
My GP referred me to one of them. He did it with a printed form that advertised the clinic. I had been to an with a full service audiology department and had told him that. He scheduled me for 3 tests and I thought it might be something different. Instead is was the same sound room and word recognition I had been through several times. Kickback involved? The session ended with an offer for $3200 worth of hearing aid – with a Senior Citizen Discount mind you. Be still my heart.
The business is an old boys club at every level. Marketing is only one step above Ginsu knives on TV or nearly non-existent. Sales are restricted by law and license.
What original cost is doesn’t mean anything. It is a controlled market at all levels. Just be grateful that is starting to break down.
all this guessing about cost isn’t addressing the real issue. Let’s assume that $350 is correct and another from one of the practitioner remarks of $1000-1200 is also correct. To a lesser degree such pricing exist everywhere with “promotional pricing”, volume discounts, and, when attorney generals get involved, illegality.
Hearing aids are produced under oligopoly. If you aren’t familiar with the term, take a look here.
I looked on a site and it listed 6 clinics within 10 miles of my house. That was for a single brand. All of those price within a few dollars of each other. They do no price promoting and leave that for the operations that invite seniors to some temporary location with any followups a hundred miles or so away.
My gp referred me to one of them. He did it with a printed form that advertised the clinic. I had been to an ent with a full service audiology department and had told him that. He scheduled me for 3 tests and i thought it might be something different. Instead is was the same sound room and word recognition i had been through several times. Kickback involved? The session ended with an offer for $3200 worth of hearing aid – with a senior citizen discount mind you. Be still my heart.
The business is an old boys club at every level. Marketing is only one step above ginsu knives on tv or nearly non-existent. Sales are restricted by law and license.
What original cost is doesn’t mean anything. It is a controlled market at all levels. Just be grateful that is starting to break down.
This is th problem, the industry has you believing that a “big box hearing aid” exists. When in reality, it is the same hearing aids made by the same makers that you’re paying $8000 for.
This is th problem, the industry has you believing that a “big box hearing aid” exists. When in reality, it is the same hearing aids made by the same makers that you’re paying $8000 for.
Most of my hearing aids have run about $2,000 but I understand the point. Some people in some markets have paid $8,000.
I’m all for better prices and service and wish more insurers in the U.S. would pick-up the cost (or a portion of it) of hearing aids. It would also be desirable for people to have exposure to a full array of aural rehabilitation services. Too often people are sent home with a set of aids that end up in a dresser drawer instead of their ears and many who wear aids are not satisfied with their performance. Anyway, my goal is to be an advocate for the and I try to do that when possible. The stigma and suffering of hearing loss should, and hopefully will, be lessened as we move forward.
Most of my hearing aids have run about $2,000 but I understand the point. Some people in some markets have paid $8,000.
I’m all for better prices and service and wish more insurers in the U.S. would pick-up the cost (or a portion of it) of hearing aids. It would also be desirable for people to have exposure to a full array of aural rehabilitation services. Too often people are sent home with a set of aids that end up in a dresser drawer instead of their ears and many who wear aids are not satisfied with their performance. Anyway, my goal is to be an advocate for the HOH and I try to do that when possible. The stigma and suffering of hearing loss should, and hopefully will, be lessened as we move forward.
I totally agree. I do see some coverage from insurance companies, but it’s between $500-$2000 every 5-6 years AKA realistic coverage based on realistic prices…NOT $6k, $7k, $8k+.
You only paid $2000 for your Oticon Chili SP9? That’s a steal of a deal considering it is listed ONLINE Collections — HearingDirect UK3 for $1495 Pounds ($2300 USD) & here ONLINE Oticon Hearing Aids1 for $1995.00 USD.
Props to your provider for the realistic mark-up. When did you get it?
You only paid $2000 for your Oticon Chili SP9? That’s a steal of a deal considering it is listed ONLINE Collections — HearingDirect UK for $1495 Pounds ($2300 USD) & here ONLINE Oticon Hearing Aids for $1995.00 USD.
I recently paid $300 (three hundred USD) for one Oticon Chili SP9. I did this twice so $600 total for a pair of Chili SP9s. Though this is used hearing aids () with no factory warranty and no professional service so it may not be everyone’s cup of tea. I never pay big bucks for a factory warranty and I don’t need the professional service since I program the hearing aids myself.
Oh, and I don’t buy Costco HAs because they are too expensive! Yes, I know they are cheaper than a typical professional audiologist. But still way more expensive than buying used.
And please keep on selling boatloads of HAs at Costco. It makes the used HAs market all the better/cheaper for me. More supply keeps the used HA prices low. It just keeps getting better and better.
I recently paid $300 (three hundred USD) for one Oticon Chili SP9. I did this twice so $600 total for a pair of Chili SP9s. Though this is used hearing aids (HAs) with no factory warranty and no professional service so it may not be everyone’s cup of tea. I never pay big bucks for a factory warranty and I don’t need the professional service since I program the hearing aids myself.
Oh, and I don’t buy Costco HAs because they are too expensive! Yes, I know they are cheaper than a typical professional audiologist. But still way more expensive than buying used.
And please keep on selling boatloads of HAs at Costco. It makes the used HAs market all the better/cheaper for me. More supply keeps the used HA prices low. It just keeps getting better and better.
LOL I love it!!! Where did you obtain the software and licenses etc? Programming equipment? Do you wear a mold with your Chili SP9? Have you ever read up on the benefits of completing real ear measurements? Please share more information; those who have the motivation and discipline to self-program really intrigue me. I can share some tips too!
I totally agree. I do see some coverage from insurance companies, but it’s between $500-$2000 every 5-6 years AKA realistic coverage based on realistic prices…NOT $6k, $7k, $8k+.
You only paid $2000 for your Oticon Chili SP9? That’s a steal of a deal considering it is listed ONLINE Collections — HearingDirect UK for $1495 Pounds ($2300 USD) & here ONLINE Oticon Hearing Aids for $1995.00 USD.
Props to your provider for the realistic mark-up. When did you get it?
My Chili SP9s were $4400 for a pair in 2011. I got a good price because I was repeat customer and imagine the mark-up was 100% from wholesale. Regular price would have been at least $5k for the set and they were purchased through an audiologist’s office where an is always on staff. At that time there were high-end markets on the coasts (NYC/San Fran) charging $4k each for a Chili SP9 - I checked.
Anyway, the pricing models have been exorbitant in some areas and economies of scale, online sales and discount warehouses began chipping away about a decade ago. A good set of mid-range digital aids can be had for around $3k these days in the midwest.
If consumers are willing to pay $5000.00+ to be the first to get their hands on the “latest and greatest” hearing aid technology, be honest with them at least. As long as the professional is being honest about it’s improvements, all is fair game. This vulnerable, usually senior aged market looking for help, can be easily swayed by the words “cutting edge, latest and greatest, revolutionary” etc, and professionals use this to get people in the door and to buy the latest, most expensive hearing aids. We have plateaued big time in regard to technology, and we all know it, nothing has really improved since 2010. The next big shift will be when a processor is released that can create a real-time, significant SNR boost, but as of right now… lets not act like each new “platform” that comes out is going to change your patient’s lives. That’s not responsible healthcare; that is deception. Hit your prescriptive targets between 500Hz-3000Hz (not a fan of hitting 4Khz), counsel the pt. heavily on auditory deprivation/adaptation to amplification, and then make your comfort tweaks at the follow up if necessary; its a simple model, and NOT worth a $4000 markup on a set of hearing aids. The current delivery model for hearing aids is flawed, and this is why so many clinics are scrambling to hang onto their hats, while certain ones are thriving and growing exponentially.
NW Indiana
Wales, UK
