Not sure about NY, but I think in CA, if he is "reselling" the items (and therefore didn't pay the sales tax to Costco), he should collect from the customers and then pay it to the State Board. But if he does pay sales tax, then I don't think it's an issue - the customer would just pay the sales tax to him. But he has already paid the sales tax to the state.

(rim shot)

@Dominikanfrank: I am Haitian so I will only speak for the majority of my people, but I am sure others would agree. In NYC our early 1900's apartments and closets are huge, and we can make room for just about anything COSTCO sells. Especially when West Indians don't necc. abide by the minimalist style of decor.

Not sure how the prices will compare with other places, but perhaps this delivery guy won't have to go as far.

Yep, and if you have a resale license and show it to costco, you can buy stuff tax free. Of course that means that YOU have to charge sales tax when you resell it...something tells me that this guy isn't doing that...

@Falcon5768:

Interesting, and would make sense, if it weren't for the fact that WalMart's gross margins are _lower_ than comparable stores.

Also, your father-in-law wouldn't have "made millions," he would have generated millions in revenue. Big difference.

@Falcon5768:

Funny, if NO ONE wants WalMart, then who's shopping there?

Bottom line, the message is "I don't want to shop at WalMart, so I don't think you should be allowed to."

In fact, I'd like it now for when I'm sick and don't feel like driving to the store for OTC meds.

...and then when the lease changed hands we finally hit the $2000 rent control ceiling, and the landlord said, "That'll be $3050 please," and I moved to a dive in Inwood.

@Rachacha: There are "coffee services" which do just that thing.

@lajoan: I take my son's there for the food court pizza which is no worse than higher priced mcPizzas from the chain pizza places. Plus we can hang there for a long time and not get hasseled by waitstaff (since there is none!) which works well when they have activities scheduled earlier in the day prior to my dropping them back off at their mother's home...

@FaustianSlip: Sad to say Maine probably does not fit a streamlined and efficient logistics model along with having enough of the target market of people living there. Heck, TN only recently got a single Trader Joe's installed in the Gold Coast area of Nashville...

@Falcon5768: The Walmart business model has been called "retail strip mining" i.e. remove all the profits from an area and ship them to the Walton family, etc. unlike the grocers of old who lived and worked in the town, city, region...

@sven.kirk: and pays business taxes

They're looking into the KC market apparently, finally. Though they're not cheaper than the existing stores around here and there local Hy-Vees are big into organic food already. What I'm interested in are the unique products only TJs has.

@adrew: If he's smart he's got an Exec. membership. They give you a rebate (believe it's 5%) at the end of the year on how much you spent during your membership year. My son uses Costco for some items at his store, the rest of the family just use my membership for basic bulk shopping, i get a nice rebate at the end of the year from it.

@katstermonster: @Mr_Human: @MostlyHarmless: Yeah, I choked a little too. I agree with the others. Kastermonster, you have no idea what what a small apartment is. 1,000 square feet for two people is a small mansion when it comes to apartment living. We live in a 765 square foot apartment, and we share it with an animal.

Um... democratic processes?

They make you slash your overhead, fire your workers and take a paycut in order to get the pricing down to a barely there profit, then sell your item for your normal retail value making them more profit than they would have had they just bought the item for what you sold it to other people.

their justification? That you are selling in Walmart, so the bulk of sales will make up your profit loss. And they do this for everything. My father-in-laws firm was hired to do market research for them and walked out on them when they tried to get him to cut his profit to the point he was working at a loss once travel and staff overhead was factor in. Said it was the best decision he ever made despite the millions he could have potentially made from it.

Its ALSO residence, NO ONE wants Walmart, because with Walmart comes unfair pricing (great for the consumer but impossible for the retailer to compete) and loss of jobs.

Walmart is a cancer, its just eats up normal retail killing off anything that stands in its way.

I actually rent out a extra storage space specifically so that I free up space in my closets for stuff like this. The savings totally outweigh the cost of the storage space.

@TheObserver:

ummm .... what you've just described is re-sale. Replace "he" with "wholesaler" and "split" with margin.

@smartmuffin: Don't restaurants and mom & pop diners do this too?

@Doug Nelson: Yes they do accept Tax ID numbers.

And to whoever was saying that people living in small apartments could never find space for Costco-sized orders of soda or laundry detergent, I have to disagree. My apartment was fairly small (though big by Japanese standards), and I had Costco root beer stowed all over the place. Apartments in cities like Osaka are positively tiny, but Costco was doing a booming business every time I went there.

We don't have Costco in my neck of the woods right now, but they've forever earned my affection for providing me with mac & cheese, root beer and instant oatmeal during my two years in Japan. Thanks, Costco!

The only thing I have against Trader Joe's is that every time I ask a cashier when they'll finally open one in Maine, because I really need somewhere where I can get their turkey chili and the TJ's brand of pesto, they laugh. A delivery service like the one you mention would probably do very well here- even with service charges, it would still be less expensive than shopping at Whole Paycheck.

I dunno about that. Bloomberg never saw a big box retailer he didn't like...

Sure, we all know Costco is a different kind of wholesale store, but anyway the point is, they couldn't give a rat's ass if you are selling the merchandise! Why would they want to stop you? They make money when you buy it! Grocery stores, on the other hand, frown upon buying for resale because they have loss leaders and they counter crafty entrepreneurs by limiting quantities on really good sale items.

Also, your lack of knowledge of the first sale doctrine is truly terrifying. I guess if you bought a pair of pants with a label suggesting that you're "not allowed" to sell them or give them away, you'd not realize that was meaningless crap too?

I think you'd love DRM music services.

State licensing and retailer laws apply when people are selling/delivering.

Another thing, he really isn't reselling anything from what I read from the article. He's basically a delivery service. Now I don't know if the customer gives him money ahead of time or he just presents the bill, but at any rate, all he is doing is taking what an equivalent item would have cost in Manhattan, taking the difference, and having the customer pay half of that. So if the customer saves 20 bucks on toilet paper, then he'll pay the guy 10 bucks on top of the cheaper price. So again more of a 'delivery charge' than anything.

Costco was prevented from building a store on the Upper West Side of Manhattan. Walmart has been blocked no matter where it tried to build in the city, yet Target is opening a store in Manhattan soon. How does that happen?

Does Costco, Sams, etc., accept tax ID numbers? Otherwise he'll be paying double sales tax (or not charging it to his customers, therefore violating the law).

@Panamapeter:

And the jab about the LEO seeking a promotion. You know it will be a wet behind the ears new enlistee that will be following up with this crime.

@Panamapeter:

One must assume a little sarcasm or humor in every post.

@nakkypoo:

Good lucking think you way.

Products sold by weight, volume or count for profit are regulated by your state's weight and measure board

Products deemed a human consumable food are regulated by the state's weight and measure board as well as the state's health department.

@gparlett:

The products sold by Sam's Club for retail vending are labelled in compliance with State labelling laws for products for resale

(manufacturer name, location, manufacturing code, product weight, serving size, health label etc)

Products sold in bulk packages, unless the products within are specifically labelled for resale, may not be split from the bulk package and resold. Doing so is a violation of the NY State Weight and Measure Board (or whatever they call it in NY) and subject to a fine of typically $100 per violation.

Yes, each sale from the bulk package would be considered a violation.

However, if the person is keeping the products within their original bulk packaging (or split if the product within is properly labelled), the person is not in violation of the Weight and Measure Board.

BUT, the person may still be in violation of the State Health Department which regulates the sale and resale of consumable food products.

Since this website is well read, we can assume that at least one reader is a member of the law enforcement community, specifically the State of NY law enforcement community, and is seeking a promotion as a result of finding a significant criminal element. The business will now be placed under the proverbial microscope and any findings of wrong doing will be quickly discovered.

Absolutely not. That's why Costco exists in the first place, to cater to the small business (i.e. the coffee houses, vending machine suppliers, etc). These warehouse stores used to ONLY be open to businesses. The "no resale" stickers indicate that the item is not MARKED for resale, but that doesn't mean it's prohibited.

This man is doing nothing wrong.

This guy should also look at selling this service to businesses and office buildings to stock breakrooms or to have refreshments on hand for business meetings.

A couple of years ago we had a large meeting/seminar and wanted to buy 30 cases of bottled water. We thought about going to Costco, but the closest one was way out of the way and required membership (of which the company was not a member so we would have been relying on an employee's personal membership. We ultimately ordered it from Peapod by Giant, a grocery delivery service run by our local grocery store. It was convenient, and saved us a lot of time and hassle.

And I doubt Costco would terminate this guy's membership. Costco and Sam's club cater specifically to just these types of entrepreneurs. As long as he's paying for a business membership they have no reason to complain.

I reckon what this guy is doing is taking grocery orders from people in non-bulk quantities. Runs to Costco and purchases at wholesale pricing and quantities. And marks up the goods just enough to cover his expenses and make a tidy profit, all the while keeping a competitive price. Heck I reckon the guy could charge the same as the grocers and still have lots of business.

@RandomHookup: Costco and other warehouse stores cater to small businesses (restaurants and vending machine stockers), heck, half of their food items are tagged with "It Vends" on it.

For things like paper products or cleaning supplies, they are simply packaged in larger containers or multiple jars per sale package.

@Megalomania: I believe the individual sale is to some extent a barcode item, but also for food (think variety packs of chips/cheetos/doritos, it may also be a nutritional information thing where some of the nutritional information is located only on the exterior packaging and not on the individual package.

@pmcpa4: Brilliant! I just hope that the local grocery stores or even Costco don't try to pull shenanigans and get the guy shut down.

This situation doesn't apply since people are still purchasing the entire case - the items just aren't able to be broken down and sold individually.

Also, there's often no nutrition information on the "not for individual sale" items.

But yes, you're right about the bar codes. I've found that out the hard way when someone broke up a 6 pack of something and left it in the case for individual bottles.

That doesn't mean the party from whom you bought it has to keep selling to you.

@krunk4ever: I think he does it this way to point out that the process is fair. Each side splits the savings. People like fair deals.

the website is pretty cool. I might consider using it if I lived in NYC.

I live in the suburbs and CostCo is literally the closest store to my house. Which is weird. I find myself going there for just 1 or 2 items on occassion. Or free lunch thanks to the ample samples.

@nakkypoo: True, but Costco is a membership driven club, so I'm sure there are some provisions in the contract that limit how you can dispose of them. If that holds up in court is another matter.

There are some things you are limited by law from reselling...Rx, for example, and I'm sure there are others that you can't sell without a license of some sort.

@NeverLetMeDown:

Also, Costco wanted to open a store on the UWS, but got shot down by the local politicians (concerns about traffic, etc.).

@Trance1861: True for Costco, but the politicians are DEFINITELY keeping WalMart out of NYC (not just Manhattan).

First sale doctrine is what makes libraries and garage sales legal.

As someone previously mentioned already, space isn't cheap in Manhattan, so he could also make some extra money by splitting the bulk items. Stuff like Charmin toilet paper comes conveniently wrapped in packages of 6 already.

@cuiusquemodi: Beat me to the post! I was too busy confirming that I wasn't going crazy and that there are, indeed, Costcos in Brooklyn and Queens.

Also, I don't know how a Costco would even survive in Manhattan. The overhead for the type of space they would need would be insane. Also, no one has space in Manhattan to store bulk and, more importantly, no one can get bulk packages back to their buildings without a car.

There is a Costco in Brooklyn and another in Queens, and yet a third on Staten Island, all under the jurisdiction of these "union-bought 'progressive' politicians."

Although I suppose keeping Central Park as a public green space instead of developing it does indeed constitute socialism.

BUT. Costco isn't really that bulk. A lot of their items come in pairs or threes if i recall correctly.

Most bulk items at Costco/Sams are labeled for resale, so this would eliminate that problem. Thats why they sell soda in flats and retail display packs of snacks and sundries.

I believe it exists more as a warning to consumers. And perhaps Costco could revoke his membership.

Wouldn't this technically be considered the resale of items, most of which say right on the packaging aren't permitted for resale?

Methinks it won't take long for Costco itself, or the makers of some of the more popular products, to drag this guy to court and get him shut down.