California man launched a delivery service for Costco food court fans, then he revealed the 1,100% markup he charges for a $1.50 hot dog combo
‘You’d be surprised how some people are just craving it specifically.’
Costco’s hot dog combo sells for $1.50 at the warehouse, yet it can reach a Southern California doorstep for $18. According to SFGate, a new service called No Tip sends people into Costco food courts to buy orders and carry them over to customers. The $18 price works out to a 1,100% markup.
Customers place an order on the company’s site, and someone waits in line at the food court, picks up the items and delivers them. Chicken tenders, hot dogs, cookies and pepperoni pizzas are among the items on offer. The founder says customers get a refund when an order runs late. Other items cost more too. A whole pizza costs $9.95 for members in the warehouse and $30 through No Tip. A rotisserie chicken chef salad is $7.99 in person and $28 on the service.
The founder, a software engineer, describes No Tip as mainly a catering service for office lunches, birthday parties and family gatherings. Single orders are welcome as well. The site says it can handle orders for as many as 200 people, and plates and forks come with each delivery, though without setup staff.
Offices, drivers and prices
“A lot of offices are ordering from me,” he says, adding that “they’ve got the money to blow.” “You’d be surprised how some people are just craving it specifically,” he says. He built the service after a late-night pizza craving in the Venice Beach area, when he found no easy way to get it. Two months after launch, the site lists 66 fulfillment locations across Southern California. Deliveries come from the founder, friends and “some guys I pay on the side right now.” He hopes to hire in-house drivers if demand holds up.
He says his first orders served as a test, and he raised prices to what customers’ budgets allowed. Prices are all-inclusive, so there are no tips or fees, and the company promises on-time delivery. Costco’s terms restrict purchases to members, and the founder says the people picking up orders are members. The outlet also contacted Costco for comment.
Membership rules are enforced more closely now, as Costco has introduced stricter membership card checks in recent years. In one case, a member was stopped at the entrance over the photo on her card. The founder calls himself a good partner for the chain. “It only adds more money to them,” he says. He adds, “I love Costco, and I would like to get more business to Costco.”
The hot dog and soda combo has cost $1.50 since 1985, per Newsweek. Costco’s CEO stated, “The hot dog price will not change as long as I’m around.” Food court purchases fall under the same rule. According to Fox Baltimore, customers need a membership to buy at a food court kiosk or order window.
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