Here's how Trader Joe's keeps its groceries so cheap

Jessica Tyler,Kate TaylorOct 16, 2018, 18:35 IST

Jessica Tyler/Business Insider

Trader Joe's wins over customers with its high-quality and affordable products.
Selling products under a private label is one way that Trader Joe's is able to cut costs and pass along savings to the shopper.
Here are some other ways that Trader Joe's keeps its prices so low.

Trader Joe's wins over customers with its affordable products.

But despite how relatively low its prices are, the quality is still high.

Part of the reason is that 80% of Trader Joe's products are made for its own private label. That means the grocer is buying goods directly from the supplier, cutting out the middlemen in the supply chain that can drive up costs. Trader Joe's can pass along those savings to the shopper in turn.

Another way Trader Joe's cuts costs and passes the savings on to customers is by depending on word of mouth to spread the word about its products, rather than spending a lot on marketing.

See what else Trader Joe's does to keep its prices low:

See Here's how Trader Joe's keeps its groceries so cheap >>

Trader Joe's sells private-label products. That means the grocer is buying goods directly from the supplier, cutting out the middlemen in the supply chain that can drive up costs.

Source: Business Insider

About 80% of the products Trader Joe's carries are private label.

Source: Business Insider

Customers can't buy Trader Joe's private-label products anywhere else, but it helps keep costs low.

Source: Business Insider

Trader Joe's doesn't focus on packaging. By spending less time and money worrying about small imperfections in packaging, Trader Joe's is able to cut costs and pass those savings on to the customer.

Source: Business Insider

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Here's how Trader Joe's keeps its groceries so cheap

Trader Joe's sells private-label products. That means the grocer is buying goods directly from the supplier, cutting out the middlemen in the supply chain that can drive up costs.

About 80% of the products Trader Joe's carries are private label.

Customers can't buy Trader Joe's private-label products anywhere else, but it helps keep costs low.

Trader Joe's doesn't focus on packaging. By spending less time and money worrying about small imperfections in packaging, Trader Joe's is able to cut costs and pass those savings on to the customer.

Like the packaging, the stores are pretty no-frills.

This cuts Trader Joe's costs and allows it to sell its products for less.

Stores also use natural, energy-efficient lighting.

That keeps utility costs low.

Trader Joe's spends less money on marketing its products ...

... and depends more on word of mouth to save money.