Ever Wondered How Trader Joe's Keeps the Product Prices Low?

Private Label Products — I’m sure you love Trader Joe’s because of its delicious products, quirky packaging, and friendly crew. More than 80% of products you see in the store are a private label - meaning Trader Joe source them themselves from select suppliers and brand them under their name. This gives them the freedom to price the products fairly without paying bizdev middle-men or follow Manufacturer Suggested Retail Price (MSRP).

Which is amazing. You get to enjoy tested, sourced products, sourced, packaged and offered to you directly from one entity.

Logistics — One of the important aspects of deciding where Trader Joe’s is going to build a new store is its proximity to their warehouses. I know it’s a bit weird to mention military at this point but I’m sure you remember from history lessons how some battles (and wars) were lost because of stretched out or broken supply-chain. The closer it is, the more cost-efficient and easier it is to deliver the goods.

Low Marketing Costs - Have you ever seen Trader Joe’s Tv ad? Or have they reached out to you through social media? Have they remarket their products to you through the website?

Well, they didn’t because they have very low marketing costs and most of the marketing channels aren’t used in their strategy. All that you might get it’s their funny brochure (which is a copywriting masterpiece btw), an email newsletter and an in-store tasting station. They didn’t even use Social Media until recently (they have started their Instagram account).

If you would like to read the whole strategy and thinking behind the Trader Joe’s success, check the Trader Joe’s Growth Study :)