Warehouse showrooms are able to sell products at low prices by passing some of their marketing functions on to consumers.

Question

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Warehouse showrooms, such as Costco and Sam's Club, often require customers to pay for membership in exchange for access to their low-priced products. By doing so, they are able to reduce their marketing costs and pass on the savings to the consumers. Additionally, they may have minimal staffing and product displays, further reducing expenses.

Warehouse Showrooms Are Able to Sell Products at Low Prices