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

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.

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

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

About 80% of the products Trader Joe

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

Customers can

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.

Trader Joe

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

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

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

This cuts Trader Joe

Stores also use natural, energy-efficient lighting.

Stores also use natural, energy-efficient lighting.

That keeps utility costs low.

That keeps utility costs low.

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

Trader Joe

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

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

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