Boxed.com Buys Fresh Produce From Costco, Marks It Up For Delivery

Boxed is an online and mobile-based seller of low-priced bulk products for delivery. It has been described as "Costco for Millennials," and it even offers free samples like Costco does. But it turns out Boxed isn't exactly a Costco rival, because Boxed is actually buying Costco produce, marking it up, and reselling it for delivery.

For four years now, Boxed has been selling huge quantities of things like paper towels, coffee pods, and laundry detergent. Now, according to The New York Post, Boxed is looking to start selling fresh produce, too, and it's getting that produce and other fresh food from Costco.

The fresh food sales have started in New York City, Atlanta, Boston, and parts of New Jersey. Food can be delivered in just a few hours, and delivery is free on orders over $49.

Because Boxed is selling food from Costco at a markup, the prices are more expensive than if a person just drove to Costco in the first place. But ordering through the app means someone else does the actual footwork. For people in big cities who don't want to have to carry 10 heads of lettuce on the bus, the convenience might be worth the markup.

"We always want to make sure our merchandise is cheaper, but in this case shoppers are paying for convenience," Boxed spokesperson Ashish Prashar told the New York Post.

Boxed prices are about 8 percent higher than Costco's, but still reportedly about 15 percent less than Fresh Direct.

This is not the first time Boxed and Costco have been linked like this. Back in 2014, when Boxed was still very new, GeekWire reported that Boxed was buying Costco products and reselling them at a markup, with Costco's knowledge and cooperation.

Boxed is reportedly looking to expand its fresh food delivery service in the near future, possibly in Dallas or Las Vegas. Really, any city with a Costco could be a good option.

Check out 15 secrets of the $4.99 Costco rotisserie chicken.