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Those membership fees provide the majority of Costco's profit, though.
by thaeli 9y ago
Those membership fees provide the majority of Costco's profit, though.
- dogruck 9y agoCorrect. They do indeed work hard to minimize markup margins. They also sell some items at a definitive loss. And they attribute their revenue to the membership fees.
- dragonwriter 9y ago> And they attribute their revenue to the membership fees. No, their profit is largely attributes to membership fees; their revenue is almost entirely sales (for the 53-week “year” in their most recent 10-K, $126+ billion in net sales, less than $3 billion in membership fees.) Basically, Costco uses a giant near-zero-profit sales operation as a the key benefit to sell memberships, which are its profit-making business.