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> Last I read, memberships were like half their profit or something. It's certainly not like CostCo makes no more profit if people buy twice as much. Setting pr
by nordsieck 8y ago
> Last I read, memberships were like half their profit or something. It's certainly not like CostCo makes no more profit if people buy twice as much. Setting prices to that level would be insane.
You're wrong.
> Through two quarters of its fiscal 2017, Costco has reported $1.06 billion in income (profit). That number is slightly smaller than the $1.26 billion it collected in membership fees.
> If you examine the company's sales, it brought in $56.59 billion in net sales with a merchandise cost of $50.21 billion and sales expenses of $5.92 billion. That's a small loss when it comes to actually selling goods,
https://www.fool.com/investing/2017/05/05/how-costco-wholesale-corporation-makes-most-of-its.aspx https://www.fool.com/investing/2017/05/05/how-costco-wholesa...
- quadrangle 8y agoThanks for the update. While it may be true that they'd be losing money overall without the membership fees, I doubt they sell most products at a direct loss. There's overhead for managing everything, but they surely don't set things up so that each sale of a washing machine or patio furniture or whatever is actually a net loss. I'd be shocked if having all members increase their spending would decrease rather than increase CostCo profits.