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> Costco makes the majority of its money from memberships Not really. Their total profits last year were $2.8B and their membership income was $1.5B. It only
by jedberg 3y ago
> Costco makes the majority of its money from memberships
Not really. Their total profits last year were $2.8B and their membership income was $1.5B. It only represents the majority if you assume there is no cost to their membership income. But we know there is, because they have to have employees who do nothing but process memberships and they have to maintain all their membership benefits which also requires employees.
It's fair to say that about 1/2 of their income is from memberships though, which is still high.
- recursive 3y agoIf those numbers are precisely accurate, it should be noted that Costco could be paying up to $100M to process memberships, and it would still literally actually be most of their profit. Also "about 1/2" and "most" are not mutually inclusive. In fact, I'd expect they mutually occur with some frequency.
- pharrington 3y agoThe assumption is that everything the business does has a cost.
- dragonwriter 3y ago> Their total profits last year were $2.8B and their membership income was $1.5B. According to their 2022 annual report, their membership revenue for their reporting year (the 52 week period ending August 28, 2022) was $4.2B, and their net income for the same period was $5.9B, so neither your numbers nor the relationship between them seems to be correct, unless Costco committed massive securities fraud. https://investor.costco.com/financials/annual-reports-and-proxy-statements/default.aspx https://investor.costco.com/financials/annual-reports-and-pr...