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Not sure why this is getting downvoted. It’s 100% true. Their profits primarily come from membership fees. I believe their markup is capped at a maximum of 15%.
by IAmGraydon 3y ago
Not sure why this is getting downvoted. It’s 100% true. Their profits primarily come from membership fees. I believe their markup is capped at a maximum of 15%.
- rahimnathwani 3y ago"Their profits primarily come from membership fees." I've seen this quoted repeated but it's not a useful lens. While Costco's annual revenue from membership fees is approximately equal to Costco's annual net profit, memberships are only valuable because of the additional services and products Costco offers, which also incur costs and contribute to their overall profits. So it makes no sense to consider Costco memberships a product with close to 100% gross margin, which is what people normally mean when they say profits primarily come from membership fees.