Comment by fckgw
18 hours ago
Costco derives the majority of their revenue from the membership fee, followed by services. They actually make very little on the products themselves as they have a hard cap on markups at like 11% or something around there.
The membership is the whole reason they can offer the deals they do.
> Costco derives the majority of their revenue from the membership fee,
Costco revenue is about 2% membership fee and 98% sales of merchandise and services (most of which is merchandise, not services.)
Now, the membership fee is its main source of profit (because the merchandise sales are extremely low margin), but not its main source of revenue.
> Costco derives the majority of their revenue from the membership fee […]
Costco derives the majority of their profits from the membership fee:
* https://en.wikipedia.org/wiki/Costco#Business_model