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Costco’s Membership Model Drives Profitability in Retail Sector
Costco’s Membership Model Drives Profitability in Retail Sector
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BTCCSquare news:
Costco Wholesale's investment appeal lies in its unconventional profit engine. Membership fees, ranging from $65 to $130 annually, contribute nearly 65% of net income—$1.24 billion of Q3 2025's $1.90 billion total. The company deliberately maintains razor-thin 11% gross margins to fuel member loyalty and store traffic.
This warehouse giant operates more like a subscription service than a traditional retailer. The model creates recurring revenue while low prices ensure consistent footfall. Tax considerations complicate the fee-to-profit ratio, but the underlying mechanics remain compelling for long-term investors.
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