Costco Loses $40 Million a Year on Chicken. It's the Smartest Thing They've Ever Done.

There is a store that sells a cashmere sweater for $30, a diamond ring for $5,000 less than a jewelry store, and a hot dog for $1.50 — a price that hasn't changed since 1985. And this store, which sells everything at or near cost, is one of the most profitable retail operations in American history. This is how that's possible. In this video, you'll discover how the Costco membership fee generates more profit than the entire retail operation combined, why Costco deliberately loses $30-40 million per year selling rotisserie chickens — and why that's the most rational business decision they ever made, how Richard Thaler's mental accounting and transaction utility theory explains why you feel better spending money at Costco than anywhere else, how Frederick Reichheld's Net Promoter Score research explains why Costco members don't just renew — they recruit, why Jim Sinegal told an executive he would kill them if they raised the hot dog price, and how Charles Handy's paradox of profit explains why Costco's refusal to pursue profit is the exact reason it has so much of it. This is not a story about bulk shopping. It is a story about the most perfectly aligned business model ever built. If this changed how you think about what a business really is, drop a comment and subscribe — there's a lot more where this came from. #costco #costcobusinessmodel #costcomembership #jimsinegal #costcohotdog #costcorotisseriechicken #businessstrategy #retailbusiness #businessstories #entrepreneurship #brandstrategy #businesslessons #richardthaler #mentalaccounting #transactionutility #frederichreichheld #netpromoterscore #charleshandy #paradoxofprofit #howcostcoworks #costcohistory #businessdocumentary #businessexplained #retailstrategy #membershpmodel #stickman #stickmananimation