How Costco Really Makes Money (It's Not the Food)

Costco barely profits on what it sells. Its real money comes from the membership card in your wallet. 📚 For Costco fans, The Joy of Costco: https://www.amazon.com/dp/1959505009?... 📈 Learn how business models work: https://www.amazon.com/dp/0470876417?... As an Amazon Associate I earn from qualifying purchases. Costco sells a rotisserie chicken for $4.99 and a hot dog and soda for $1.50, and the hot dog price has barely moved since the mid-1980s. So how does Costco make money? In this video: the capped markups, the membership fee model, why the hot dog is a loss leader, and how Costco keeps its costs low. Key figures (as reported): • Markup cap of about 14% on brand-name goods and about 15% on Kirkland Signature • Membership: $65 a year (Gold Star), $130 (Executive), after the September 2024 increase • About 81 million paid members; fiscal 2025 membership fees of about $5.3B, roughly half of about $10.4B operating income • Renewal rates of about 92% in the US and Canada, about 90% worldwide Sources: OPB (June 2024); RetailWire via Yahoo Finance; Costco investor filings and reports. New business breakdowns every week. Subscribe so you don't miss the next one.