How Costco Actually Makes Money (It's Not the Groceries)

Costco sold nearly $270 billion of merchandise in fiscal 2025, but the thing holding the whole machine together is a $65 plastic card. Here's how Costco actually makes its money, and the lesson every business owner can take from it. In this video: 0:00 The $65 card 0:23 Where $275B in revenue comes from 0:55 The 11% margin 1:35 Why membership fees are almost pure profit 1:52 Membership fees vs. operating income 2:27 81 million members, 90%+ renewal 2:53 The Costco flywheel 3:58 The limited-selection secret 4:24 Why the hot dog is still $1.50 4:53 The lesson for your business Sources: Costco FY2025 results: https://investor.costco.com/news/news... Costco FY2025 Form 10-K (membership fees, renewal rates, gross margin) Markup caps of ~14% (brands) and ~15% (Kirkland Signature) are long-stated company policy, not an SEC-filed figure. Visuals are illustrative and AI-generated. Narration uses an AI voice. For education and entertainment only. Not financial advice. Subscribe to Hidden Ledger for a new business breakdown every week. #Costco #BusinessModel #HowCompaniesMakeMoney