How Costco Makes Billions With Almost No Markup

How does Costco make money when it keeps its markup so low? In this video we break down the Costco business model: membership fees, the Kirkland Signature brand, limited selection, gas stations, bulk buying and the loop that keeps members renewing. Costco made about $270 billion in net sales in fiscal 2025, but the number that matters most is $5.3 billion in membership fees. We explain why. You'll learn: Why Costco keeps its markup so small on purpose How membership fees change customer behavior Why a limited selection helps Costco buy at massive scale How Kirkland Signature and gas stations bring members back Why Executive members drive about 74% of sales How renewal rates of 92.3% (US and Canada) and 89.8% (worldwide) protect the model The weakness hidden inside the loop Sources: Costco fiscal 2025 annual report and investor materials. Figures as stated in the video. This video is for education and commentary, not financial advice. Not affiliated with or endorsed by Costco Wholesale Corporation. #Costco #BusinessModel #HowItWorks