Costco makes almost all its actual profit from membership fees, not from the margins on the products themselves.
- Unique Strategy: They sell products so quickly that they often receive payment from customers before they even have to pay their suppliers. This gives them “free” cash to reinvest constantly.
- Why it’s hard to replicate: This works because of a specific North American and Asian cultural habit of bulk buying and a massive, loyal membership base that pays upfront for the
