# How Costco Built a Membership Model on Treasure Hunt

Page: https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/how-costco-built-a-membership-model-on-treasure-hunt
Text version: https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/how-costco-built-a-membership-model-on-treasure-hunt.md
Podcast: [Business Models Explained with Fexingo: Subscription, Marketplace, SaaS, and Service Companies](https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638)
Published: 2026-07-13T05:00:17+00:00
Episode link: https://audio.fexingo.com/business/business-models-explained/episode-0111.mp3
Audio file: https://audio.fexingo.com/business/business-models-explained/episode-0111.mp3
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Duration seconds: 771

## Resource

Lucas and Luna break down Costco's membership business model — a subscription that pays customers to shop. They dig into Costco's $120 annual fee, 11 percent gross margin ceiling, and the 'treasure hunt' merchandising strategy that drives 91 percent renewal rates. They compare it to Sam's Club and show why Costco caps its own profit on every item it sells. This episode explains how a membership model works when the fee is the profit center and the store is a break-even funnel. Specific numbers include Costco's 2025 membership fee revenue (over $4.6 billion), its 12-week inventory turn, and the famous 1.4 percent net margin that makes the model counterintuitive. #Costco #MembershipModel #BusinessModels #RetailStrategy #Subscription #TreasureHunt #JimSinegal #WarehouseClub #SamClub #ProfitPerCustomer #GrossMargin #RenewalRate #ExecutiveMembership #PrivateLabel #KirklandSignature #InventoryTurn #LowMarginHighVolume #FexingoBusiness Keep every episode free: buymeacoffee.com/fexingo

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