# How Costco Makes Money on the Membership Fee

Page: https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/how-costco-makes-money-on-the-membership-fee
Text version: https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/how-costco-makes-money-on-the-membership-fee.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: 2026-06-06T16:55:56+00:00
Episode link: https://audio.fexingo.com/business/business-models-explained/episode-0035.mp3
Audio file: https://audio.fexingo.com/business/business-models-explained/episode-0035.mp3
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JSON: https://stenobird.com/v1/public/podcasts/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/episodes/how-costco-makes-money-on-the-membership-fee
Duration seconds: 552

## Resource

In this episode, Lucas and Luna break down Costco's counterintuitive business model: the company deliberately limits its merchandise markup to 14 percent on most items, relying on membership fees for the bulk of its profit. They walk through the economics of a $60 Executive Membership, explain how Costco's inventory turns 12 times a year versus the retail average of 4, and compare the model to Amazon Prime. The conversation also touches on why Costco's treasure-hunt shopping experience defies traditional retail wisdom and how the model creates a moat that competitors struggle to replicate. #Costco #BusinessModel #MembershipEconomy #Subscription #Retail #ProfitMargin #InventoryTurn #AmazonPrime #TreasureHunt #KirklandSignature #BusinessStrategy #PricingPower #CustomerLoyalty #Moat #Business #FexingoBusiness #BusinessPodcast #ModelsExplained Keep every episode free: buymeacoffee.com/fexingo

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