# How Costco Makes Money on the Membership Not the Merchandise

Page: https://stenobird.com/podcast/business-models-explained-with-fexingo-subscription-marketplace-saas-and-service-companies-7871638/how-costco-makes-money-on-the-membership-not-the-merchandise
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-not-the-merchandise.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: 2026-06-17T04:51:02+00:00
Episode link: https://audio.fexingo.com/business/business-models-explained/episode-0057.mp3
Audio file: https://audio.fexingo.com/business/business-models-explained/episode-0057.mp3
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Duration seconds: 651

## Resource

Episode 57 of Business Models Explained with Fexingo breaks down the Costco business model: why the warehouse giant earns most of its profit from membership fees, not the stuff it sells. Lucas and Luna walk through the numbers — membership revenue versus net income, the 14 percent gross margin cap, and how Kirkland Signature turns a commodity into a loyalty driver. They also touch on the tensions of raising the fee and the limits of the model outside the US. If you've ever wondered how a retailer can sell a hot dog for a buck fifty for forty years and still thrive, this episode is for you. #Costco #MembershipModel #RetailStrategy #KirklandSignature #BusinessModel #SubscriptionRevenue #WholesaleRetail #GrossMargin #LoyaltyProgram #PricingStrategy #RetailEconomics #WarehouseClub #Business #BusinessModels #FexingoBusiness #BusinessPodcast #PodcastEpisode #RetailTrends Keep every episode free: buymeacoffee.com/fexingo

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