Costco just flipped the script, and while most supermarkets are launching coupons, flash deals, and free shipping to attract new customers, Costco has decided to do the opposite and try a new technique: nothing. This not-new strategy is based on mandatory membership (as you probably know, Costco works with membership, if not, we’ll explain it a few paragraphs below), and for them, it’s the most effective method. With this model, they build user loyalty and offer discounts or programs that are attractive to them, generating millions of dollars in revenue. So what changes is Costco bringing? We’ll tell you.
A very profitable business model
Costco has always operated through membership. That means not everyone can shop at Costco, only those who belong to its buyers club. This membership, of course, has different types and prices, but in 2023 they collected 4 billion dollars just from memberships.
So, it’s clear that Costco’s success isn’t about selling cheap, it’s about selling belonging. People love to feel part of something, and Costco knows how to play that card very well.
The trick is in how they sell it
As we mentioned earlier, Costco stands out from the rest because it doesn’t need to make money from the products. Their profit margin is minimal because what actually brings them profits is the annual fee their customers gladly pay. Because once you’ve dropped $65 or $130, you’re not going somewhere else to buy the same thing for more. You make it worth it.
And that exact effect is what guarantees the aisles are always full. There are no occasional shoppers here: only those who are committed come back.
No card, no entry
It’s that simple. There’s no option to “browse” or “see what’s there.” Costco doesn’t want casual shoppers, it wants people who come back every week, who know the aisles by heart and trust that the prices are always good, with no need to compare products or prices.
What memberships does Costco offer?
- Gold Star: the basic one, costs $65 per year and gives full access to everything the store offers.
- Executive: $130 per year, but gives you 2% back on purchases and adds extra perks.
- Digital Shopping: designed for those who won’t go to physical stores. Just $50 per year, ideal if you buy everything from the website.
If you want to get a membership, you can do it at the counters in physical stores or through Costco’s official website. They’ll ask for your information and once you’re registered, you’ll be part of the exclusive club.
Having a Costco card has become a credential. It’s like saying, “I don’t waste money.” It’s savings with identity. And that explains why so many families renew it year after year.
Top stores in the U.S.:
- Issaquah (Washington): it’s their flagship store. It’s right next to corporate headquarters and sets the pace.
- Las Vegas: the constant flow of residents and tourists means product turnover is extremely high.
- Honolulu: in a city where everything tends to be more expensive, Costco becomes a lifeline.
- Salt Lake City: the secret here is how quickly they rotate products. There’s always something new, and that builds loyalty.
While others obsess overlooking more modern, Costco focuses on being more useful. Their strategy is simple: make people feel part of a community. And with millions of loyal customers who’ve already said “yes” to their model, the future looks bright for them. The latest announcement makes it clear: Costco isn’t changing its formula. It’s doubling down. And from the looks of it, it’s going to work out just fine, or at least, we hope so, because we love saving too!