Costco will increase its membership prices on September 1st. The basic membership will go up from $60 to $65 per year, and the Executive Membership will increase from $120 to $130 annually.
Costco makes most of its money from membership fees, which allows them to offer lower prices on their products.
I once conducted a financial analysis of Costco’s annual 10-K report spanning three years. Each year, I found that their net profit closely aligned with the revenue generated from memberships. This suggests that Costco aims to basically break even with their product sales. Interesting and unique business concept that has led to a $390+ Billion market cap today.
Costco has around 130 million members. If the memberships are evenly split between basic and executive, Costco would add another $975 million per year in revenue from memberships with this price increase.
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When does it go into effect?
Says September 1st in the post