Costco Shakes Sam's Club and Gives the Best News to Those Who Want to be Members

While Walmart and Target keep betting on the classic retail model, Costco has carved its own path. Its strategy is based on a mandatory membership system that has proven to be a revenue-generating machine. This formula allows the chain to keep prices low while ensuring a loyal customer base.

A Model That Ensures Stable Income

Unlike its competitors, Costco doesn't let just anyone shop: to access its stores and take advantage of its discounts, the customer must first pay an annual fee. In 2023 alone, the company collected more than $4 billion solely from this concept. That money serves as a financial cushion to operate with tight margins on its products.

This means that, although they don't earn much per item sold, membership income allows them to sustain low prices. In fact, Costco's model focuses more on earning from subscriptions than from direct product sales. Additionally, those who pay for a membership tend to visit the store frequently, motivated to make the most of their investment.

Memberships for Every Type of Customer

Costco offers several options for its members, according to their needs: the basic membership, called Gold Star, costs $65 a year. On the other hand, there's the Executive option, which costs $130 annually but offers a 2% cashback on purchases and other additional benefits. The Digital Purchase is also available, a $50 subscription that provides access exclusively to online shopping.

This system not only builds customer loyalty but also creates a barrier to entry that encourages belonging. For many, having a Costco card is almost a symbol of planned savings.

The Most Visited Stores in the United States

Although Costco has an international presence, some of its locations in the United States are especially popular. For example, the store in Issaquah, Washington, is one of the most iconic due to its proximity to the company's headquarters. In Honolulu, Hawaii, the store attracts tourists and residents thanks to its competitive prices on an island where everything tends to cost more.

In Utah, the Salt Lake City branch stands out for its high product turnover. On the West Coast, the San Diego store has great relevance in the border region. And, in Las Vegas, the combination of residents and international visitors keeps a constant flow of shoppers.

This business model has been so effective that many wonder why other large chains, like Walmart or Target, don't imitate it. The reality is that Costco's exclusive and membership-focused approach represents a risk for companies that rely on a massive volume of shoppers without entry barriers. Meanwhile, Costco continues to gain in loyalty, solid margins, and total control over its customer community.