How Costco Became A Massive 'Members Only' Retailer

Costco makes billions doing what in retail might once have been thought unthinkable: charge people to shop there. The company draws most of its income from membership fees, and has a nearly 90 percent membership renewal rate. It charges very low prices on goods, rotates its inventory, and pays employees better than the retail average. But how long can it last?

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[trex]

Knowing that Costco treats their employees right makes me feel good about shopping at Costco's. You generally don't feel like they're out to screw you over.

[el-hplj]

costco has paid every employee "covid pay" for months adding on 2-4$ more per hour. Thats an extrodinary amount of money and a classy thing to do to show employees their hard work and commitment is everything

[acommentator]

my mom has a friend who had bought a couch at cosco circa 2009. in 2018, when they were getting ready to move, she realized she couldn’t take it apart and it being nearly a decade old, the manual was nowhere to be found. she went down to costco and asked them how she was supposed to take it apart. they explained to her that she shouldn’t worry and they’ll send someone. a week later, a moving truck shows up at their door. costco workers come in, take apart the couch and take it out. she asks where they’re going and they reply that they’ve been told to take this one and replace it at their new house. the thing was absolutely trashed, worn and torn with stains, the whole shebang. no way they could resell or salvage it. no warranty, nothing AND THEY JUST GAVE HER A NEW $2500 COUCH.

[myausstudy]

A mere 3 visits to Costco to fill petrol in my car recovers my annual membership fee. All other savings thereafter are a mere bonus!!

[cgasucks]

My cousin started working at Costco in the early 90s as a way to pay his way through college. He thought it was a temporary gig for him. He's still working there today.

[starwars]

Been working at Costco for the last six years. Honestly, it’s a decent place to work. If you can deal with certain, painful, customers then it’s a good place to work.
The benefits are also really nice.

[b]

Fun fact: You don’t need a membership to purchase alcohol or wine, to eat at the food court, or to be seen by the independent optometrists. You can also tour the warehouse before purchasing a membership if you’re unsure about committing.

[dkb]

8:15 Unmentioned is that Costco's turnover rate, around 7% vs 20% for similar retailers is a huge savings to their bottom line. It costs up to 20% of an employee's annual salary to hire and train a replacement. Helping achieve this is a perk that certainly reduces profits, providing health care coverage to all employees.

[mackpines]

$60 per year is not bad at all.
It pays for itself within 30 minutes of me entering the store.

[buttofthejoke]

I like the fact that they pay their employees well. That alone translates in good customer service (I feel good shopping there, seeing genuine smile or at least, not seeing defeat like at Walmart).

[petermashak]

When I joined Costco in the early 80s, there was only one store, in Seattle. You had to have business license to join. There were times, during that period, I was the only person in the store. I told all my friends, the place would never make it...😂

[BriannaBobadilla]

My family has had the executive membership for around 15+ years and it’s been worth it this entire time. We’re a big family so we spend a ton of money there. It has always been a great experience.

[luvsail]

We bailed on Sam’s a few years ago and joined Costco and never looked back. We’ve found the merchandise to be of generally higher quality, good value for the price, and customer service is excellent. The fact that their employees are treated well is important to us as well.

[mackisbrocklesnar]

I don't mind paying a bit more to shop. Treating and paying workers right is important.

[gregscott]

During the height of Covid, my Costco had line ups of members waiting to get in that wrapped around the warehouse. Costco limited the number of people in the store for social distancing, but the members never stopped coming and the sales and stock price prove it.

[dianedonohue]

Treating the employees well shows because their customer service is always exemplary. Also, they're products are generally of high quality- lots of organic items and the return policy is easy and courteous. It's my favorite store!

[chrisadkins]

My Dad and I were members #99 and #100 in Seattle when Costco opened, it was funny because back then everyone in line was giving each other nods and smiles like "Ain't we smart".

[dragonmammma]

How do I love Costco? Let me count the ways: 1-The optical department alone saves me way more than my annual membership fee. 2-I can shop while I get my tires rotated. 3-I can fill up my gas tank when I'm done shopping. 4-I like to buy local. 5-They treat the employees well, unlike the jerk who owns Amazon. 6-Easy returns if you don't like something. 7-Great prices. My husband eats a ton of peanut butter, and I can get 56-oz of ORGANIC peanut butter for 10 bucks! Can't match that anywhere else. 8-...I could keep going, but you get the idea.

[gibb]

" Members are fiercely loyal" ouch so true

[gigamay]

Its funny how don't even talk about gasoline. In my experience, on average they are 20 cents lower per gallon. For a 15 gallon tank for most cars, that's $3 in savings per visit. That makes up my $60 membership fee per year right there. Everything else is gravy.