Quote Originally Posted by big mac View Post
Yikes---If you believe that Costco only works on a 15% profit margin-----then it is time to wake up and smell the roses. There is no way they could ever stay in business at that rate. IMHO
I love roses.

They make their $ selling memberships. My neighbour is a buyer for them and it's a well known (or I guess not so well known in this case) fact.

http://www.forbes.com/sites/greatspe.../#2cbb56353d42



Great Speculations
Buys, holds, and hopes

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Trefis TeamTrefis Team, Contributor
The largest warehouse club in the U.S., Costco, has seen its gross margins fluctuate around the 10.6% mark over the last four-five years. From 10.87% in 2010, the company’s gross margins fell to 10.59% in 2011 and 10.57% in 2012. In 2013, the margins recovered to 10.64% and they further increased to 10.77% in 2014. While the historical change in margins has been a little wayward, we expect margins to decline slowly going forward through to the end of our forecast period. We forecast a negative 0.02% change in Costco’s gross margins every year, which will take down the figure to 10.63% over the next five-six years.

While most supermarkets and department stores markup their goods by more than 25%, Costco keeps its markups low at 15%, that allows it to offer products at lower prices than its competitors.