Costco's newest store type could sorely disappoint members
The warehouse club giant is taking a leap, but members may not be happy.
Costco differs from other retailers in that it charges members an annual fee to get in the door and relies on those fees for a big chunk of its revenue. It's because of those fees, in fact, that Costco is able to offer the low prices it's known for.
Costco doesn't need to turn as big a profit on the inventory it sells because it collects $65 or $130 a year from every member household. For this reason, Costco can also afford to take a loss on certain items.
