Costco’s new CEO, who started as a forklift driver at the company at age 17, considers one of the wholesale giant’s products to be its most valuable — and it’s not the famous hot dog deal or the rotisserie chickens.
It’s the Costco membership card.
Costco CEO Ron Vachris, who became the chief executive in January after more than 40 years with the company, told Fortune that “everything” Costco does supports its membership.
“The most important item we sell is the membership card,” Vachris told the publication.
Costco membership card check. (Photo by Kena Betancur/VIEWpress)
The membership card is essential to Costco’s bottom line. It comprised 73% of the company’s total income last year, according to its fiscal year 2023 earnings report.
In other words, memberships generated $4.58 billion in profit from Costco’s $6.29 billion net profit last year.
That’s higher than the $4.22 billion generated by Costco memberships in 2022 and the $3.88 billion in 2021, indicating growth in that aspect of Costco’s business.
Related: GM Taps Costco to Sell Chevrolet, Cadillac Electric Vehicles
Costco has taken steps to preserve membership profits recently, going as far as to crack down on non-members eating in its food courts in March.
The company also appears to be adding digital ID scanning stations at certain locations to ensure members use their ID cards when entering its warehouses.
Entry into Costco costs $60 per year for a Gold Star or business membership and goes up to $120 annually for an executive membership.
Related: Costco May Stop Selling Books Year-Round. Here’s Why.
