Costco Wholesale Corporation (doing business as Costco Wholesale and also known simply as Costco) is an American multinational corporation that operates a chain of membership-only (needing a membership to shop there) big-box retail stores (warehouse club). As of 2020, Costco was the fifth largest retailer in the world, and the world’s largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine as of 2016. In 2021, Costco was ranked #10 on the Fortune 500 rankings of the largest United States corporations by total revenue.

Costco is a membership-only warehouse that generates a majority of its revenue from retail sales and a small percentage from membership fees. Customers must buy memberships to access the warehouse and make purchases. This is executed through direct sourcing and efficient inventory management techniques.

Costco divides its business into three segments: United States Operations, Canadian Operations, and Other International Operations. These 3 business segments are reported by revenue and operating income. Of the three, the United States Operations was the largest, followed by Canadian Operations.

Sales model
The company’s rule is that no regular item may be marked up more than 14% over cost, and no Kirkland Signature item may be marked up more than 15% over cost. The company runs very leanly, with overhead costs at about 10% of revenue and profit margins at 2%. Costco’s annual membership fees (US$60/year for Gold Star, US$120/year for Executive as of 2019) account for 80% of Costco’s gross margin and 70% of its operating income.

If Costco feels the wholesale price of any individual product is too high, it will refuse to stock the product. For example, in November 2009, Costco announced that it would stop selling Coca-Cola products because the soft-drink maker refused to lower its wholesale prices. Costco resumed selling Coca-Cola products the following month.

Although the brand engages in visible efforts to reduce costs, the stores themselves are expensive. In 2013, Costco spent approximately $80 million on each of the new stores it opened. The cost is partly driven by the cost of real estate, as each new store means that they need enough space to support a building of approximately 150,000 square feet (14,000 m2) in size, a large parking lot, and often a gas station.

Lighting costs are reduced on sunny days, as most Costco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During an average sunny day, it is normal for the centre section of the warehouse not to have interior lights in use. The company has no public relations department and does not buy outside advertising. A typical Costco warehouse carries only 3,700 distinct products, while a typical Walmart Supercenter carries approximately 140,000 products.

Like many other retailers vertically integrating their food supply chains, Costco has brought in-house poultry production for their rotisserie chickens, which are a major driver of customer traffic and sales.