Costco's Profit Secret: Membership Fees Fuel 64% of Profits

Costco's core strategy relies heavily on membership fees, which generated $5.3 billion in fiscal 2025. These fees represented approximately 64% of the company's net income, highlighting a business model focused on member loyalty.

Walmart is actively diversifying its revenue streams beyond traditional retail. Its advertising business saw over 30% growth, and membership fee revenue increased by 17%. These combined profit areas now represent about one-third of Walmart's operating income.

Walmart+ members demonstrate significantly higher spending habits, with those members generally spending four times more than non-members. This indicates the success of Walmart's layered membership approach, which benefits customers, shareholders, and the company alike.