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Comment by pravda | Hacker News Reader

Are we sure this is not a Submarine (PR-placed) article?

"In a normal Costco purchasing example, a company might sell their product for $0.95 and Costco might retail it for $1.00. This would result in a 5% margin (in reality the margin is a bit lower, but let’s use these numbers for estimates)."

That just rings really false to me.

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They actually list their margins in their normal SEC filings. For merchandise it's usually around 11% on average. Obviously it will be higher or lower than that for specific products. Costco is able to have margins way lower than retail average (Target runs around 28% for comparison) by having much lower per-revenue dollar operating costs and by doing an absolutely stupid amount of revenue per location (a single location will average close to $200M in sales per year).

14% markup on Kirkland Signature and 8-10% on everything else.

Costco has been annoying the drugstore industry by marking up the drug section at the same markup as the rest of the store. Markups at CVS, etc. are much higher. Costco has a smaller selection and only sells the big sizes, so it works out well for them.

Just cuz it is a submarine -- god knows like 30% of the internet these days is subtle marketing -- doesn't mean the stats are fake.

Costco is able to go toe-to-toe with Walmart and Amazon for a reason: they have the margins. And as another poster mentioned, they're a publicly traded company with SEC filings that discuss revenue, costs, and other details; we can check those numbers.

https://investor.costco.com/node/22121/html

Page 28, gross margins are around 11%.

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