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Comment by iudqnolq | Hacker News Reader

My experience is the big ticket items are all fine products at normal prices, but there's no reason to pick Costco for them. I suspect it's where they make a lot of their profit, considering their groceries are famously low margin. I buy groceries and gas exclusively there.

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The reason to pick Costco for appliances is because you get a 4 year warranty if you use Costco credit card (in the US).

Here in UK the #1 reason to get them from Costco is that they give 5 years warranty on all electronics and home appliances, way beyond what the manufacturer offers. I'd happily buy a new TV or a fridge from them for that reason alone.

Almost all of their profit is from membership fees. https://investor.costco.com/node/24021/html

Sales almost equal merchandise cost plus selling expenses. Membership fees add $984 million on top of that.

I strongly suspect it's the extra services that third parties sell through them. Like the vacation packages, air conditioning installation, etc. We almost got a Puronics filter through them, but stopped short when we found out that it was $9000 at Costco, but $6000 through an independent installer.

Costco’s profit is all membership fees. Everything else is (in aggregate) sold at cost. This is public information in their 10-K filings.

For the hotel and travel stuff, they get a commission like other travel agents/channels.

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