How much does Costco membership cost? Rewards, lower prices and member fees
On the search for lower prices? A Costco membership may be able to help... as long as you are prepared to buy in bulk to save.
Unlike most traditional retailers, Costco requires shoppers to purchase an annual membership that allows them to shop at their locations across the country (in addition to making purchases online). Worldwide, Costco has reported that it has 127.9 million cardholders from the twelve countries it operates. The company works with suppliers to bring down prices, but often, this requires shoppers to purchase items (particularly in the case of food) in bulk.
How much does a membership cost?
The most basic membership, Gold Star, costs $60 a year and allows for two members to be listed on the account. For $120 a year, Costco offers an Executive membership, which, in addition to the benefits provided by the Gold Star level, provides two percent Annual Reward and additional discounts on Costco services (i.e., travel, tires, medical services, etc.).
Before committing, a potential member should understand that the price of joining pays off so long as the membership is used.
How does Costco bring down prices for members?
The company’s CEO, Craig Jelinek, has said that Costco can “offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers.” By limiting “overhead,” Costco is able to run a “tight operation” that allows the company “to pass dramatic savings to our members.”
Additionally, like other retailers, Costco has a private label, Kirkland Signature, which can compete with name brands and provide shoppers with a less expensive alternative.
Why is Costco’s gas cheaper than its competitors?
In nine countries, the company also operates self-service gas stations that often compete to bring the lowest price to its members. Unlike many other gasoline retailers, Costco’s gas business often operates at a loss, but according to the product review site Ascent, the lower prices attract customers to the location.
If one has to drive out to Costco to fill up their tank, they may be more likely to take a trip into the store, thus making up for the losses they incur.