[kemitchell]

I wish Costco were accessible to basically everyone. Among some poorer people I've got to know in the SF Bay Area, having the card and confidence in the means to use it are a mark of the middle class, an aspirational thing.

Membership is an up-front cost. That excludes those who can't part with the cash for no immediate benefit. Depending on what you buy, and what else is available around you, breakeven can take a good part of the year and a sizable number of purchases. Basically, you have to have the cash flow to play with money over time, even over a short timeline like an annual membership cycle.

Costco also sells many if not all items in relatively large quantity, so membership makes more sense for those who can afford to pre-buy and store more than they need. It's the inverse of something like a so-called dollar store, which is too often where poor people get stuck buying smaller than grocery-standard quantities at higher per-unit costs.

Of course, sometimes it makes sense to pool funds, buy together on one membership, and break packs. That costs coordination. Corner stores in poorer areas where I live often do this, with business memberships and resale certificates. At a margin, of course.

I can't pretend to truly understand what it's like not being able to afford Costco. But I've had some opportunities to hear people who see it as out of reach. And to make some trips with "guests".

[jatora]

I dont understand this. All Costco memberships are functionally $65 at most. How is this beyond literally anyone in America? Am I so out of touch? Why would corner stores have to pool together to get a membership when they absolutely negate the cost of the membership from the cashback? You only have to spend roughly $6,500/year for the executive membership of $130 to cost zero. That seems like something a corner store in any neighborhood wouldn't have much issue doing. As for the non store owners... $65 is the cost of one or two fast food meals. I don't believe this.

[lurkshark]

To maybe add some framing, 37% of Americans don’t have enough cash to cover a $400 unexpected expense. Obviously $400 > $65 but I think it puts some perspective on how tight cash flow is for a good chunk of the population.

https://www.federalreserve.gov/consumerscommunities/sheddata...

[Dylan16807]

> enough cash to cover

You don't need to buy the membership with cash. Credit card, pay off $3-5 a week with your food savings, you'll barely pay any interest.

Also not having $400 would have to be the number after buying food with your paycheck, right? If you get the membership as part of your first food purchase, including that nice bag of rice, you'll be okay.

[csa]

> You don't need to buy the membership with cash. Credit card, pay off $3-5 a week with your food savings, you'll barely pay any interest.

I’m guessing you don’t know many lower income people.

Not only are credit cards generally not part of the picture for these folks, but often they don’t even have bank accounts.

[mft_]

You’re not mathematically wrong, but you assume that everyone has a rational disciplined approach to their finances, and a reasonably stable income behind that.

And for buying in bulk (which is basically what Costco offers) to work, you need a larger amount of available cash up front, and a home with sufficient safe space for storage.

And of course you need some sort of transport to bring your bulk purchases home from the Costco, often built on cheap land away from dense housing.

[Dylan16807]

> you assume that everyone has a rational disciplined approach to their finances, and a reasonably stable income behind that.

I'm not assuming that. If you get a paycheck at all you can impulse buy a $65 thing.

> And for buying in bulk (which is basically what Costco offers) to work, you need a larger amount of available cash up front, and a home with sufficient safe space for storage.

The bag of rice is cheap and compact, along with many other options. Your upfront need can be covered by your normal spend.

Yes it does need a mild amount of safety.

> transport

For sure, but I was responding about the $65 issue.

[mft_]

> > you assume that everyone has a rational disciplined approach to their finances, and a reasonably stable income behind that.

> I'm not assuming that. If you get a paycheck at all you can impulse buy a $65 thing.

Not to buy the membership, but to gain meaningful benefit from it afterwards by buying in bulk in the long term, despite the greater upfront cost, motivation, planning, etc. that that requires.

[JackFr]

As someone who has shopped at Costco using public transportation, that’s where your IKEA bags come into play. And you avoid bulk liquids at all costs.

[redeeman]

and what iphone model do these americans have?

I would be very very surprised if there were not adjustments that could be made that would significantly uplift these peoples situation

[thomascgalvin]

> and what iphone model do these americans have?

A smartphone is not an optional component of modern life. You need a smartphone to apply for many minimum wage jobs now

[redeeman]

way to misrepresent what i said. you can do that from the cheapest secondhand phone. What do you think most of these people have?

[Spooky23]

You’re probably a professional with a good wage. The working poor are too poor to have much and too rich to be poor and get benefits. They are cashflow constrained.

When I coached little league, we had parents who walked miles to games because the bus fare (1.50) for 3-4 people would push them over the edge. Vulture companies like dollar general exist because they sell consumer staples in smaller quantities at a slightly lower price, but much higher unit cost.

Costco uses an upfront membership to allow you to buy large units of products at a consistently good price. The consumer needs excess cash flow for it to work. Saving on toilet paper doesn’t work if I can’t make my car payment.

[tpmoney]

I’ve never been “need to stop at the food bank” poor thankfully, but I have been “dinner this week is rice and 50¢ frozen pot pies”, “living with 4 other people to make rent”, “boss I need more hours or I literally can’t afford the gas to come to work for the hours you’ve scheduled me” poor. And even in those times one of my very first purchases was a BJs membership (Costco like club) because it was absolutely cheaper to buy a lot of my groceries and food stuffs that way.

It is possible to be too poor to afford a membership club (even Sam’s Club). But you absolutely do not need to be a “professional with a good wage” to afford it or benefit from it.

[lotsofpulp]

Why are the dollar stores “vulture companies”? Costco and Trader Joes only puts their stores in or on the border of higher income neighborhoods. At least Dollar General is willing to locate their stores near poorer people.

Dollar General now has a similar profit margin to Costco:

https://www.macrotrends.net/stocks/charts/DG/dollar-general/...

https://www.macrotrends.net/stocks/charts/COST/costco/profit...

Dollar Tree is slightly higher but much more volatile:

https://www.macrotrends.net/stocks/charts/DLTR/dollar-tree/p...

[jatora]

Shit I guess I'm out of touch lol

[gottorf]

No, you are not out of touch. Functionally everyone can afford a Costco membership and buy staples in bulk at a higher upfront but lower unit costs. The GP's comment about a family of four walking miles to a Little League game because they couldn't afford the bus fare is an extreme outlier.

There's a large overlap between people who cannot "afford" to shop at Costco and people who spend hundreds of dollars a month on scratch-offs. Whether or not someone shops at Costco is mostly a function of preferences and behavioral choices, not dollars.

[dullcrisp]

It’s a banana, Michael, what can it cost, $65?

[unlikelytomato]

Family and neighbors shared Costco memberships when I was growing up. It's still accessible today to anyone who wants it

[Zhenya]

These are not out of luck people if this is a long term Problem. These are people who are chronically bad at allocating resources.

Even if they could afford the 65$ membership (yes anyone car). They couldn’t afford the per package goods. Is this even alluring to them? They demonstrate poor basic economic understanding.

[Zhenya]

The downvotes are hilarious.

Probably the same people who dump money into scams fronting as homeless assistance organizations.

Of course, there is no counter argument, just emotion.

[bschwindHN]

> $65 is the cost of one or two fast food meals.

Okay I'm really curious, where do you live and what are you eating for a "fast food meal"? That's at least 10x what I pay for a fast food meal, and although I know California and other places are expensive, I wouldn't have guessed they are that expensive.

[tpmoney]

These days Taco Bell for two people will easily hit $15-20 and that’s at the drive through. If you’re crazy enough to order it through door dash, that’s closer to $40

[bschwindHN]

Okay but that's a far cry from "$65 for one or two fast food meals"

[dghlsakjg]

So two fast food meals is $15-20?

[DetroitThrow]

I've had friends homeless recently, Costco was the basis of the best choices of their poverty finance even when living out of a car.

I think it's accessible to even the poorest people who work in the US, but it doesn't mean it's cheap for them or worthwhile without a home/reasonable commute.

Time is a major commodity for people working 2 or more jobs and an hour and back commute to Costco is often not worth it.

[insane_dreamer]

> How is this beyond literally anyone in America?

not only is the membership cost up front, but because you're buying in bulk, the cost of the food is also up front; that doesn't work if you're literally living 2-week paycheck to paycheck. Nearly 40% of Americans have less than $500 in savings.

> $65 is the cost of one or two fast food meals ... Am I so out of touch?

yes

[tpmoney]

When I had less than $50 in savings and lived paycheck to paycheck, I still had a BJs membership. When I was growing up living in a single teacher income home and “K-Mart” was our luxury store, we had a BJs membership. Sales clubs like Costco and BJs are absolutely affordable even to the working poor.

[strix_varius]

> $65 is the cost of one or two fast food meals.

You mean for a family... I hope?

[blitzar]

$65 is just the cost of one or two minutes of fuel for a private jet

[wavefunction]

You are out of touch

[wespad]

In San Diego, we have a discount store called GTM that buys Costco closeouts and scratch-and-dent items and resells them for less. It has a loyal base of bargain shoppers, and it feels a bit like a treasure hunt.

You can buy normal or even individual quantities, like a single roll of paper towels, with no membership required. I imagine other big cities have similar stores, probably in lower-income areas, that fill a similar role.

[niemandhier]

In many cases that is the desired effect:

Cashflow constraints are a good predictor for problematic behaviour.

Example: Being poor is not the reason for drug addiction, but drug addiction will make you poor in the long run.

The one good thing about this is: As low liquidity is often used as a classifier to gate access, a single kickstart payment can sometimes do wonders.

A security deposit for a flat and money for a Costco card can change lives.

[daseiner1]

And thereby it is necessarily impossible for Costco to be available to everyone. The spending dynamic you've described is Costco.

[Gareth321]

Costo makes almost no money on food sale, and almost all of its profit from the membership fee. It's required for their business model, which is VERY friendly for its employees. This is an example of capitalism done right.

[dghlsakjg]

This is such a misconception/oversimplification that drives me nuts and it is so common. It isn’t at all supported by their filings.

In past years their profits match the approximate amount of revenue from their memberships (which, I suspect is the origin of this idea), although recently their profit exceeds their membership revenue by a fair margin (total membership revenue was less than half of operating income for 2025). Membership is not what causes them to be profitable since the “cost” of the membership is operating the rest of the business. You can’t separate retail sales from membership sales since they mutually require each other in the business model. If they got rid of their retail sales (which are, in fact, more profitable than membership sales on their own) then the membership would be worthless. The reverse is not true.

[Gareth321]

It's true that in recent years profits have exceeded membership revenue, but that still comprises 67% of total profit. It is still a requirement for their business model to operate, unless you're arguing that they would be comfortable with significant losses in the lean years, which I would contest.

[dghlsakjg]

That’s a deceptive 67%. You divided the pretax membership revenue by their post tax profit. If we use the same math we see that they get almost 70% of their profit from sales at the same time.

It falls to less than 50% when you properly compare it to pretax profits.

It also doesn’t factor in the 2% rebate that a huge number of members receive.

Costco’s total net sales for fiscal 2025 were roughly $268 billion. With executive members driving ~73.6% of that, and a 2% rebate on qualified purchases, a rough back-of-envelope estimate would place total rebates issued in the range of $3–4 billion, but Costco does not publicly break this out as a discrete figure in its financial statements.

In any case, I’m not saying it isn’t a significant source of revenue, I’m saying that “they only make money/they make most of their money from memberships” is a deceptive framing that is oft repeated. It makes it sound like they are selling things at cost when they aren’t. Their margins are in line with the grocery industry as a whole. Their pricing is an effect of low opex and volume. They make most of their profit from selling things. If they didn’t charge for membership they wouldn’t lose money.