[cpleppert]

>>Did you notice the data point in the article that Costco makes $2 billion in membership revenue and yet makes $1.7 billion in profit, which means they effectively lose money on their sales?

I'm pretty sure the revenue isn't net. It would mean they have absurd retail margins on their members and negative ones on every other product sold; which doesn't make a lot of sense.

>>In fact, a little known feature of Costco's business model is their ability to sell all their stock well before their suppliers require payment for goods (Net 30)? This means they have an effectively _negative_ cash conversion cycle, or in other words, their suppliers are paying to stock their products.

That could just be their way of handling stocking fees. They handle a lot of merchandise they can't afford to stick into inventory.

[iopq]

No, they make money on their products, but the costs of workers/rent/etc. is what costs them more than the profit on the goods