Costco operates a chain of membership-only warehouse clubs, where members pay an annual fee for access to a curated selection of merchandise at low prices. The core shopping experience is a no-frills warehouse format — averaging ~147,000 square feet — where goods are displayed on pallets and sold in bulk, often in large multipacks. Costco keeps its SKU count under 4,000 per warehouse, which concentrates buying power, simplifies operations, and allows Costco to run on thin merchandise gross margins (~11%) while remaining profitable. Costco operates two membership tiers: Gold Star/Business ($65/year) and Executive ($130/year), with Executive members earning a 2% annual reward on qualified purchases. At the end of FY25, Costco had 914 warehouses and 81 million paid members globally. The business model has two parts: merchandise sales generate high-volume, low-margin revenue, while membership fees are the true profit engine — nearly pure profit, recurring, and growing as Costco adds members, drives upgrades to Executive, and periodically raises fees. Membership fee income was ~$4.83B in FY25. Kirkland Signature, Costco's private label brand, represents ~33% of US sales and generates slightly better margins than national brands. Costco's growth strategy centers on opening ~25-30 net new warehouses per year (accelerating to 30 net new in FY26), driving Executive membership upgrades, and expanding e-commerce, which grew 15%+ in FY25 and is supported by Costco Logistics for large and bulky deliveries.