> Different with Netflix, you don’t buy actual products that they also profit on.
You don’t do that at Costco either, except by accident: Costco by design breaks even (there’s some variability because planning and reality diverge) on everything else and makes money on membership fees. That’s the value proposition: you pay for a membership, and you get stuff at what it costs Costco to get it to you.
Costco electronics are often times priced very similarly to Best Buy and any other major retailer (see for example Apple MacBook and iPad, which are items that I regularly happen to buy every few years so I actively keep an eye on their price trends). If Costco is breaking even on them, are you implying that also the other retailers are? Otherwise, are they not, actually, just breaking even on every item? Tons of people buy their Apple electronics at Costco, so I have to assume it is a significant percentage of their revenue.
> Costco electronics are often times priced very similarly to Best Buy [...] If Costco is breaking even on them, are you implying that also the other retailers are?
They break even in aggregate across everything that isn't memberships, but there is a bit of variability in margin, so, maybe, maybe not.
OTOH, brick and mortar electronics retailers have for quite a while had narrow margins and pushed things like high margin extended warranties to make profit (or, for the vast majority of them, just gone out of business.) Costco includes an extended warranty with purchase.
> Tons of people buy their Apple electronics at Costco, so I have to assume it is a significant percentage of their revenue.
Probably not. Apple electronics are big ticket items, but people aren't buying new iPhones or MacBooks all that frequently. The revenue from a person buying a MacBook and iPhone every other year is dwarfed by that of a person buying groceries every week.
Can't speak for all tech, but I think Apple has very careful price controlling on their products. I wouldn't be surprised if retailers don't make as much on them but keep them to draw shoppers in.
For other tech, it's up in the air. Maybe Costco does make a profit but not as many people buy tech at Costco than at Best buy, for instance.
You don’t do that at Costco either, except by accident: Costco by design breaks even (there’s some variability because planning and reality diverge) on everything else and makes money on membership fees. That’s the value proposition: you pay for a membership, and you get stuff at what it costs Costco to get it to you.