What Is Costco's Stated Reason for Requiring Memberships?


Quick Answer

Costco's stated reason why membership is required is due to the fact that originally, it only sold to small businesses in order to put back into the economy. To keep that ideal of supplying for the economy while keeping its quality and quantity of cheap prices, Costco requires a membership. The membership fee supplies more money to continue supplying at low costs while still being able to sell to small businesses at prices they can afford, notes Costco.

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Full Answer

Membership to Costco allows it to pass the savings on to members. A large membership base and tremendous buying power results in the best possible prices for the members. If membership was free to the public, Costco could not have low prices because the expenses of supplying the store would outweigh the profits, according to the Referenceforbusiness site.

Costco has three levels of membership: Executive, Business and Gold Star, as reported by Costco. Executive is the highest level of membership with the most rewards and cash back value. A Business membership supplies to all official businesses, non-profit organizations and government organizations. Gold Star is available to those who do not qualify for the business membership. All memberships are refundable if the customers are not happy with their experience at Costco.

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