How does Costco work?

Answer: Only members can make purchases, it's an online store and a local store, the annual fee costs $ 60 for gold star and business memberships.

Basically, Costco works on the principle that buying in bulk is cheaper. And when you buy in bulk, the unit cost goes down. It's a basic feature of economics. Just think of loo roll - a pack of two rolls might cost £1, meaning each roll is setting you back 50p. But a pack of four might cost £1.50, slashing the cost of each roll down to less than 38p. Costco works along these lines. It's basically a giant warehouse, where normal retailers will go and stock up on the goods they need, except that members of the public like you and me can go and take advantage too.