#3: only members get to shop at Costco

Costco is unique in the way that it does not allow anyone to come in and buy whatever they like. The fundamental idea is that the customer must pay the membership fee to have the ability to enjoy for the low prices.

Currently Costco has over 60 million paying members, which constitute a total of 111 million card holders (people who can go to Costco to buy).

How one entrepreneur mimiced the Costco membership model… & succeeded

Costco is probably the biggest exclusive membership retail club in the world. However, there is one even bigger membership model (non-exclusive) in retailing. It is highly likely that it has been inspired by the Costco model.

There is a story about another Seattle based entrepreneur whose company was going through a rough patch after Dotcom crash. During the spring of 2001 the entrepreneur met with Jim Sinegal to learn about the Costco model. In that meeting he really understood the value of the Everyday Low Prices model. He seemed to understand something else also…

Four years after the meeting saw the birth of the Amazon Prime membership model. Since then it has grown to include more than 150 million customers and has become one of the most fundamental parts of Amazon’s success. (A more thorough explanation of the meeting with Jeff Bezos and Jim Sinegal is depicted in the Brad Stone book “Everything Store”)