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How does Costco keep its gasoline so cheap?

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As other answers have pointed out Costco has some unique advantages that allow them to sell gas at such a low rate: Costco is unlike the vast majority of stores in the United States because it generates money not only from the products and services it provides, but ALSO because it charges a yearly membership fee. read more

The average American spends $115 per month on gasoline. Therefore, 0.20*$115= $23 lost relative to competitors. With that being said, however, the subscriptions are irrelevant of the gas prices. So Costco can sell gasoline at very, very low profit margins compared to other gas providers—and still make a good amount of income via subscriptions. read more

In the subsequent months, Costco was granted its liquor license while the gas station moved through the zoning process. Then the politics of the D.C. gasoline business intruded: A group of gas station operators challenged the zoning approval and sought to retroactively protest the liquor license. read more

Costco offers cheap gas exclusively for its members, and it's a great way to attract and retain new customers. Costco offers cheap gas exclusively for its members, and it's a great way to attract and retain new customers. read more

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