Markup is Kept to a Minimum
Volume is key and membership fees give some financial freedom to keep prices low along with effective negotiations with vendors to keep Costco customers enjoy mark down prices. Given this, Costco does not mark up any items more than 15 percent. Notably, to keep the overhead in check, Costco does not increase its executive pay much either. Its CEO earned $5.4 million in compensation in 2013 in contrast to the $26 million that the CEO of Wal-Mart earned on the same year.
