The CEO of Costco states that the most crucial item the store offers is not the $1.50 hot dog.

Costco offers a wide variety of items for purchase, including gasoline, hot dogs, and gold bars.

The CEO of the wholesale chain states that the items you remove from the warehouse's large shelves are less important than what you keep in your wallet.

In a recent interview with Fortune, Ron Vachris stated that the membership card is the most crucial product we offer.

The membership base of Costco's comprises 130 million members, who pay an annual fee ranging from $60 to $120 for access to the chain's stores.

While the cheaper Gold Star membership grants access to all warehouses and deals, the pricier executive membership includes a 2% cash back on every purchase.

Since 2016, Costco's member base has grown by 50%, generating $4.6 billion in revenue from membership fees last year. Additionally, 90% of Costco's cardholders renew their memberships, indicating their loyalty to the company.

To keep customers coming back, Costco's warehouse is designed with affordable gasoline stations and the famous rotisserie chicken placed in the back.

"Everything we do supports that transaction," Vachris said.

To determine whether to sign up for a Costco membership at the $60 or $120 tier, you can use some simple math to make the decision.

To obtain $60 in cash back with the Executive Membership, you must spend $3,000, resulting in an effective annual membership rate of $60.

If your annual spend is less than $3,000, opt for the lower-priced plan.

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