Costco Members Are The Target Of A New Money-Making Initiative

The company that brought you bargain bulk shopping, $1.50 hot dogs, and surprisingly cheap Kirkland signature products intends to make more money by encouraging membership upgrades, selling targeted third-party online advertisements on its website, and partnering with a buy now, pay later service.

Costco Wholesale executives discussed these new initiatives during a fourth-quarter 2025 earnings call with investors. Not that Costco is having a problem making money. Net income was $2.61 billion in Q4 2025, an increase of 11% from last year, Costco Chief Financial Officer and Executive Vice President Gary Millerchip said in the September 2025 call. That includes $1.72 billion in income from membership fees, an increase of 14% from the year before, he added.

Costco aims to make additional revenue by improving its website in ways that will provide "more relevant messaging" to customers depending on what sort of membership and co-brand credit card they have, Millerchip said, per a Seeking Alpha transcript. He added: "We spent a lot of time as a team focusing on how we can continue to invest in improving the digital experience and making it more convenient for members to shop, and we've had some good progress in those areas."

Some of the relevant messaging on Costco's website includes telling non-members about the benefits of becoming a Costco member and encouraging Gold Star members, who pay $65 annually, to upgrade to a $130-per-year executive membership. "Co-brand cardholders will be shown offers associated with ongoing spend campaigns, while non-cardholders will be shown acquisition offers," Millerchip said.

Costco is also doing well with its recently launched "buy now, pay later product with Affirm," Millerchip told investors on the call. This product, announced in May 2025, allows customers to craft personalized payment plans for items acquired on Costco's website. It's available for purchases between $500 and $17,500, per a release from Affirm.

Costco's enhanced website will also be able to deliver targeted advertisements to its users. "These digital capabilities are also a key enabler for retail media, as they allow us to target specific ads that deliver greater value for both members and suppliers while always honoring the privacy choices of our members," Millichap told investors.

Costco only recently started developing the tech to create targeted advertising for its 75 million household members both on and off its website, Marketing Brew reported in June 2024. Meanwhile, companies such as Walmart and Target have been selling online ads for years. Costco's Assistant Vice President of retail media, Mark Williamson, admitted to Marketing Brew that the company entered the online advertising game late and only "when it became clear to the leadership team ... that retail media isn't just a profit center ... When they determined that retail media revenue could directly drive increased value for our members, that's when they said, 'Okay, this is something we need to get involved with.'"

Whatever money Costco does earn from advertising would be used to help keep prices low, Williamson told Marketing Brew. Indeed, Millerchip described mitigating the impact of tariffs to keep prices low for its members as a top priority in his call with investors. This includes shifting toward more local sources, which might be a good reason to stock up on Costco items from Canada, Mexico, China, South America, and Europe.

Yet even though its involvement in online advertising is in its early stages, Costco could be in a good position for explosive growth in the sector. That's because of its large loyal membership base and overall customer trust in the company's brand, according to a report from digital market research firm Emarketer.