Costco is the world’s second-largest retailer by sales. Its business model is highly unusual and has been remarkably successful. Costco offers its 115 million-plus paying members low prices on a limited selection of nationally branded and private-label products across a wide range of categories, which it sells in large sizes or bulk packs.

Costco’s business model achieves rapid inventory turnover and highly efficient store operations, allowing it to operate profitably at significantly lower gross margins than most of its peers.