Costco makes the majority of profit from membership fees, they've already profited from you before you have even made your first purchase. Arguable any profit they make from what you purchase is where you are being 'ripped off' but because the savings and return policies are better than the competition they avoid the 'pissing off'.
Are you sure about that? Their average markup is around 10%, so that would mean that the average member would be spending $600 or less in the store per year.
