Some revenue streams matter more than their size suggests
Most people assume business giants make money from their main product. Often, the real economics sit elsewhere. Secondary revenue streams may be small in revenue, but much larger in profit contribution. Costco is the cleanest example: membership fees are only 1.9% of revenue, but roughly 52% of operating profit.
Revenue share vs. profit share by secondary revenue stream
Sources: Company FY2024 annual reports / 10-K filings: Apple, Amazon, Costco, McDonald's.
Notes: Profit share uses the closest profitability metric disclosed by each company.
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