Listening to the Aquired podcast about Costco. Lots of interesting history and economics in it.
- The start of discount retailing by figuring out how to skirt manufacturer RPM's (resale price minimums) with the "club format," Fed-co (nonprofit) to Fed-mart (
- The first US Hypermarket, idea imported from France
- How Costco evolved from retail to wholesale warehousing, where manufacturers take care of all the logistics: once a pallet is dropped off, it is immediately available for sale.
- To Price club, which opened up to credit union members as a benefit, which had a huge word-of-mouth advertising.
- Limiting # SKU's (#products=3800) to increase volume and get lower prices from manufacturers.
- To adding hot dogs from Hebrew National, $1.50 for hotdog and a drink, Costco's only loss leader
- Costco turns inventory 12x/year, where vendors finance Costo's inventory because it sells faster than the payment terms (pay manufacturers within 30 days).
- To two-part pricing (selling at MC and making money on the membership fees).
- Costco clones: Wal-mart, Home Depot, Starbucks
HT: Charles
No comments:
Post a Comment