If you find it helpful to learn just HOW successful business people think, you’ll want to read this article on Costco’s business strategy.
Some things I learned…
*Their stores never carry more than 4000 items - but in bulk. A Wal-Mart carries 125,000.
*They never price anything more than 14% above their cost.
*Their profit essentially comes from their membership fees, not retail mark up (remember that if you think you can get rich by only charging 14% above your cost!)
Quotable Quote:
The other tenet Sinegal insists Costco follow is that it never sells anything at more than 14 percent above cost. If a hypothetical pair of socks cost them a dollar, they sell it for $1.14. Not a cent more. “If you study the retail business you will find all sorts of examples of people who thought that they could charge another dollar for an item, and another dollar here, and they could cut the wages on their employees, and the net result is that you have lots of companies that wind up going out of business,” Sinegal said.
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