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Costco's median gross profit margin is about 12%. (Walmart's is about double that.) Annual inventory turns: about 12x. (1.5x as fast as Walmart.)
by rahimnathwani 3y ago
Costco's median gross profit margin is about 12%. (Walmart's is about double that.)
Annual inventory turns: about 12x.
(1.5x as fast as Walmart.)
- lotsofpulp 3y agoWhy is gross profit margin relevant here? Are the other expenses at Costco not related to their business? Their profit margin is 2.5% or less for 15+ years. Seems more accurate to use that number, which is also nearly equal their membership cost * number of memberships.
- rahimnathwani 3y ago"Why is gross profit margin relevant here?" I replied to a comment that said Costco has "barely any markup". Markup and gross profit measure exactly the same thing. If you know one, you can calculate the other. A gross profit margin of 12% means Costco's markup is over 10%. (Or 8% to 9% if you don't count membership fees.) This is low, but it's not nothing.
- xethos 3y agoI still don't see the relevance - couldn't the higher gross profit margin be accounted for by having a markup of only slightly above zero, but supplemented by membership fees?