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And this is exactly why I only shop at Costco. While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll re
by thanhhaimai 10mo ago
And this is exactly why I only shop at Costco. While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.
- Waterluvian 10mo agoBuying in bulk is about having the ability to both afford next week’s food this week and have the means to store it. Not to mention the annual subscription. Responding to a comment about dollar stores preying on the poor with, “that’s why I shop at Costco” is… a choice.
- joncp 10mo ago... and a car to haul all that stuff, and time to drive to the nearest Costco. It really is a luxury that a ton of people can't afford.
- geodel 10mo agoIndeed. And I say this as Costco member. There are lot of factors that make Costco memberships work. And a lot of people won't be able to make much benefit out of Costco membership.
- andrew_lettuce 10mo agoI say this as someone who admires their business model and how they treat customers & employees: your typical Costco experience is drive to the suburbs, spend $500 and load up your car with nice to have food products and discretionary purchases. Poorer people cannot do any of these things.
- cyberax 10mo agoWhy is car a luxury? A clunker car worth $2000 will still work fine for years with minor maintenance that can be done by yourself. Oh, yeah. Cities. Cars are expensive when you live in a 100 sq. ft. box. Perhaps that's what is causing problems?
- JambalayaJimbo 10mo agoThe cost of the car itself is minimal compared to insurance, gas and storage costs.
- Waterluvian 10mo agoA competently planned city makes car ownership unnecessary.
- cyberax 10mo agoA competently planned _country_ makes cities that only seem to create generational poverty unnecessary.
- energy123 10mo agoSprawl comes from urban planning. I think you mean to say a certain approach to planning makes it unnecessary.
- tlb 10mo agoThere's no way to plan a city so most people can walk to a Costco. Warehouse stores are an inherently car-based phenomenon.
- Dylan16807 10mo agoThey don't require everyone to own a car. At the very least, they can run an efficient delivery service. And there's got to be a way to make a 3 hour rental or single taxi drive once a month much cheaper than owning a car.
- pluralmonad 10mo agoTime to go and acquire necessary food stuff is not a luxury in any reasonable framing. What is the alternative, eating drive-thru every day or having Instacart deliver overpriced groceries?
- adrianN 10mo agoI believe eating food from street vendors was the usual way for paupers until quite recently. Recall that it was common to rent a bed for a few hours and share it with someone who worked different shifts.
- strix_varius 10mo agoThe fact that the strategic wedge with which a successful, relatively socially-positive business manages to sustain itself isn't universally accessible doesn't negate its value. The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.
- LorenPechtel 10mo agoFor me it's very simple: What I save on glasses pays for my membership. I don't go all that often but it's still worthwhile.
- andrew_lettuce 10mo agoThis is true, but a valuable - and damning - observation that this variation in business model, that seems to be both decent and profitable, is so rare
- buellerbueller 10mo agonot sure your comment is any less insufferable.
- Dylan16807 10mo ago> the ability to both afford next week’s food this week At minimum that's everyone on a normal paycheck, paid every two weeks. There are situations where someone couldn't get together a few days' pay at once, but that's a tiny fraction of situations. And the means to store most food is a two foot square of space in a room somewhere. And then most of the rest fits in the empty fridge space you already have. And there are deals there that can be useful for your wallet right away. This isn't something where you have to put up a ton of money for months before you benefit. The biggest issue is probably that costco isn't easy to get to.
- gruez 10mo ago>While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well. This doesn't make any sense. Costco makes a profit on the goods sold as well. They have every incentive to sell you as much stuff as possible. That's why they also engage in the usual retail tactics to increase sales, like having the essentials all the way in the back of the store, and putting the high margin items (electronics and jewelry) in the front. They might practice a more cuddlier form of capitalism than dollar general, but they're still a for profit retail business.
- xingped 10mo agoI see you're not terribly familiar with Costco. Membership fees account for the vast majority of net operating income for Costco and they keep markups on items at no more than 14% over cost (15% for Kirkland brand). So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.
- gruez 10mo ago>Membership fees account for the vast majority of net operating income for Costco This is financially illiterate because you're mixing revenue ("membership fees") with profit ("net operating income"). While it might be tempting to assume that membership fees is pure profit for them, it's not, because people only buy memberships because they're useful for something (ie. shopping at their stores). Therefore you can't strip that out from the other costs associated with operating a chain of warehouses.
- s1artibartfast 10mo agoIt seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust. I much prefer this to stores that are happy to burn customers, never expecting to see them again.