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No, because costco has a 3% margin. A cart of stuff at costco costing 247 will yield 240 to various operating costs, and roughly $7 actually to costco. If you
by amazingamazing 3mo ago
No, because costco has a 3% margin. A cart of stuff at costco costing 247 will yield 240 to various operating costs, and roughly $7 actually to costco.
If you have a lemonade stand you might sell a cup for $1, but overall after paying yourself and for the cups, lemons, etc you might only get 3 cents each cup.
For costco revenue equals sales and membership.
- ironSkillet 3mo agoI understand that. The AI software is meant to be a productivity enhancer for the employees using it. Other than the licenses, some training etc, there are no operating costs associated with it. Just by using the software, I don't suddenly have to pay more for salaries, retirement plans, etc, which are things that in aggregate produce the 3% margin. Maybe I have to pay more in logistics because I'm moving more product now, but I think the point stands.
- amazingamazing 3mo agoThe point is if you are paying for software but not increasing your revenue by your margin you are lowering it even if you are increasing profit in absolute terms. What you are mentioning with salaries is not relevant.
- ironSkillet 3mo agoI think we can agree to disagree here. I don't see how a company needs to have an $8000 increase in revenue to justify a $240 software purchase. You are assuming that the current operating cost for every dollar of revenue is also applied to every incremental dollar in revenue gained from software efficiency, and that is just not true.
- amazingamazing 3mo agoThere is nothing to disagree on, i am talking about net operating profit margins. It is math. What you are saying is again irrelevant. It is not about justification. Is about net margins…