3 ms·
They pay their employees well and actually limit profit margins so that they're sustainable. I watched a documentary[1] a few months ago wherein it was outline
by Centigonal 13y ago
They pay their employees well and actually limit profit margins so that they're sustainable.
I watched a documentary[1] a few months ago wherein it was outlined that the company's former CEO witnessed the rise and fall of several other big-warehouse wholesalers. He noticed that what kept happening was that companies would start with lean margins, capture lots of customers, raise the margins, and collapse as soon as another wholesaler with leaner margins appeared. To avoid that fate, he apparently put a hard cap on Costco's profit margins.
That said, now that Costco's so big, they could theoretically raise their prices and still muscle out competitors. Let's hope that doesn't happen.
[1] https://www.youtube.com/watch?v=1f6gRxwHGII https://www.youtube.com/watch?v=1f6gRxwHGII