Costco (Costco Wholesale Corporation
) is the largest U.S. retail chain storage available on a State privilege. It is also the third largest retail network in the U.S. (2009) and ninth in the world.
Costco sells large quantities of goods, often in packs. Typically, wholesale depots are aimed at leading retail client (i.e. shops) and appoint a second place after the producer price level of goods, earning margins. Costco is not a typical warehouse, but rather a shop, so customers are treated similarly, but only if it meets certain conditions:
- The document that does business (company registration act),
- The annual "membership fee" which costs at least $ 50 dollars.
- The goods are purchased with cash, credit cards (there are exceptions), or by taking a credit.
In this model the customer by being subjected to the above rules is privileged to purchase goods at prices slightly lower but in larger quantities. Soap is sold in a pack of 6 pieces. Cigarettes are sold at least a carton. But, for example, a sweater, a bicycle or a television must be bought separately. Does this system arise from savings? The are two answers:
- Yes, because Costco locations have discounts just because a customer buys six toothbrushes in one fell swoop. For families it is a visible plus.
- Not taking into account that accumulating in the home goods is in unnecessary quantities (and paying for the membership) the client freezes his own money, which he could spend more wisely. Not every home needs a keg of mayonnaise or carton of 2250 swabs into ears. So, Costco locations are the stores for those who know exactly why they buy goods in larger quantities.
The proposed business model is relatively young. It was invented i30 years ago by an American Jew, a lawyer turned into a salesman - Sol Price. He started his business in California in 1954 from the foundation of hypermarkets FedMart (after selling to German investors in 1975, the network went bankrupt in 1983). But the pioneer of "wholesale retail" established in a former hangar the first store, called Price Club in 1976, in San Diego.
In both networks, Price's work was controlled be the managerial position of a different trade-loving lawyer - Jeffrey Brotman. Along with James Sinegalem he founded the first Costco store network, using the same model as the Price Club, which was proposing a one-year membership and measuring the small businessmen. The store opened in Seattle in 1983.
In 1994 the authorities at the top comes to the strange personnel castling. 82-year-old Sol Price left the company and his son Robert started his new company - Price Enterprises. Meanwhile, in 1997 PriceCostco changed its name once again, this time to Costco Wholesale.
Costco is a commercial giant, with 572 Costco locations in the world (2010), most of them in the United States. Goods are sold for 71 billion dollars per year; with over one billion profit. This is a difficult task when the profit margin at Costco is 14-15% for most products (while other stores charge a premium of 25-50%), and the company doesn't advertise much, getting the cost savings of about 2% per year. The company also has requirements for contractors.
In the ranking of the 500 largest U.S. companies by revenue, Costo has long been housed in the first top 30, overtaking Sears and AT&T, and retail trade is the third from the top company in the U.S., the ninth in the world. Membership card at Costco has 55 million registered customers.
The network is known as the first in America that was able in less than six years to increase sales from zero to ... 3 billion dollars! It is the first largest U.S. retailer of wine and glasses.
In the shops you will find products from around the worldincluding ham, textiles, hand-decorated boxes of memorabilia.
A typical Costco store has 4000 different products, and among them there are only four kinds of toothpaste. For comparison, Wal-Mart offers over 100 thousands of products, including toothpaste of 60 sizes and brands. Beating the range of goods from developing to infinity in this case is salutary.
To avoid charges for brokerage, Costco does not accept credit cards. The exceptions are American Express (but not in Britain) and debit cards. You can also pay in cash, and (increasingly rare phenomenon) by check. The network of sellers does not receive merchant commission, have no shopping bags.
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