How Costco Became the Anti-Wal-Mart, NY Times
At Costco, one of Mr. Sinegal's[CEO of Costco] cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more."They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.
But Mr. Sinegal warned that if Costco increased markups to 16 or 18 percent, the company might slip down a dangerous slope and lose discipline in minimizing costs and prices.
Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."
More like this
Last week, striking Walmart workers and supporters of OUR Walmart
My uncle describes Costco as the place "where you go broke saving money". That certainly describes my experience of the warehouse store - I walk in for some toilet paper and leave with a new television, a tub of cashews and a lifetime supply of chapstick.
By Elizabeth Grossman
Amazing! A CEO who actually adopts an eastern philosophy to business.
There are a few of them out there. Once company in Delaware has a rule that once a plant gets to 150 people, a new plant HAS to open since it become increasingly ineffective to manage more than 150 people.
I'm thinking I might actually want to go get my MBA now.
TSI, I wish to request your help with something. A British general has written about the "good" British administration of India.
http://www.nytimes.com/2007/07/05/opinion/05rose.html?ex=1184385600&en=…
"Pitt also passed the India Bill in 1784 thus ensuring that the sort of poor administration that had soured relations with the American colonies would not be repeated in Britains other territories. (It also created the position of governor general in India, in which Cornwallis more than redeemed himself from his Yorktown disgrace.)"
I know about the Bengal famines and the Great Hedge, but I would like to have Indians' points of view on Cornwallis in India. If you have some sources, maybe you could put them here. Thank you.