Chapter 1902

Costco is a member warehouse supermarket. Only members or consumers brought by members can enter into consumption.

Costco's low gross profit rate is derived from its innovation of retail business model, which keeps the goods sold at a fair price. As long as the gross profit can roughly offset the daily operating expenses, the company's profits almost all come from membership fees.

Costco's members are divided into non-executive members and executive members. The annual fee for non-executive members in the United States and Canada is $55, and the annual fee for executive members is $110. Compared with non-executive members, executive members can enjoy 2% of the sales amount within one year, up to $750 cash back, and other benefits.

Costco's membership card can enjoy the most attractive services, not only a variety of ways, such as travel, medical treatment, tire change, hotel booking, and even buy insurance financing can enjoy a large number of VIP services, in fact, it has already broken through the scope of retail services. The most attractive thing for members is that there is a gas station dedicated to member services at the entrance of Costco stores. The discount is very strong, which is much lower than the market oil price. Therefore, many members often come here specially to refuel, and of course, they shop by the way.

“。。。 Business philosophy is an important strategic direction of enterprise development, especially in the retail industry. The competition is becoming increasingly fierce. The future retail industry must be the ultimate supply chain and the ultimate customer experience. The market competition will be more intense. It will be so easy to serve customers as God. "

For his own boss's abrupt decision, alvette didn't directly raise an objection because he didn't have a good view of the future of the retail industry. Instead, he began to patiently introduce Costco, and because he wanted to invest in the stock of Costco, an enterprise that had conducted in-depth research on it, he had a very clear grasp of Costco's information.

"Costco's success boils down to three things. It makes the goods excellent, reduces the price to a very low level, and at the same time makes the service exceed people's expectations, which well explains the essence of retail.

In the traditional retail industry, profit is directly related to the sale of goods, so it is necessary to consider the purchase price, sale price, sales volume, etc.

For example, Wal Mart reduces the purchase cost through bulk purchase, builds a strong supply chain and logistics system to reduce operating costs, and the core is to increase profit space.

The service agency represented by chainman makes profit by taking commission from the price of the subject matter in proportion, and sells a house to obtain the agency fee of 2.7% of the house price. The profit is directly related to the price of the subject matter.

Costco, however, is more pure and charges a fixed membership fee in advance. The profit level is only related to the number of members, but not directly related to the sales of goods and gross profit level.

Its front threshold makes its members more focused, focusing only on the broadest middle class in the United States, and providing services more focused. More importantly, in addition to providing continuous and stable cash flow for business activities, the prepaid mechanism will also form a "buffet effect" in psychology, effectively improving the user's purchasing activity

"Middle class..."

After listening to the introduction of alvette, Andy has a deeper understanding of Costco. In fact, the reason why he wants to buy a supermarket chain is to better improve the internal series channels of assets, so that the products produced by his company can complete a self cycle, which requires a series of all external sales channels.

Whether it's around newspapers, magazines, books, games and movies, as well as mineral water, milk, champagne and red wine, and various products produced by the farm, with the horizontal expansion of his career, he must find ways to activate the entire industrial chain and not waste these resources.

Costco is undoubtedly the best acquisition target, and the most important is the middle class, which is the service class of Costco.

What do the middle class want?

The middle class, not the rich, is in the middle of the society. There is social pressure to rise to the top, and the time cost is high. But they are more in pursuit of experience, quality and Xing price ratio. In fact, the middle class pays more attention to the "good" and "province" strategies.

The middle class pays more attention to price performance than other classes. They are willing to pay a premium for high-quality design and experience, but the premise must be value for money. This is also why Costco has positioned itself as a storage member store rather than a luxury store.

"If I start buying Costco now, how much will I have to pay?"

Hearing the boss's problem, Al sighs in his heart. As an asset investment ratio, Costco may be more optimistic than Wal Mart, but the real thing is to say that the acquisition is not so optimistic about the traditional retail industry impacted by Amazon.

"At present, Costco's market value is about 20 billion yuan, and its closing price on Friday was $44. Since 2003, Costco's stock price has been rising steadily. The biggest setback is the U.S. financial crisis. After reaching $74.45 on May 15, 2008, Costco's stock price has been falling all the way, and reached the lowest point of $38.44 on March 9, 2009, with a cumulative maximum decline of 48%.

At that time, we purchased 3% of Costco's shares. ""Ha, it's up six dollars in four months. It's not very strong." Andy said with a smile, although the language is joking, it was not mocking at that time, although the United States has rebounded, at that time, the two months have been fluctuating downward, and it is a good stock to maintain the upward trend.

"In this way, how many more shares do I need to acquire to become the largest shareholder?"

"At least more than 23% can be the largest individual shareholder, but that doesn't make you the chairman of Costco, whose founder and Chairman Jeffrey brotmann and co-founder Jim sinagar share almost 40%.

These two founders are the spirit of Costco and the root cause of its success. They can get more than 50% equity support. " Alverterie said a little helplessly.

"Tut Tut, iron plate!" Andy can't help frowning and banging his mouth, muttering.

"No way, these two founders are deeply loved and supported by the company and its shareholders, which stems from Costco's corporate culture." "In fact, Costco's success is an event with a small probability, and it's difficult to predict," said alvette. And Costco can develop smoothly under the control of Wal Mart, relying on business model and talent management.

Costco is a typical example of becoming the leader in the industry through talent management. The annual sales volume of a store of the company in South Korea has reached 400 million US dollars. The success of Costco is the result of wise management, corporate ethics and hard work, which is extremely rare. "

Andy can't help but be more interested here. You know, the business model is easier to understand. After all, the world's martial arts are fast, but many people know the same thing. In business, such as low gross profit rate, high turnover, low profit and high turnover are the competition secrets of many industry leading companies. The lower the gross profit rate, the higher the management requirements.

Only a few companies will choose the high gross profit rate policy, with better quality, higher price, more cost, making money of high difficulty and brand premium.

Talent management can only be understood through long-term observation. Management with "smart management, corporate ethics and hard work" is not available, so it is very difficult to judge in advance.

Light management mode is worth Andy's investment, because it is the foundation of building a century old enterprise. As for power, Andy can grasp it in his hand. After all, he can let Howard Schultz, the founder of Starbucks, continue to control most of Starbucks' power and manage Starbucks, so he can allow another enterprise to exist.

Costco's largest shareholder, he is bound to win!

"How much liquidity do I have to use now, in the United States?"

"10.3 billion dollars."

"Tut Tut, is there so much left to spend? Take out 5 billion yuan to buy Costco's shares. Of course, if someone is willing to sell Costco's shares, the price is appropriate and how much is needed. After becoming the largest shareholder, the power can be delegated. But Costco must be an industry owned by Andy Smith! " Andy's eyes are sharp and his tone is firm.

"I see." Seeing that the boss's attitude is so resolute, alvetti also knows that persuasion is useless, but fortunately, it is not chaos. In the next period of time, the think tank is busy again.