70% of the membership fee income is profitable. Costco is a chain retail company with full membership. At the gate of the store, the staff check the membership card, so long as they are members, they can enter. Membership fee income accounts for 2.2% of Costco's total income, but it has invented 70% of its operating profit.
Costco I * * * has four kinds of members to choose from, with annual payment. Due to the low price, high quality and favorable exchange conditions of products supplied by Costco, the retention rate of members in the United States and Canada reached 90% in 20 18, and reached 88% in other regions.
In terms of product acquisition, Costco chooses the products shipped from the manufacturing factory to be directly transported to Costco's own distribution center, and chooses cross-warehouse distribution, that is, after the products arrive at the distribution center, they will not enter the warehouse, but be directly delivered to the stores on the platform, which greatly reduces the logistics cost.
In personnel handling, Costco pays employees an hourly wage of $22. What is this concept? It is nearly twice the average hourly wage of American retail industry of $ 1 1.24, which is the highest level of the whole profession. At the same time, it also provides supporting medical insurance, annual leave scheme and 40 1K (endowment insurance).
Warehousing and large-scale sales promote high inventory turnover rate: Costco stores are presented in the form of warehouses. Except for all remaining decorations and family holiday promotions, products are sold in large packages, such as 12 toothbrushes and 20-pound bags of sugar.
Because Costco sells large packages, the inventory turnover is extremely fast. Compared with other retailers, the inventory turnover days are the lowest. Because Costco has large sales volume and fast turnover, it has great bargaining power for product manufacturers, and can customize the types, packaging and products that Costco sells exclusively.