New Costco golf balll

[big mac]

costco's profit margins are maximum 15%.

Yikes---If you believe that Costco only works on a 15% profit margin-----then it is time to wake up and smell the roses. There is no way they could ever stay in business at that rate. IMHO

[jeffc]

Yikes---If you believe that Costco only works on a 15% profit margin-----then it is time to wake up and smell the roses. There is no way they could ever stay in business at that rate. IMHO

I love roses.

They make their $ selling memberships. My neighbour is a buyer for them and it's a well known (or I guess not so well known in this case) fact.

http://www.forbes.com/sites/greatspe.../#2cbb56353d42



Great Speculations
Buys, holds, and hopes

Opinions expressed by Forbes Contributors are their own.
Trefis TeamTrefis Team, Contributor
The largest warehouse club in the U.S., Costco, has seen its gross margins fluctuate around the 10.6% mark over the last four-five years. From 10.87% in 2010, the company’s gross margins fell to 10.59% in 2011 and 10.57% in 2012. In 2013, the margins recovered to 10.64% and they further increased to 10.77% in 2014. While the historical change in margins has been a little wayward, we expect margins to decline slowly going forward through to the end of our forecast period. We forecast a negative 0.02% change in Costco’s gross margins every year, which will take down the figure to 10.63% over the next five-six years.

While most supermarkets and department stores markup their goods by more than 25%, Costco keeps its markups low at 15%, that allows it to offer products at lower prices than its competitors.

[golfisforfun]

I have seen goods sold to them in their stores at more than 2 times the price they paid...

I love roses.

They make their $ selling memberships. My neighbour is a buyer for them and it's a well known (or I guess not so well known in this case) fact.

http://www.forbes.com/sites/greatspe.../#2cbb56353d42



Great Speculations
Buys, holds, and hopes

Opinions expressed by Forbes Contributors are their own.
Trefis TeamTrefis Team, Contributor
The largest warehouse club in the U.S., Costco, has seen its gross margins fluctuate around the 10.6% mark over the last four-five years. From 10.87% in 2010, the company’s gross margins fell to 10.59% in 2011 and 10.57% in 2012. In 2013, the margins recovered to 10.64% and they further increased to 10.77% in 2014. While the historical change in margins has been a little wayward, we expect margins to decline slowly going forward through to the end of our forecast period. We forecast a negative 0.02% change in Costco’s gross margins every year, which will take down the figure to 10.63% over the next five-six years.

While most supermarkets and department stores markup their goods by more than 25%, Costco keeps its markups low at 15%, that allows it to offer products at lower prices than its competitors.

[jeffc]

I have seen goods sold to them in their stores at more than 2 times the price they paid...

that's not their MO. They look to lower prices whenever they can. Not saying it's never happened but that would be a very rare occasion. My neighbour says they are not allowed to sell for anything over 15% margin. It's a different business model than the rest of retail. They make $2.5B on memberships alone which is mostly profit.

[john8888]

http://www.wsj.com/articles/the-most...tco-1484832756

“We don’t have a certain amount that we promise to deliver to Costco,” said Shim Kwang-Suk, executive director at Nassau’s ball plant in Korea. “We produce other products first and deliver to Costco if we have products left.”