Kubang
Celebrity Bewarse Username: Kubang
Post Number: 40775 Registered: 09-2011 Posted From: 161.141.1.1
Rating: N/A Votes: 0 | Posted on Friday, September 14, 2018 - 12:44 pm: | |
We believe Costco has amassed a wide economic moat stemming from a cost advantage and its strong brand. Costco boasts a minimalist warehouse structure and an efficient distribution system that allows it to sell merchandise at virtually zero economic profit. Many of the items sold are not touched by human hands, removing excess cost and time from its system. Additionally, Costco sells only about 3,700 stock-keeping units, while many grocery and other mass retailers sell upwards of 60,000. Its unique product offering (faster-turning bulk items) heightens efficiency and allows higher volume to leverage the firm's fixed store costs, which reinforces its ability to offer lower prices and in return drives more volume because competitors have little room to compete on price. We believe Costco’s competitive advantages are evident in its ability to generate approximately $1,200 in sales per square foot and inventory turns at 12 times, far superior to its competitors that generate sales per square foot of $600 or less and turn items 8 times or less a year. Ignorance is bliss
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