But your choice for individual products is limited in relation to other retail giants. Limited Product Selection: When you shop at Costco, you have a wide variety of products ranging from clothing, furniture, jewelry, toys, TVs, and lots more. The strategy has influenced other retail giants like Walmart and Target to raise their employee salary. The retail giant currently pays a minimum wage of $15 per hour, which has enabled them to hire a highly-skilled workforce. High Paying Retail Jobs: Costco has built a happy workforce and a loyal employee base by paying the highest salary and benefit amongst its competitors. CostcoРІР‚в„ўs strategy is to maintain a good perception of its products and services, which has ensured brand loyalty. Quality is achieved through direct bargain and purchase from manufacturers.

High-Quality Products: One of CostcoРІР‚в„ўs philosophy is to provide its members with the highest quality products at the most competitive prices. It enables the organization to be less reliant on making huge profit margins in sales, thereby allowing its customers to have better savings on purchase. Pass savings to customers: Costco maintains a competitive edge by keeping the operational cost as low as possible. In an interview, Jim Sinegal, Cofounder, and former CEO, says that РІР‚Сљ Advertising is Evil because it cost huge sums of money, which would lead to higher prices of the merchandise and thatРІР‚в„ўs bad for the company and our customers.РІР‚Сњ In comparison, Walmart spent $2.9 Billion, and Target spent $1.4 Billion on advertisement in 2018.

DoesnРІР‚в„ўt waste money on advertising: Costco has no budget for advertising.

In 2019, member renewal rate was 91% (US) and 88% (Canada). Costco has 5 million cardholders (2019) around the world, and their cardholderРІР‚в„ўs membership has been growing year over year. Loyal Customer Base: Costco has been able to build a large, devoted, and loyal customer base. And only the paid members can shop at Costco.

Membership Business Model: CostcoРІР‚в„ўs business model is different than most other retailers they charge an annual membership fee of $60 from its members. The organization wants to be known for a high-quality, low-priced For example, according to fortune, an average markup at Costco is 11%, vs. Costco adopts a strategy of stocking high-quality items, which are sold in bulk-size at low-profit margins in warehouses style stores. Low Prices: CostcoРІР‚в„ўs low price strategy is a major strength of the retail giant.

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