Costco Wholesales

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Costco Costco Wholesales is one of the most famous wholesales in the US. There are many companies considered as Costco’s competitors such as Sam’s Club and BJ’s Wholesales Club. Those companies including Costco are playing an important role in American retailing industry by having many different stores around the US. They are running the stores by using similar business models. For example, they normally purchase a big number of merchandises from original manufacturers so they will be able to purchase it in very low prices. Then, people who would like to buy their products have to sign up to be store membership. The companies such as Sam’s Club, BJ’s Wholesales Club, and even Costco will allow just memberships to buy the products in low prices.…show more content…
As known that Costco is focusing on high quality of merchandises at relatively low prices, they have one condition in order to purchase merchandises at low prices, which is number of purchases. For example, to have one product that is cheaper than competitors they have to purchase more from original manufacturers. Therefore, Costco realized that they have to keep the sales volume to be high so they are still able to maintain this advantage. Because of this, they try to keep their slogan in customer minds that Costco has lower prices and they try to same membership money. However, there is a problem that Costco has to deal with is that their profits mostly from its membership fees instead its net income. They are sometimes keeping the prices too low to compete with their competitor but this strategy has a disadvantage. They couldn’t make a lot of profit from the merchandises. Therefore, a recommendation needs to be given. They should utilize their space in each store efficiently. As we know that Costco is struggling with making profits, so they could improve their profitability by allowing business to rent their space in the stores. For example, they could allow banks to rent their space. People who are going shopping at Costco might need to do some financial transactions and they might need to get cash from the banks or ATM. Moreover, it will be a good opportunity for fast food business such as Burger King, McDonald, and Subway. Due to the fact that people have to eat all of the time, Costco could allow those fast food companies to rent their space. As a result, renting fees could become another way for Costco to make

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