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Costco: "I'll Never Sell A Share"
"As we think about the business strategies that support this vision, the company’s executive membership (EM) program is a noteworthy example. Based on disclosures from the Q4 FY23 call (“executive members now represent ~73% of worldwide sales”), we can estimate the average EM spent ~$5,400 at Costco last year – roughly 3x higher than the average non-EM (~$1,700). After accounting for the 2% reward EM’s receive on eligible purchases, the all-in gross margin that Costco generates from the average EM is approximately 10.8% - 300 basis points lower than the rate for non-EM’s. (For EM customers who spend more than the average, the effective gross margin “paid” to Costco is even lower; rewards are capped at $1,000 a year, or $50,000 of annual spend.)"
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thescienceofhitting.com
"I'll Never Sell A Share"
From the 2001 Berkshire Hathaway shareholder meeting: Charlie Munger: “Earlier this morning, I was autographing books when a very good-looking woman came up to me and said she wanted to thank me. I said, ‘For what?’ And she said, ‘You told me to buy this pantyhose I’m wearing from Costco.’ I’d evidently made some previous comment about how amazing it was that Costco could get Hanes to allow a co-branded pantyhose in Costco stores. That wouldn’t have happened 20 years ago.”
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