Earlier quoted context omitted.
Costco mandates a maximum of 11% margin on goods in the store and aggressively monitor suppliers on that cost. One of the reasons I like costco actually 10% or so is a fine margin to pay.
That is actually quite nice. I’ve been toying with the idea of mandating this 10% maximum margin for products and services on every for-profit company. Trouble is, how do you prevent them making stacks of companies compounding the 10% profits. And is 10% sufficient to build up a buffer for when hard times hit? This thinking has been triggered by fuel producers and sellers making sky rocket profits because of the incr…
Absolutely and costco has other interesting business model mechanics that make that margin feasible. Membership fees of course but other things as well. Like the fact they are all warehouses they don't have intermediate warehousing or unpacking like say Target does.