Costco Wholesale

Membership warehouse club retailer

Overview

Costco Wholesale operates membership warehouses through wholly owned subsidiaries and reports three geographic segments: United States, Canada and Other International.[2] Forbes records it was founded by James D. Sinegal and Jeffrey H. Brotman in 1983 and is headquartered in Issaquah, Washington.[8] Its Forbes sales of US$286.3bn rose 8.4% on the prior-year figure, keeping it third, and profit was US$8.5bn.[2] The warehouse-club model sells a limited range of goods in bulk to fee-paying members, which gives Costco high sales per employee: about US$840,000 on Forbes figures, roughly two-and-a-half times Walmart’s ratio.[2] Its market value of US$465.4bn is the third-highest in the ranking, after Amazon and Walmart and ahead of Alibaba.[2]

Costco Wholesale strengths and limitations

Strengths

  • Third-largest sales
  • High sales per employee
  • Sales growth of 8.4%

Limitations

  • Profit margin about 3%
  • Limited product range
  • Concentrated in North America

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