Difference Between Costco And Bj's Wholesale

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The two retailers that I have selected are Costco and BJ’s wholesale. Costco was founded by Jim Sinegal in Seattle and Costco became a public company in Dec. 1985. Costco has over 690 warehouses worldwide with revenue of $112 billion in 2014 having over 100k fulltime employees. Costco’s business model is to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private label products. The business strategy is based on the rapid inventory turnover combined with the operating efficiencies achieved by volume purchasing, efficient distribution, and reduced handling of merchandise in no-frills, self-service warehouse facilities, which has helped Costco to…show more content…
A key element of Costco’s pricing strategy is to cap its markup on brand-name merchandise with at least 15 percent which is much lower compared to other discounters and retailers. Costco’s sales technique is driven by the customer loyalty technique operating in a niche market by wowing the customers with high quality, low prices and option of return or exchange. Even though Costco’s low markups and pricing was criticized by investors, however, Costco’s philosophy was not to follow the other discounters or retailers with short term profit making rather than trying to build an organization with long term success and customer relationship. Costco’s merchandise strategy is to provide members with a selection of limited items such as 4000 compared to 40000 items in a typical super center which helps to maintain lower inventory cost and faster inventory turnover. Costco’s selections of appliances, equipment, and tools also include commercial and professional models including installation and support in order to serve the huge customer base such as small business

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