Costco's profits are less their subscription revenue. That tells me the space for bulk retailers in middle class areas with the type of consumers that can shell out a yearly subscription fee isn't a whole lot bigger than Costco already occupies. Costco shoppers have more money, so they can buy more economically at Costco quantities, and they have a higher expectation of service which requires a higher paid employee. Costco has effectively packaged that arrangement in a $50 fee and keeps prices competitive by selling mostly bulk quantities compared to grocery stores. Good luck trying to compete at scale while holding on to costly values that your competitors don't. Your choices are fail entirely or carve out a niche that you can keep almost exclusively.

In my mind, the mental ceiling keeping us from understanding 'Why more companies can't be like Costco' and 'What's the real value of an Uber ride sans venture capital subsidies' is a lack of understanding of the extensive properties of capital that automation is going to either push us through or bring down on us in a rain of deadly glass shards. I'm not going to wait around for the market to 'get real' and 'focus on companies with actual viable business models' though. 1) The bulk of your portfolio should already be occupied by companies that fit that mold, but 2) The practice of leveraging profitability today for gains in equity tomorrow is going to push through a few big winners consistently enough that it's not going away regardless of the overall consequences. Meanwhile we'll keep asking the same questions that ultimately amount to 'Why does capital beget capital?'

It matters to me; I always buy from Patagonia if I can.

I've also seen consumer research that shows that a lot of customers, especially younger ones, want to believe that they are buying from companies that have a social mission beyond just getting rich.

You can see this play out in brand fights here.

Apple is either creating great products for creativity (good social mission) or is creating a walled garden to suck money out of everyone (bad social mission).

Google is either solving the world's problems (good social mission), or is sucking up everyone's personal data to better target ads (bad social mission).

Android is "open," vs. iPhone is "secure."

Etc.

I didnt know either until I listened to this excellent interview. change the way i thought about the company:

https://www.npr.org/player/embed/504852483/505017995