Hacker News Reader

Comment by akudha | Hacker News Reader

Are you sure about that? Companies like Costco are doing well, they seem to be better in treating their employees than say, Walmart.

View on HN

Consider that on ~40 billion revenue, Costco makes ~1 billion profit. Compare that to Apple making ~60 billion income and ~11 billion profit. Apple brings in only 1.5X more money than costco but makes 11X more profit. Sure Costco makes a lot of money, but Apple makes way more money by employing these sorts of practices. There’s rich, and then there’s apple rich.

Costco, to be fair, is a reseller. Totally different business model. They are, after all, selling Apple devices.

Haha when you put it like that, it helps Apple's case. They're only making less than 10x more than Costco for all the serious technical innovation vs large-scale reselling.

Apple doesn’t have to deal with perishables.

very different business models and markets.. apple could be gigantic without this kind of manufacturing model, though. it's probably the rat race of management looking for carreer progression based on metrics and/or bonus. disgusting

Costco has a different business model from Walmart. Their revenue per employee is over twice that of Walmart. They keep labor costs low by employing as few people as possible. As such, they need to hire the best workers and pay them competitive wages and benefits. When Walmart wants the best workers, they also treat their workers well like with truckers and researchers at Walmartlabs.

This is why the meme about Walmart is subsidized by the government is completely preposterous. With Walmart was forced to, they could restructure their company to support the Costco model and lay off a million people.

> With Walmart was forced to, they could restructure their company to support the Costco model and lay off a million people.

I'm not so sure it's that simple. Costco has higher revenue per employee because the price per item is much higher. The customers who can afford to shop like this are comparatively much wealthier than those who shop at Walmart. That being said, Walmart does exactly this with their Sams Club locations. It's certainly a profitable business model, but the market is smaller than the customer base that Walmart serves.

Granted, I haven't been to a Costco in several years, but I thought the primary appeal of Costco was their low prices. I doubt that people want to drive to a store in the middle nowhere where everything is sold in bulk, on pallets, unless if they were getting a good deal off of it.

Costco has low prices per unit of product. But they are sold in large quantities so price per SKU is high. This is why Costco has low labor costs. A cashier scanning one average item at Costco is something like $20 in revenue, but at Walmart it is something like $5 revenue -- for the same human labor. (I remember seeing real numbers for this at one point but I can't find them.)

While a middle income person might be able to buy a month's worth of groceries at one time, and fill their freezer and pantry, lower income people often do not have the cash flow to afford making grocery trips that large. Even if the unit price is slightly higher at Walmart, they have no other option, because they can't afford to buy $50 of beef at one time if their entire shopping budget $50.

Costco shareholders are 't doing as well as.. Walmart, which is the point.

Costco isn't the richest, Walmart either. Retail has thin margins.

Reply on news.ycombinator.com