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> That's like saying that resteraunts are just credit card swiping businesses. You are being sarcastic here, but ironically you are not far from the truth. The
by hermanradtke 2y ago
> That's like saying that resteraunts are just credit card swiping businesses.
You are being sarcastic here, but ironically you are not far from the truth. The core financial model of a businesses is not always obvious.
McDonald’s is a real-estate business. Costco is a subscription business.
- charcircuit 2y agoI'm not being sarcastic. I'm providing an example of the reductionist thinking going on. Companies can about multiple things. McDonalds still cares about getting people to eat at their resteraunt.
- tatersolid 2y ago> Costco is a subscription business. I don’t think that’s accurate. The membership fee is a trivially small percentage for most members, and can’t be a significant margin driver. Especially for those members who have a pack of kids and shop Costco regularly, spending hundreds of dollars per visit. I personally think the membership fee exists as a gating function to keep less-prolific customers out of overcrowded stores on weekends.
- hermanradtke 2y agoCostco prices are very low. They intentionally make very little margin on what people buy. Their margin comes from subscriptions.