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Thread: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by donsutherland1 View Post
    The survey might not be off if one is dealing with total compensation (wages + benefits). At last word, Costco had 160,292 employees worldwide. Its selling and general administrative expenses (primarily salaries and wages according to Note 1 of the financial statements) came to $9.518 billion. That would translate into a mean figure of $59,379 per employee.

    However, that figure is likely skewed, as certain key employees receive far more compensation than the average worker. SG&A expenses also are comprised of other items. But even with a 25% reduction in the SG&A figure to account for those other items, one still comes close to $45K per employee.

    Sources of data:
    Costco - Company Profile
    Form 10-K
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by MaggieD View Post
    Donald.

    I hate it when you set me straight.

    Don't stop.

    Edit:
    After seeing the figure, I was curious about it and went to the financial statements.

    I hope all is well with you.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    Ever been in a Trader Joe's? Small stores PACKED to the brim with employees. They tend to not have an overnight shift and stock during the days so that you always have someone nearby to ask for help rather than running down loads of aisles trying to find someone who may or may not know where something is. Also, you damn near never see an empty unattended cash register.

    Unlike my Albertson's grocery store here where you can't find a soul in the store except the two or three at a cash register and at 5:30pm when the lines back up down the store's aisles due to the after work rush. Then of course you go to the customer service counter for something and no one is ever there and they have to be paged.

    I work at Trader Joe's and I can definitely say that that is true. We are always packing stuff during the day and then packing even more stuff when the truck comes in at night. Yet, in places like Trader Joe's, we do have something of a night shift, the store closes at nine and we unload and work the stuff from the truck until midnight.
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by ocean515 View Post
    Yes, that is part of it. However, if you're a supplier to Costco, you have to be able to meet their purchase demands 100% of the time. If another supplier comes along with a better price, you're out. Sounds fair, however, what would a supplier do with all the inventory they had built up to meet that demand.

    As I wrote, I like Costco, but their buying floor in Issaquah is littered with the carcases of suppliers destroyed by their purchasing department.

    I've told many company owners I know that they are making a pact with the devil when they sign on with Costco. The volumes are tremendous, and the profits slim, but when they get dropped, they better not be holding the bag for plant and personnel expansions they made to meet the volume, because it could destroy them.

    Believe it or not, this is some behind the scenes truth about Costco.
    Sounds like suppliers are fighting to supply to Costco. And you think something is wrong with that?

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by ReformCollege View Post
    Sounds like suppliers are fighting to supply to Costco. And you think something is wrong with that?
    Not at all. Just thought it might be interesting to understand how Costco goes about doing business.

    While it's own employees certainly seem pleased to work there, the former employees of it's suppliers would likely have a different view.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by MaggieD View Post
    Average Assistant Cashier: $11.82/hour
    Average Stocker: $12.59/hour
    Average Cashier: $15.79/hour
    Average Demo Services: $11.82/hour
    Average Food Demo: $11.00/hour
    Average Warehouse Demo: $23.35/hour

    $45,000/year would indicate an average of $21.63 hourly. It's just not there.

    costco Salary | Glassdoor
    Costco also gives out twice a year bonuses where employees get anywhere from $3-6k each bonus. At least that is what happens at the 2 Costcos in the Reno, Nv area.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by ocean515 View Post
    Not at all. Just thought it might be interesting to understand how Costco goes about doing business.

    While it's own employees certainly seem pleased to work there, the former employees of it's suppliers would likely have a different view.
    Then why did you continue to do business with Costco? Obviously Costco offered a better deal with high volume and low margins then getting better margins and a lower volume from another competitor. Which is why the suppliers were fighting to supply the company.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    #1 you should support the economic freedom of people to pursue business in most any way they see fit (within reason). One person pays a lot, the other doesn't, you should IMO ethically support both in terms of law/policy. If you do not, you've got issues. Yes you can personally NOT agree with such pay rates be they high or low, but this must IMO be secondary to your support of economic freedom. Some like vanilla, some chocolate, some people like a confrontational work place, some do not, some people like working long hours to get ahead, some do not. Anyone of you, including me, proclaiming from high on the mountain that our way should be codified in national law and handed down to the worshipers as law, have yet to be enlightened.

    #2 Businesses should be observed to have variance both as routine good competitive practice to differentiate oneself in the marketplace, and as a sign of a healthy market. Some companies choose to build a business model around high salaries and benefits, and if it works for them, OK, great. Some choose absolute bare minimum pay/benefits, if it works for them, OK great. The idea that uniformity, centrally planned or dictated models, would be tragic ethically and economically.

    Rejoice that we have thriving competitive aspects of our market. If you love the high pay/benefit type jobs:
    a. join one
    b. create one
    c. invest
    etc.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Heebie Jeebie View Post
    Yes most gas stations do make more on the store portion, that is why you don't see to many with garages anymore, but most people don't pick which gas station they use based on the prices of the junk food in the store portion. They choose it on the price of the gas.
    But that is my point. Why would three gas stations at the same intersection all keep their price the same if the entire idea is to entice customers with a low price? None of the three are any lower than the other. They are clearly engaged in artificial price fixing.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by MaggieD View Post
    Average Assistant Cashier: $11.82/hour
    Average Stocker: $12.59/hour
    Average Cashier: $15.79/hour
    Average Demo Services: $11.82/hour
    Average Food Demo: $11.00/hour
    Average Warehouse Demo: $23.35/hour

    $45,000/year would indicate an average of $21.63 hourly. It's just not there.

    costco Salary | Glassdoor
    Maggie... do you really think its fair of you to work this out in actual numbers? If this kind of thing catches on here people will soon be asking for asking evidence to support ones posts.
    __________________________________________________ _
    There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.... John Rogers

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