Business Case Studies #3: Costco's Secret Weapon (Classic)

Founder's Journal

Morning Brew

Careers, Business, Entrepreneurship

4.8 • 1.1K Ratings

🗓️ 30 March 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

It's a $200 billion behemoth and a place I loved frequenting for free food samples growing up. In this episode, I'm talking about Costco and what we can learn from it as business minds. Check out full episode transcripts at https://foundersjournal.morningbrew.com to learn more, and if you have any ideas for our show, email me at [email protected] or my DMs are open @businessbarista. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	What's up everyone? This is Alex Lieberman, co-founder and executive chairman of Morning Brew.
0:05.4	Welcome back to Founders Journal, my personal audio diary, where I give you the business builder,
0:10.8	the tools you need to think better in order to build better, whether that's building a business,
0:15.2	a team or a new product. This week on Founders Journal, we're doing things a little differently.
0:20.2	We are dropping a mini-series full of case studies that lay out a number of lessons you can learn
0:26.2	from successful businesses. That means instead of just one episode Monday, Wednesday and Friday,
0:31.5	this week we're giving you two. A new show that you won't want to miss plus a classic episode
0:36.2	you maybe haven't heard before. In today's classic episode, originally published on September 17th,
0:42.1	2021, I talk about a $200 billion behemoth and the place that I loved frequenting for free food
0:49.6	samples, grow up, especially love their meatballs. I'm talking about Costco. Let's hop into it.
0:58.5	So let's set the foundation. The concept of Costco started in 1976 under this guy,
1:05.1	Seoul Price, the original founder, who started the company under the name Price Club. And Price Club
1:12.0	was doing business out of a converted airplane hanger in San Diego. Price Club started as what
1:19.3	is known as a B2B retailer, basically selling three types of products. One, what businesses used
1:26.6	in their business, so think food for a restaurant or printing supplies for a corporate business.
1:36.0	Two, what businesses consume in their business, think toilet paper. And three, what business owners
1:44.0	used for their own personal consumption, think things like TVs. But let's fast forward from the
1:50.1	founding. In 1983, Jim Senegal, who had worked for Seoul Price in merchandise distribution and
1:58.1	marketing. And then this guy, Jeff Baratman, who was an attorney that came from a retail family,
2:04.8	they opened the doors to Costco. And Costco drew inspiration from Price Club. It was this concept of
2:12.8	something called the retail warehouse club, where customers were members. And because of the wholesale
2:19.9	quantities that the store would sell, customers could hunt for bargains or buy in bulk for their
	...

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