If you own a small business there’s a good chance you are already shopping at a Costco store near you. Based on sales volume Costco is considered the largest wholesale membership chain in the world. So you might just have a store around the corner from you. Needless to say this wasn’t always so. Now to state that Costco was ever really a small company wouldn’t exactly be true. But how did the Costco Wholesale we know today come about?
Well the history of Costco can actually be traced back to one man. He’s known as the pioneer from the warehouse store? retail concept. His name is Sol Price and that he started the original warehouse store referred to as FedMart back in 1954. Eventually he would wind up selling this chain which is the way we come to PriceClub. Sol’s next effort started in 1976. This is the year he started PriceClub together with his son Robert Price. Together they could build PriceClub in to the largest warehouse store operation in the nation.
They started the company on the outskirts of San Diego County, California. Initially that they had just one store which was 100,000 square feet. Sol had was able to raise just a little over 2 million dollars to start out the organization. During that initial year they managed about 16 million dollars in sales but they lost $750,000. It almost ruined them. Then one day Sol asked a consumer whatever they were doing wrong? That’s as he found out that they necessary to open membership approximately government employees. From there the business took off.
They catered primarily to small enterprises and government employees. Knowing that they were more unlikely to bounce a check. They refused for several years to accept charge cards so that they could keep costs down. Bank card fees for retailers can really accumulate. They also kept their selection to a minimum but made it cheap to get in bulk. They could typically only charge about 10 percent above wholesale cost. They made their profits through sheer volume. And they also kept their overhead low.
What exactly does all this information regarding PriceClub pertain to Costco? Well Costco was began in 1983 by a former PriceClub employee named James D. Sinegal who had previously been a PriceClub executive vice president and who had dealt with Sol Price at FedMart. James in reality was in addition to Sam’s Club run by Wal-Mart PriceClub’s main supply of competition. But by 1992 Sam’s Club was overtaking them both. So it was decided that PriceClub and Costco would merge into one company. Robert Price became chairman in the board and James Sinegal became CEO.
The newest company was named PriceCostco Inc. This is an arrangement that was not going to work. In a year the writing was on the wall therefore the company used to be again split up. Only this time around the company which would soon after be renamed Costco Wholesale Inc. managed to retain the majority of the store locations. Robert Price took other assets with him and formed Price Enterprises Inc.
Ultimately James D. Sinegal who had helped to found Costco Wholesale Hours Of Operation would find yourself back in charge and also to this day he still is. Together with Jeffrey Brotman another founder and chairman from the board. The company does over 60 billion annually mtlfia sales and it has over 130,000 employees. It’s only real rival is Sam’s Club but Costco is the leader in their industry.
We mentioned Sol Price because without him Costco probably would not exist. He had a concept that turned into revolutionary. He essentially created a whole new way of selling for the public. He took a massive risk by doing this and almost lost all of it. But he succeeded against the odds and as opposed to leaving a company as his legacy he left an entire industry. He is a man that had the drive to achieve success and did. Do you possess that kind of drive within you?