"Actually, I've been thinking about this question for a long time since I learned about Costco's business model last month." Sam Walton paused and said:

"From the point of view of business logic, this is indeed a good business model, to members to raise supermarkets, almost cut off the possibility of these members to go to other supermarkets, this trick is really powerful, if we Wal-Mart in the vicinity of this kind of supermarket, absolutely competition, think about it is still terrible.

It's just that now Wal-Mart supermarkets are running very smoothly, all stores are profitable, and they are in rapid expansion, and all the company's funds and even credit are used in new stores, how do you plan to enter the warehouse supermarket market? How much money to invest?

If the investment is less and the development is too slow, it is better to open a Wal-Mart supermarket with peace of mind, with more investment and a lot of capital consumption, who can guarantee that the warehouse supermarket can surpass the performance of the current Wal-Mart supermarket? Although our family owns the supermarket, we are also responsible to the other shareholders.

Besides, the talent team within the company understands the operation mode of normal supermarkets, and how many of them understand warehouse supermarkets? Theoretically, warehouse supermarkets can make stable profits with enough members, but the premise is that you have to let hundreds of thousands or even millions of people pay dozens of dollars in membership fees first, which is so easy. ”

"I also know that there is a certain risk, I just think that Costco's current business model will be terrible if it succeeds, and once there will be a conflict with Walmart in the future, our cost advantage will not be comparable to the other party." John said worriedly.

Sam Walton shook his head and said: "Don't worry too much, I have analyzed this business model, this kind of warehouse supermarket, basically can only survive in Los Angeles, New York City, a little smaller medium-sized cities, and may not be able to have enough members to meet the basic needs of a warehouse supermarket, and our Wal-Mart, the current main market is still in the expansion of small and medium-sized cities, large cities belong to the sphere of influence of Kmart and Sears, these two will also be our future opponents, At least not for now, if not for a decade, to worry about this.

Let's talk about the future later, we may not be able to open stores in every corner of the country, Costco may not be able to, the most important thing now is to make our existing business model successful, we don't have enough resources to operate in two different directions at the same time, if we do this, it is very likely that both sides will fail. ”

"Maybe, it's really me who is too careful." John Walton nodded and said that Wal-Mart is now developing very well, and the annual growth rate is basically the first in the country, at this time, the most important thing is to maintain the existing business model, use this advantage to increase the cost of controlling the procurement chain, and a large number of talents in this area within the company to complete the expansion.

"Actually, I didn't pay much attention, this new warehouse supermarket is indeed very good, but whether it can succeed is not certain, we need to observe for a few more years." Walton thought for a moment and then said: "Look at Costco's market performance, whether this business model can maintain a stable financial situation, small-scale and large-scale business is still different, if it really performs very well, we will enter the market again, with Walmart's current development rate, there will be enough resources to open up a second way." ”

"That's all there is to it." John nodded.

"This Eric acquisition of our shares allowed me to discover Costco's business model in advance, otherwise it would have been too late to find out a few years later." Walton said with a smile.

"Indeed, there are so many such small supermarkets in the United States, and we can't know if they are less than a certain scale." John Walton said.

There are too many retail counterparts in the United States, and most of them know that Celtic and Sears are large supermarket chains with branches all over the country, and these supermarkets often advertise on the radio covering the whole country because of their business all over the country, and they are well-known, while other small and even medium-sized supermarkets only cover one state or a few nearby states, and their popularity is also within the scope of business coverage, and it is difficult for other outsiders to know.

For example, Wal-Mart, now there are only 125 stores in the United States, most of which are still in their hometown of Arkansas, and they are slowly distributed to the surrounding states based here, which is the inevitable result of cost control.

And outside of these states, few people know about Wal-Mart, unless it is a stock speculator, because Wal-Mart's financial data is very good during this time, which has caused the stock price to rise a lot and become a hot stock.

Therefore, no one knows about Costco in California, which is centered in California, and even within California, it is not necessarily known if Costco is not a member.

Sam Walton said: "Today's matter has finally been successfully resolved, much easier than I imagined, and I don't have to think too much about the rest, tomorrow I will contact this Hong Kong company to see what kind of goods they can provide, and purchase some appropriately, if the price and quality are good, you can also cooperate, and some goods in Asia are still more cost-effective than in the United States." ”

"Okay, I'll arrange this, and I have to give this new shareholder a little face." John Walton said with a smile.

That night, Chen Zhiwen personally called Xu Weishan, who was in charge of Galaxy Trading in Hong Kong, and asked him to immediately take his core team and some samples from Galaxy Trading to the United States to talk to Wal-Mart's purchasing department.

The boss has already set the intention of cooperation, and the details of the products below are naturally responsible for the subordinates.

The next morning, Chen Zhiwen left Bentonville and came to California, where Costco is now headquartered.

Half a year ago, Costco's first large warehouse supermarket opened in Los Angeles, and after two months of development, it has gained 25,000 members and weekly turnover has exceeded $250,000, and both the number of members and turnover are slowly rising.

After many phone calls, the Pierce team accepted the plan to open four more stores at the same time, in Berkeley, San Francisco, Torrance and Santa Clara, all of which are among the top 10 cities in California.

It took about a month, Peirce's team selected the place, and then purchased the land and directly built the supermarket, and because the supermarket requirements were simple and there were no decoration requirements, the supermarket was built in three months under the premise that Party A gave the money and was happy.

By the time Chen Zhiwen arrived, all of these supermarkets had already begun to open, so it was naturally impossible for him to go around all four of them, and only went to Costco in San Francisco.

That night, business at the supermarket was not bad, as the first month was member-free, and anyone could enter and spend while enjoying a membership discount.

"Is the speed at which members get it as fast as it was in Los Angeles last year?" While shopping at the supermarket with Pierce, Chen Zhiwen asked.

(End of chapter)