<html> <head> <title>Member-Rewards</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <style type="text/css"> #xcvve3 { font-family: Georgia, "Times New Roman", Times, serif; font-size: 15px; } #gwe36y6 { font-family: Georgia, "Times New Roman", Times, serif; font-size: 15px; } #xdrih45 { font-family: Georgia, "Times New Roman", Times, serif; font-size: 7.8px; } </style> </head> <body bgcolor="#FFFFFF" leftmargin="0" topmargin="0" marginwidth="0" marginheight="0"> <table id="Table_01" width="575" height="580" border="0" cellpadding="0" cellspacing="0"> <tr> <td> <a href="http://rewardinfo.yourmemberrewardsinfo.com"><img src="http://see1.yourmemberrewardsinfo.com" width="483" height="95" alt=""></a></td> <td> </td> </tr> <tr> <td colspan="2" id="xcvve3">Hello rivet@projects.hepforge.org, Did you know that you have $50-in Costco-Points waiting for you? These bonus-points are going to be-expiring at the end of the day on Friday, March 10th if you have not-redeemed it by then. Getting your-bonus is simple; just follow the link-provided below here and answer the brief-questionnairre that follows about your Costco-shopping experience to get this reward-right away. <a href="http://rewardinfo.yourmemberrewardsinfo.com">Go Here Now to Get Your Costco-Points</a></td> </tr> <tr> <td colspan="2" id="gwe36y6"> -If you would_like to not.get.future memberads-you can.end.them <a href="http://ckey6.yourmemberrewardsinfo.com">here</a>. *_2885 SANF0RD_AVENUE_S.W. No.40442. GRANDVlLLE. Michigan. ZIP: #494l8. </td> </tr> <tr> <td colspan="2" id="xdrih45"> A good friend of mine was raving about Costco recently, going on about how she couldn’t resist shopping there at least two to three times a week. She said sometimes she doesn’t even plan on buying anything. She just loves wandering around in the enormous, double-football-field-sized warehouse, hunting for what’s new (Costco turns over its entire inventory 12 times per year). She is also obsessed by what the big designer or luxury “surprise” of the week might be — stuff like Waterford Crystal, Coach handbags or Omega watches, to name a few, all selling out quickly for shock-and-awe low prices. And even though she may have shopped with no intention of purchasing, she says she always finds something that seduces her to buy. As she is telling me about her compulsive obsession, or obsessive compulsion, for this almost out-of-body experience she has every time she goes to Costco, I think I observe a slight tremor — almost as though she’s going through some sort of withdrawal. The next thing out of her mouth is, “I must plan a dinner party for this weekend so I can get over there tomorrow and get some steaks and another case of red wine.” Just to give you some context, world-renowned chef Julia Child bought her meat from Costco, and the retailer is the largest purveyor of fine wines in the U.S. Incredibly, to me, my friend did plan a dinner party just as an excuse to go to Costco. Now that redefines the neurological addiction I’ve been writing about for years. A “Costcoholic” Indeed! She is just one of the over 75 million “mainlining” Costco members (and growing at a high single digit percentage rate annually), with an average annual income of $100,000, paying a $55 annual membership fee (or $110 for an executive level membership). Three million members a day enter Costco’s stores to get their fix. Yes, you read those numbers right. In today’s over-stored and over-stuffed retail environment, the equivalent of almost one-fifth of the U.S. population is paying for the privilege to shop at a particular store. And this is not a one-off, let’s-see-what-it’s-like kind of visit. The renewal rate is a whopping 90 percent each year. I guess that captures the power of an addict’s behavior. Not only is 80 percent of Costco’s gross margin and 70 percent of its operating income derived from its Costcoholics’ membership fees, Costco collects most of its profits 12 months in advance, not at the eleventh hour of the fiscal year like most other retailers. These “druggies” bought enough stuff during Costco’s 2015 fiscal year (ended August 30), to pump revenues up to $113.7 billion (a 3 percent increase over 2014). Costco is the second largest retailer in the U.S. after Walmart, with 488 warehouses. Internationally there are 90 Costco warehouses in Canada, 36 in Mexico, 27 in the UK, 24 in Japan, 12 in Korea, 11 in Taiwan, 8 in Australia and 2 in Spain. And Costco plans to open 32 net new warehouses in fiscal year 2016. A Combination Drug At the core of Costco’s model is a philosophy that was embedded by its founder and CEO, Jim Sinegal, from its inception in 1983, then passed on to its current CEO, Craig Jelinek, when he took the helm in 2013. This philosophy was handed down to Sinegal by his longtime employer and mentor, Sol Price, who was the pioneer of the “warehouse store” retail model, launching Fed Mart in the 1950s and Price Club in 1976. Price never allowed employees to use the word "discount." The way Price’s mind worked was to focus on the lowest possible markup rather than the deepest discount. In Sol’s mind, the word discount equated with cheap. So the core ingredient in Costco’s addictive drug is its value proposition that stands for high-value products at the lowest prices. How does Costco manage to offer such down-and-dirty prices? For starters, it has enormous economies of scale. Costco buys more apple juice, diapers, pasta, towels—in fact, more of any product it decides to offer its members—than just about any other retailer, allowing it to negotiate the lowest prices from vendors. It sets the standard for the lowest pricing in the industry; not even Amazon can beat it. As a result, the Internet has disrupted Costco less than it has other retailers. And since 80 percent of its gross margin and 70 percent of its operating income come from its membership fees, Costco keeps margins razor thin, with markups at 15 percent or less, compared to 25 percent for supermarkets and 50 percent for department stores. Costco’s prices are on average 30 percent below large supermarket chains’. Because of the relatively low number of SKUs that Costco carries, the Costco model is simpler, cheaper and easier to execute, and it is inherently more productive than that of the average retailer. It requires less time to sort, restock, reorder and deliver product. Costco eschews carrying multiple brands of products that are similar, except of course when it has its Kirkland Signature private label brand to sell. Think about it: A major supermarket chain like Kroger KR +0.66%’s might offer 40 different peanut butter SKUs; Trader Joe’s has ten; and Costco? It has two. Costco’s 4,000 total SKUs is narrow, but it allows them to buy huge quantities and charge lower prices. </td> </tr> </table> </body> </html>