Last week, I wrote a post about former Costco CEO Jim Sinegal and how he embraces competition (you read it here).
But wait, there’s more! (yes, I love that awesome infomercial line).
You can learn a lot from a multi-billion dollar brick-and-mortar empire like Costco. Seriously.
Here’s something very interesting about Costco…
Costco is a massive “warehouse” and you aren’t familiar with their business model, here it is in a nutshell:
-Their products are never marked up more than 15%
-You must be a paid member to shop there (currently $55/year for regular membership and $110/year for executive membership)
But here’s something you might not realize.
Only around 1% of all their profits come from products sold. Most of their profits come from MEMBERSHIP FEES.
That’s right, membership fees account for virtually all their profits.
So the next time you spend $100 on 10 gallons of laundry detergent, realize only about $1 of that $100 is profit.
HOW CAN THIS HELP YOU?
Think about how you can apply the “costco” model to your business.
Perhaps you can create a membership and then offer discounted products?
When I go to any store (or visit any web site), this is EXACTLY how I think.
I look at the layout. The graphics. The pricing models. The checkout. The copy/advertisements. Everything.
And with each part of the business I see, I ask myself this simple question…
“How Can I Apply This To MY Business?”
Yes, it is that simple.
I’ve been thinking like this for as long as I can remember. Now, it’s automatic – and it’s the main reason I believe for my ability to create innovative business and products.
As a kid, when I was out with my dad – we always played that game (actually, we still do it when we’re together!). Every open storefront we see, we brainstorm what kind of business would thrive there. What could they open in that spot that will service the community?
When we’re at lunch, we look at the menu. At the ordering process. At the lines in the restaurant and we discuss how we could make it even better.
Now, I play that “game” with my kids. My 9-year-old Jordyn now knows everytime we see a “store for rent” sign, we start rattling off ideas of what would go well in that space (ok, she still says a “candy shop” or an “arcade” about 80% of the time, but we’re building her business muscles).
Seriously, it’s really, really powerful.
Don’t just do this for retail stores you visit, do this for EVERY web site you go to as well.
It’s NOT about getting on 100 “guru” lists and copying their headlines. That’s amateur hour and your stuff will look exactly like everyone else’s. That’s not where breakthroughs happen.
Breakthroughs happen when you look OUTSIDE your industry and ask “how can I apply that to MY business?”
Open your eyes. The world is your playground – go ahead… it’s ok to play.
YOUR COMMENTS/FEEDBACK ARE WELCOME BELOW!
P.S. This program was one of my biggest “breakthroughs”. I think you’ll agree.
P.P.S. If you like this post, please “like”, g+ and tweet the heck out of it!