[quote]sufiandy wrote:
[quote]usmccds423 wrote:
[quote]Severiano wrote:
[quote]usmccds423 wrote:
[quote]Severiano wrote:
[quote]usmccds423 wrote:
@ Severiano:
Don’t most companies pay their employees a decent wage though? You used Costco as an example, which I think is a good one for your case. My thought though is that most companies have to reward talent in order to keep said talent, but in many cases a lot of their jobs don’t require talent. Walmart, for example, probably pays top dollar for experts in supply chain management because it’s a skill/expertise not everyone has due to education requirements and expereince.
However, the guy saying hello when you walk in. He could be replaced by a sign or any 15 year old looking for a job. So to me, it doesn’t make sense for Walmart to bother at all with the greeter because they don’t really add value. If they had to cut the job entirely it wouldn’t affect their customers or business. If they had to cut the supply chain management guy though, it would cause big problems for the business.
Also I thought Walmart was like the king of operating on the margin? [/quote]
When you plan out the way a business will operate, you divy out the responsibilities, assigning certain tasks to certain employee positions. The difference between Walmart and Costco is that Walmart designed many of their storefront positions to have no real mobility within the company, or any real pay leaving employees feeling hurry up and wait games.
Costco, employees have a lot of responsibility by design, as well as room to grow. It’s not an accident, it’s by design. That’s my definition of a parasitic company, when by design people who are employed have no mobility, or simply don’t make enough full time to make ends meet.
So, Costco pays it’s storefront folks a fair, living wage by design.
Walmart pays it’s storefront folks a poverty wage, by design.
From here I get into what is patriotic and what isn’t for the country. If Walmart were a Marine, he’d be a total shitbag leader who shits all over his lance corporals and listens to the butterbar rather than the Master Guns, Costco would be the leader who everybody works their ass off for because he is fair and shows integrity, follows his chain of command but filters the bullshit for those who follow him.
Two types of leadership, which one were you? The shit bag or the real mofo? [/quote]
I like the analogue, that’s a good 
I don’t want you to think I’m defending Walmart, I’m not. I’m more interested in understanding the why behind why the companies operate the way they do. Maybe it is just a matter of leadership.
Perhaps it is a superior design utilized by a CEO that is truly an honorable man. It just seems like somehting is missing. They sell similiar products at similiar prices. Costco is a bit more expensive if I’m not mistaken and I think there is a membership fee. So how can they afford to pay higher wages? It can’t just be that the CEO earns less, can it?
Or, like I alluded to, maybe Costco has found a way to fill their positions with better talent, talent they can foster and grow, which demands greater pay. [/quote]
Well, that’s the very thing I’ve been trying to point out. People talk about ceo’s as if it couldn’t be any other way, that the need for such leaders necessitates the cost. Yet, there are examples of companies/ corporations that have found a way to make room for EVERYBODY.
If you ask me, it just turns out that the folks at the very top tend to get very greedy. Be it restructuring, creating bankruptcies so that they don’t have to pay off people’s retirements, etc… Remember Mitt Romney and all the folks defending him here? Guy was a master at manipulating demand and government so he could line his pockets, just look up the whole Alcoa fiasco that everyone seems to forget about, nevermind the miners he blue falconed. [/quote]
I will look up the Alcoa situation.
I’m sure greed plays it’s part. I’ll certainly not argue against greed. I think people at all levels are greedy though. It seems to me that Costco’s CEO is an exception is all. Walmart is one extreme while Costco is the other. Many companies pay good wages for talent is my guess. Look at a company like say IBM. How many of their employees are making $7 an hour, I don’t know, but my guess is not many if any. I think most companies fall into this category.
Are Costco and Walmart really comparable anyway? Costco’s business is centered on bulk sales correct? That’s not really Walmarts strategy, which could play a larger role than we think. Also we are talking about very different companies:
Walmart 2012 in milions:
Net sales: $443,854
Consolidated net income: $16,387
Costco 2012 in millions:
Net Sales: $97,062
Net Income: $1,709
I realize these are only a few indicies, but look at the differnce in cost between the two. Walmart’s net sales are about 22% higher than Costco, but their NI is only about 10% higher. This I assume is due in large part to a significantly higher COGS. My guess is this is not due to poor management, but that it just cost Walmart more money to run their business. Raising wages across the board at Walmart would be rather expensive I think.
http://www.walmartstores.com/sites/annual-report/2012/WalMart_AR.pdf
Costco, came off their statements (a pdf on their site)[/quote]
Just based on shopping experience I can see how costco has better profits and in turn can pay employees more.
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Maximum traffic in minimum hours, they have shorter hours than most stores but are very efficient during that time. The hours are just about the time of 1 shift so they don’t really need overlapping shifts and as many employees. They don’t waste much time having the store open with few people shopping.
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Profit per purchase, I noticed that many things at costco are not always discounted that much, its just convenient buying in bulk. Some of their stuff is better quality than typical bulk stores but not really cheaper (or at least enough to make a huge difference).
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Average purchase, the average checkout total is probably over $100 so just in the time that occurs they make a decent profit for employee time. Compare this to walmart were a lot of people may make small purchases on discount items (lot of sale items), just the employee time they take to make that transaction they are making little profit. [/quote]
Exactly, which is why comparing the two is difficult at best. They don’t even service the same customers really. There is some overlap though.