The Business Model: Costco's Business Strategy

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Business Model: The business model Costco use is MEMBERSHIP-ONLY WAREHOUSE CLUB that allows their members to access wide range of merchandise at a low cost which result in to high sales volume and rapid inventory turnover. Costco allows non-members to purchase but they have to pay 5% fees if they buy from the COSTCO.COM or they have to use cash card or stack coupon for the purchase from the store. (The krazy Coupon Lady, 2014) Business Strategy: Costco’s main business strategy is to provide their customer a quality product at a low cost. To sell the product at a low price, it reduces their cost or tighten their cost mainly through the following ways. 1) Volume purchasing and distributing: · Costco buys majority of its

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