David Rosenthal: belief

Transcript context

…Yes. In fact, it's what Jeff Bezos meant when he said your margin is my opportunity, but Costco just runs the playbook so consistently. When you look at their overhead, the fact that Costco runs at 10%–11% overhead, and Amazon runs closer to 30% overhead, Costco has chosen a business model, where they actually can just have lower margins on stuff because they don't need to do things like ship goods to your home. They need way fewer people. They need way fewer investments in technology to do crazy robotic sorting at warehouses, picking and packing. The Costco business model is one where they've just gotten rid of all that. They said, we're not even going to play that game. Our goal is to lower our overheads so we can pass along the most savings to customers. Lower overhead and lower the prices that we're paying suppliers so we can pass that on to customers, too. This is amazing. This might be the first example, I think, that we've found in the history of the show. I think Costco has incredible counter positioning power today as a large incumbent in a way that they did not have when they got started. This is rare.…

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