U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Work and Employment
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-12-2015, 11:25 AM
 
Location: Southeast U.S
850 posts, read 705,876 times
Reputation: 975

Advertisements

According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
Reply With Quote Quick reply to this message

 
Old 07-12-2015, 11:28 AM
 
224 posts, read 658,674 times
Reputation: 129
Walmart has 2.2 millions employees, and can't afford to pay everyone $16.00 per hour. Costco is much smaller, than Walmart, and has a completely different customer base than Wal-Mart. Also,Costco has great marketing to make customers believe they are saving money.
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 11:32 AM
Status: "Idle" (set 10 days ago)
 
Location: SF Bay Area
13,511 posts, read 18,386,425 times
Reputation: 20097
Each company have their own cost basis and profit margin. Costo's equivalent would be Sam's Club (owned by Walmart).
See how Costco does it: http://www.bloomberg.com/bw/articles...y-in-the-world

Quote:
After accounting for expenses such as real estate costs and wages, Costco barely ekes out a profit on many of its products. Eighty percent of its gross profit comes from membership fees

Last edited by jaypee; 07-12-2015 at 11:53 AM..
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 11:36 AM
 
Location: Southeast U.S
850 posts, read 705,876 times
Reputation: 975
Quote:
Originally Posted by bjh2k19 View Post
Walmart has 2.2 millions employees, and can't afford to pay everyone $16.00 per hour. Costco is much smaller, than Walmart, and has a completely different customer base than Wal-Mart. Also,Costco has great marketing to make customers believe they are saving money.
Okay, that makes sense. Costco does attract more affluent customers that spend more money than the average Walmart shopper and they have fewer employees to pay. I know every time I walk into Costco I can't get out of there without spending at least a $100.
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 11:45 AM
 
Location: Western Washington
10,459 posts, read 9,437,481 times
Reputation: 17798
Revenue isn't everything.

Think about a small contracting company, such as an electrician or plumber. Gross revenue might be only $300,000, yet each plumber could earn 50-70k.

The key is in how many employees you have in comparison to your revenue.

Costco and Walmart, although they are both retail companies, are very different in product mix and merchandising. Walmart carries hundreds of thousands of skus (Stock Keeping Units) while Costco will have a small faction of that. Each item carried has costs associated with it. Additional fixtures for display, time involved to receive and stock, housekeeping, etc. Think about the grocery section at each store. Walmart gets boxes of stuff, each box has to to unpacked, individual items shelved, boxes discarded. Costco hauls a bunch of stuff over on a pallet jack, wheels it into place, rips the top off the boxes and calls it good.

The limited selection and minimalist merchandising at Costco means that each employee is very productive when you measure the value of merchandise handled in an hour, while Walmart will be less productive.
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 12:44 PM
 
10,077 posts, read 5,368,470 times
Reputation: 15418
Quote:
According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
I thought you answered yourself pretty well...
capital isn't everything, Walmart operates on smaller margins and makes their profit by volume...
Because they have so many stores, they have a lot of overhead as well. So each time Costco sales 1 item, Walmart has to sell 10 items for the same profit. The difference is that there are >10x the number of walmart than costco... so Walmart comes out with more profit.

You should really be impressed by Walmart in being able to pay as well as $9.50... not by Costco paying $16. Walmart has more than twice the number of employees as Costco as well. So Walmart "employs" more of the middle class than Costco. Imagine if Walmart closed half their stores so they could pay $18/hr... sure it sounds good, now think about the communities it just moved out of and think how many people just became unemployed if Walmart wasn't there. If it wasn't due to it's sheer size/volume that Walmart operates on, do you think a small mom/pop trucking company can afford to drive inventory out in those rural areas? What about the mom/pop stores that sale those items? Do you think they can afford to stock the amount of inventory as Walmart? So sure, you could have your white clothes, maybe black if you are lucky... you can pick between cereal or bread for meals... you can have your $18/hr and buy two of them, or save it and leave and thus the migration out of rural areas...

Fast food vs restaurants operate the same. McDonalds doesn't make a lot per $1 cheeseburger but it sales a lot more than the $10 cheeseburger at a sit down place.

edit: and before someone says it is better to just work at Costco vs Walmart, because walmart is so big, they have more movement up the ladder too so you might start out lower but after a few years. you get to make what the Costco person does, then a few more years and you make more... Sure, there's a bit of a "lag" in pay for the first 5-10 years but after that it isn't that much of a difference. Sure, not many people stay in those kind of business for a decade, but the ones that do come out doing okay too. But you could argue the same with people going to college... spend half a decade in college and another 5 or so "entry" job years for experience and at the end of 10 years, they have a career too. It's just two different career tracks over 10 years but the problem these days are that college folks work at Walmart alongside the people that didn't go to college... and get pissed because now they need to spend the 10 years at Walmart and already spent 4-5 years in college so they are really looking at 15 years for their career. So they jump ship hoping the next ship is better instead of just working while in school to get onto the right ship the first time around.

Last edited by MLSFan; 07-12-2015 at 01:00 PM..
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 12:58 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
32,335 posts, read 58,927,575 times
Reputation: 35357
Many of the above comments are good reasons. Especially employee production. Walmart need more cashiers because they are so slow, while Costco hires only the best, trains them well, and fires them if they are not up to the standards they require. Another is simply that Costco has no shrinkage/shoplifting problem. Requiring people to be a member, and checking receipts at the door makes a big difference. Walmart gets a lot of "customers that go in but don't buy anything, yet leave with things they didn't have when they came in.

Walmart Loses $3 Billion a Year to Theft
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 02:02 PM
 
Location: Proxima Centauri
5,746 posts, read 2,414,651 times
Reputation: 6037
Quote:
Originally Posted by Poor Chemist View Post
According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.

The answer to your question is easy. You are getting what you pay for at Costco.
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 02:36 PM
 
Location: Southeast U.S
850 posts, read 705,876 times
Reputation: 975
Quote:
Originally Posted by Tonyafd View Post
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.

The answer to your question is easy. You are getting what you pay for at Costco.
I am a member of both clubs myself and the SAMs by my house is extremely busy on the weekend. They have self check out lanes that kind of move the process along quicker. I find SAMs to have the best prices on dry groceries yet Costco has a better selection of meats. I agree Costco costumer service is better but that is because they are not as busy as the SAMs down the street and they can approach each customer easier. IMHO, SAMs have Better prices than Costco on similar merchandise. Maybe that is why Walmart can pay as well as Costco because they sell their goods cheaper.
Reply With Quote Quick reply to this message
 
Old 07-12-2015, 02:44 PM
 
Location: Tennessee
27,595 posts, read 20,591,792 times
Reputation: 33426
Quote:
Originally Posted by Tonyafd View Post
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.

The answer to your question is easy. You are getting what you pay for at Costco.
I've also had a membership at both and Costco is far and away the better choice IMO.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Work and Employment
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top