American Fortune Life

Good cities are mostly a membership-based warehousing supermarket, and only members or consumers who come with posts can enter the market.

Good City's low gross margin stems from its innovation in the retail business model, keeping the merchandise sold at par prices, so long as the gross margin roughly offsets day-to-day operating expenses, and the company's profits are almost exclusively from membership fees.

Good City members are divided into non-executive members and executive members, with annual fees of $55 for non-executive members in the United States and Canada and $110 for executive members. Enforcement members receive 2% of sales within a year, up to a maximum of $750 in cash back, and other benefits compared to non-executive members.

The most attractive services are the ones that good city membership cards can enjoy. Not only are there many types of services, such as travel, medical visits, tire changes, hotel reservations, even insurance finance, etc., they can enjoy a large number of VIP services. In fact, they have already breached the scope of retail services. The most appealing to members is that there are gas stations at the doorstep of good multi-store stores dedicated to the service of members. The discount is huge, which is much lower than the market price of oil, so many members often come here deliberately to refuel, and of course shopping is on the way.

“ The business philosophy is a major strategic direction for the development of the business, especially the retail industry, which is increasingly competitive. The future retail industry must be the ultimate supply chain and ultimate customer experience. Competition in the market will be more intense, and everything will be so easy when users' customers are truly treated as God to serve. ”

Alvitelli did not directly object to the sudden decision of his boss because he did not see the future of the retail industry. Instead, he began to patiently introduce the good city, and because he had studied it in depth to invest in the stock of the good city company, so he had a good understanding of the information of the good city.

“Success in a good city can only be attributed to the fact that three things have been accomplished, goods have been excellent, prices have been extremely low and services have been surprisingly expected, which is a good explanation of the nature of retail.

In the traditional retail industry, profits are directly related to the sale of goods, so consideration needs to be given to purchase prices, selling prices, sales volumes, etc.

For example, Wal-Mart reduces purchase costs through bulk purchases, builds strong supply chains and logistics systems to compress operating costs, and the core is to increase profit margins.

Service intermediaries, represented by chains, rely on proportional commissions drawn from the price of the subject matter, sell a house to obtain an intermediary fee of 2.7% of the house price, and the profit is directly related to the price of the subject matter.

Hao Shi is more pure, with a quota membership fee charged in advance. The profit level is only related to the number of members, not directly related to the sales of goods and gross profit level.

Its front-line threshold allows members to focus more on only the broadest middle class in the United States and more on service delivery. More importantly, prepayment mechanisms, in addition to providing a sustained and stable cash flow for operating activities, psychologically create a "buffet effect” that effectively increases user buying activity. ”

“The middle class... ”

Listen to Alvitelli's introduction, Andy also has a deeper understanding of the good market, in fact, the reason he wants to acquire a supermarket chain is also to improve the in-line channels within the asset, so that the products produced by his company can complete a self-cycle, which requires a series of all external sales channels.

Whether it's newspapers, magazines, books, games, movies, mineral water, milk, champagne wine, and all kinds of products produced on the farm, as his career map expands horizontally, he has to find a way to keep the entire industrial chain alive and not let these resources go to waste.

Good City is undoubtedly the best acquisition target, and the most important thing is that Good City chooses the service class, the middle class.

What does the middle class want?

The middle class, not the wealthy class, is in the middle of society, there is social pressure to move to the upper echelons, the time cost is high, but they are more interested in experience, quality and the xing price ratio. Many e-commerce “many, fast, good, province” four-word strategies, in fact, the middle class pay more attention to “good” and “province”.

The middle class is more cost-effective than the rest, and they are willing to pay premiums for quality designs and experiences, but only if they are worth the price. This is also why the city is positioning itself more as a warehouse member than a luxury store.

“How much do I have to pay if I start acquiring Good City now? ”

Hearing the boss's problem, Al couldn't help but sigh in his heart, as an asset investment match, good city may be better than Wal-Mart, but really to say acquisition, he really doesn't look good for traditional retail hit by Amazon.

“With a market capitalization of around $20 billion and a closing price of $44 last Friday, the price of supermarkets has been rising steadily since 2003. The biggest setback has been the United States financial crisis, which hit $74.45 on 15 May 2008, down the road and reached a minimum of $38.44 on 9 March 2009, with a cumulative maximum decline of 48 per cent.

And that's when we bought three percent of the good market shares. ”

“Ha, four months up six dollars, not very strong.” Andy laughed, although the tone of voice was not ridiculous at the time, and while the United States had rebounded, it had been shaking downward for two months, keeping up the upward trend, which was already a good stock.

“So how many more shares do I need to acquire to become the number one shareholder? ”

“It takes at least 23 percent to be the first individual shareholder, but it doesn't make you the chairman of a good city, because Jeffrey Brottmann, the founder and chairman of a good city, shares almost 40 percent with co-founder Jim Sinnegal.

And these two founders, who are the spirits of the good city and the root cause of the success of the good city, can get more than 50 percent of the equity support. ”Alvitelli said a little helplessly.

“Tsk, a piece of iron!” Andy couldn't help but smash his eyebrows into his mouth and mumble.

“There is no way these two founders are loved and supported by the company and shareholders, which stems from the corporate culture of many good cities.” Alvitelli explains, "In fact, the success of a good city is a small probability event, and prediction is difficult. And the good city can thrive under Wal-Mart's repression, relying on business models and genius to manage victories.

Good City is typical of the industry through talented management. The company reaches $400 million in annual sales in a store in Korea. Good City success is the result of intelligent management, corporate ethics and diligent cultivation. It is extremely rare. ”

Andy couldn't help but get more interested here. You know, the business model is easier to understand. After all, the world's martial arts, only fast and unbreakable logic is known to many people. In business such as low gross profit margin, high turnover, and thin profit over-the-counter sales are the competition secrets of many leading industry companies, and the lower the gross profit margin, the higher the management requirements.

Only a few companies opt for a high gross profit margin policy, with better quality, higher prices, more spending, higher difficulty, and premium money.

Genius management, on the other hand, can be understood only through long-term observation. Management with “smart management, corporate ethics and hard work” is not required, and it is extremely difficult to prejudge.

This management model is worth investing in because it's the foundation for building a century-old business, and as for power, Andy can be captured in the hands of immortality. After all, he can keep Howard Schultz, the founder of Starbucks, in control of most of Starbucks' power, and manage Starbucks, so he can allow another such business to exist.

Good City's number one shareholder, he's gonna get it!

“How much liquidity do I have now, native United States? ”

“$10.3 billion. ”

“Tsk, so much hasn't gone out yet? Five billion shares in Good City can be bought out first. Of course, if anyone is willing to sell the Good City shares in hand, the price is right, how much is needed, after becoming the number one shareholder, the power can be delegated, but Good City must be my Andy Smith property!” Andy looked sharply and said firmly.

“Understood." Seeing the boss's attitude so resolute, Alvitelli also knew that persuasion was useless, but it wasn't a mess, and the think tank was busy again for some time to come.