Good Hands Capital
892 posts
@goodhandscap
Helping $5-100M biz unlock trapped EBITDA & Cash Flow. P&L diagnosis, contribution margin, align incentives. Upside advisory and SMB investing. Proud dad of 3.
.@ericries explains why former Costco CEO Jim Sinegal refused to raise the price of everything in the store by $.03, despite the fact that Costco knew it wouldn't decrease sales, and would increase their net income by 50%: "He says, 'It's like the business equivalent of taking heroin. You do it once, and then you got to do it again, and again, and again. Next thing you know, you're not the low-price leader.'" "You can get away with screwing people over. You always do it, no matter what. You raise margins. Margins are a source of strength." "But Costco is built on a very different philosophy, which is that margins can be a source of weakness. @JeffBezos understood it. He used to always say, 'Your margin is my opportunity.'" "When you're making too much money, when you are being too extractive, you're actually harming your competitive position in the long run." From his appearance on the show in May.
