551 replies to this topic

[Mike K.]

Costco can afford to pay the wages their employees receive because you and I are doing it for them! There's really no great secret to their success other than they've managed to convince us to pay them $50 annually for the privilege of buying huge quantities of goods from which they profit even more.

In Victoria alone I'd say they have 25,000 members, at least (I'd be inclined to think they may have well over 50,000). That means we're paying Costco at least $1.25 million and perhaps upwards of $2.5 million annually for nothing more than access to their store.

One estimate suggests there are 6.2 million Costco members in Canada or 1/6th of our entire population. 1/6th of the south Island's population is 60,000 give or take.

[sebberry]

When I had my shop I had a customer ask if I could match Costco's price on a keyboard and mouse set. 

 

I told them that once we completed the $50 membership sigh-up, I could. 

[VicHockeyFan]

Costco can afford to pay the wages their employees receive because you and I are doing it for them! There's really no great secret to their success other than they've managed to convince us to pay them $50 annually for the privilege of buying huge quantities of goods from which they profit even more.

In Victoria alone I'd say they have 25,000 members, at least (I'd be inclined to think they may have well over 50,000). That means we're paying Costco at least $1.25 million and perhaps upwards of $2.5 million annually for nothing more than access to their store.

One estimate suggests there are 6.2 million Costco members in Canada or 1/6th of our entire population. 1/6th of the south Island's population is 60,000 give or take.

 

Costco can pay higher wages as they need less employees per dollar sold, that's all.  Heck, you might argue Costco could pay even more, since their profit per employee is higher.

 

Cosrco needs less employees per square foot, as they sell much less SKU's.

 

Or you could argue that Walmart ought to halve their profit, from 3.5% to 1.7%, but that would only give each employee an extra $3k per year.

 

 

And according to this table, if Costco did not charge a membership fee, they would be in the red, as membership fees collected exceed their annual profit.. 

[concorde]

^ well said, I agree completely

 

Costco already pays a decent wage. So step 1, shop at Costco instead of Walmart.

The idea that products would be 25% more expensive if people were paid more is total nonsense of course

I already mentioned that, but show me other stores with the same examples.  Costco is different in that you have to buy huge quantities to save, I can't buy a 4 pack of toilet paper, I have to buy 30 rolls

 

Wal Mart works on a net profit of 3.13%.  Explain how they are supposed to increase their wages by few dollars and still make money without increasing prices?

[Mr_E_Squirrel]

I would be willing to pay 1.5% more to the already low prices ..

 

http://www.policymic...d-a-living-wage

[VicHockeyFan]

I would be willing to pay 1.5% more to the already low prices ..

 

http://www.policymic...d-a-living-wage

 

The article lost me at:

 

Most of Walmart's staggering profits — $17 billion in 2013, and $13 billion from food stamps alone

 

 

 

The author decided to move all the food stamp sales into the profit side?

 

OK, I kept reading, there is more:

 

So Walmart likes its insane profit margins

 

 

We already know their margins are about the smallest in their industry, and perhaps the smallest in all industry.

 

Food stamps are highly profitable for Walmart: it received around 18% of the $76 billion in food stamps that the government gave out last year.

 

 

Everyone knows food stamps are just a prepaid debit cards, right?  They are as profitable as other forms of payment, no more, no less.

 

That article really is bunk.  It really does point how how poor people rely on the low prices of Walmart though.  That should be championed, how they drive down prices.

[Mike K.]

Right. You can choose to use your food stamps wherever you want.

[concorde]

Okayyyyyyyyyyy, I'll bite.  someone show me how they came up with a 1.4% price increase to cover a $5/hr increase.  

 

My quick numbers, and I could be wrong, its closer to a 20% increase

[VicHockeyFan]

Okayyyyyyyyyyy, I'll bite.  someone show me how they came up with a 1.4% price increase to cover a $5/hr increase.  

 

My quick numbers, and I could be wrong, its closer to a 20% increase

 

The article says they need to come up with another $4.8B a year to do it, to raise the wages.  And that's on sales of about $450B.   So 1.4% sounds correct.  The article says that it would save the government $300M in food stamps, that's what the Walmart employees get.   But you'd be raising prices to all Walmart consumers by almost $5B to save the government just $300M.  

 

Where is it better the $5B be?  In the hands of the Walmart employees (the working poor), or in the hands of the Walmart shoppers (who we know are often the working poor, or completely on welfare payments)?  If your goal is to help the poor, is there much of a difference here?  Workers might be able to get more work hours, the disabled or unemployed might not have that opportunity, maybe better to leave as much cash in their hands as possible.  Now I'm not saying all Walmart shoppers are unemployed or welfare recipients, it's a small percentage, but of all the workers there, zero percent are unemployed.  

 

But the issue to me is, why would you pay a cashier $13.xx per hour, when clearly there is demand for that job when it only pays $8.81/hr.?   I mean, that's the lowest of the low jobs, it's so very simple that even customers with no virtually no training can do it (self-check-outs).  A job that requires at best one or two days of training until you are proficient enough to work on your own is not in the least a skilled job.  Your job is to find a bar code on an item, ensure it's scanned, and then safely pack the items into bags, and collect payment.  No sales skills, no product knowledge, no math required apart from adding the bills you receive, to make sure it's higher than the amount your total is.  Type that number in, and grab the change the till tells you.  Or process a card.  No critical thinking required, no real hazards, no hard working conditions or environment (ie. out of doors in tough weather), no working in remote isolated locations.

[sebberry]

Quebec unionized Wal-Mart workers win Supreme Court victory

 

The Supreme Court of Canada has sided with the union representing former Wal-Mart employees who claimed the company violated Quebec labour law when it abruptly closed its store in Jonquière, Que., not long after the workers voted to unionize.

 

In a 5-2 decision delivered Friday morning, the court ruled that the 190 employees who were terminated when the store was closed are entitled to compensation.

 

[...]

 

 

http://www.cbc.ca/ne...ctory-1.2689646

[spanky123]

I never really understood the argument that if you pay a subset of society more money for doing the same job that they will have more money to spend and the economy overall will improve. Seems to me that the argument completely ignores the other side of the supply/demand curve which states that more money increases demand and causes prices to go up. To me living wage folks have never been concerned about actual wages as they have been about leveling the societal gap between rich and poor. Now there are exceptions to every rule in that there are many hardworking poor folks and lazy rich buggers but I think that in general there are differences between rich and poor which extend beyond simply payroll.

I remember 20 years ago us arguing about keeping Walmart out of communities to protect small business. Small businesses survived by adapting and those that didn't were put out of business. Today the threat is from a company that councils and politicians can't zone out off their regions and that is Amazon. My guess is that Amazon has done more to drive certain industries under and lower the wages that business can afford to pay then Walmart ever did and yet we hear very little about their impact.

[Mike K.]

Retailers are very vocal about Amazon and it's ilk if you bring up the topic. I'd be willing to bet every small business retailer has had people walk in, try on their wares, then walk out and purchase the same goods online, sometimes even asking the retailer to match the online price or they'll walk.

My sense is we'll lose traditional retailers in the not too distant future but we'll see showroom-type operations where the retailer displays certain wares which the customer tries then those wares are ordered from a central warehouse and shipped to the customer.

In short the future of retail may be very similar to how we used to buy from catalogs.

[VicHockeyFan]

And so be it, that's the new reality of retail sales.  The "Shop Local" people can scream all they want, but 95% of people are very price concious.  

[dasmo]

Yep, you gotta offer an experience. This is why apple stores do very well even though you can buy cheaper elsewhere. It's also why our boutiques downtown have survived. It's a nice experience...

[lanforod]

Apple stores do well because of brand recognition. Their stores are quite lousy actually. Best buy mobile copies their stores but I doubt they are super successful in comparison.
I don't think retailers will completely disappear, but the small shops will get squeezed out, and many already have. I expect only larger chains and stores to remain, and some super thrift type ones like Dollar stores.

[VicHockeyFan]

Anybody buy online for home improvement products?  It's a HUGE market, but I bet online it's still very, very small.  BuildDirect is a Vancouver company that's trying to change that.

 

 

BuildDirect created its own logistics network that connects manufacturers around the globe with customers in the U.S. and Canada, and gives them predictive data for what will sell and where, which helps tailor manufacturers’ production to consumer demand.

 

“We provide the signal that makes their business more efficient. … We have signals that tell manufacturers which colours, which styles will sell, and which ones won’t,” said Booth.

 

“They save a whole bunch of money by not producing products that won’t sell. All that reduces the price through us to the eventual buyers, but it doesn’t reduce the cost at the expense of quality, it reduces the cost and retains quality.”

BuildDirect fills orders through its 10 warehouses in the U.S. and two in Canada, but it doesn’t have to pay until the goods sell.

 

“Manufacturers hold consignment inventory in our warehouses,” said Booth, adding of the 130 manufacturers on the BuildDirect platform only one has left, and every day the company gets requests from manufacturers wanting to join or expand their product categories.

 

“It’s essentially based on trust that we’ll sell it, and when we sell it we’ll pay them. That’s proof of how valuable our data is to manufacturers.”

 

The company sells to contractors and subcontractors as well as do-it-yourself customers, with 85 per cent of its customers in the U.S. and the remainder in Canada.

 

 

[Mike K.]

If they received requests to maintain inventory every day, as they say, wouldn't they have a lot more than 130 manufacturers on their platform? Just sayin'.

[spanky123]

Retailers are very vocal about Amazon and it's ilk if you bring up the topic. I'd be willing to bet every small business retailer has had people walk in, try on their wares, then walk out and purchase the same goods online, sometimes even asking the retailer to match the online price or they'll walk.

My sense is we'll lose traditional retailers in the not too distant future but we'll see showroom-type operations where the retailer displays certain wares which the customer tries then those wares are ordered from a central warehouse and shipped to the customer.

In short the future of retail may be very similar to how we used to buy from catalogs.

 

People are price conscious but the reality is that most will pay a little more for decent customer service and the ability to get the product right away. The trick is figuring out how much "a little more" actually is.

[VicHockeyFan]

If they received requests to maintain inventory every day, as they say, wouldn't they have a lot more than 130 manufacturers on their platform? Just sayin'.

 

130 manufacturers could mean 10,000 products.  And their terms are "we'll buy but only after you warehouse it on consignment in our facility".  Maybe not everyone likes those terms.

 

They are trying to solve not just price, but supply problems, so they want to have the items in their warehouse, so it gets done.  That's their goal, good price, and ON TIME.

[dasmo]

I guess Apple nailed the customer experience with. "Lousy" then since they are one of top retailers in the US. It's the Big Box stores that are more at risk than the small boutique stores not the other way around....