The Ben and Emil Show - BAES 165: how Costco mastered capitalism

Episode Date: August 13, 2026

The boys go deep on the fascinating history of Costco. It's a thing of beauty. We also shot over an hour of footage inside Costco, available on https://benandemilshow.com/ Give this video a thumbs up if you enjoyed it! And please leave us a comment! It helps us! For all you audio freaks: Spotify: https://open.spotify.com/show/7M0vN85aGO0zdh62hyg03I Apple: https://podcasts.apple.com/us/podcast/the-ben-and-emil-show/id1693270208 Amazon: https://music.amazon.com/podcasts/51280f1b-2fbd-4ea9-bdde-e96f70b5b1ae/the-ben-and-emil-show iHeart: https://www.iheart.com/podcast/269-the-ben-and-emil-show-117763570/ Follow us! TikTok - https://tiktok.com/@thebenandemilshow Instagram - https://instagram.com/benandemilshow Twitter - https://x.com/benandemilshow Ben - https://instagram.com/bencahn Emil - https://instagram.com/emilderosa https://www.youtube.com/emilderosa https://substack.com/@emilderosa Our newest acid video is out now so check it out! https://youtu.be/7vkFY3f5kkw Some other videos of ours you may enjoy: https://youtu.be/qX4pks0ASq8 https://youtu.be/_VOVxt3ZtIE https://youtu.be/5wsoc5pieuA https://youtu.be/dTbEk0pVh2w https://youtu.be/yGSs56bFzRU https://youtu.be/cIHWkY35cuc https://youtu.be/zBvVGHZBpMw https://youtu.be/1ZUWTkWV_MM https://youtu.be/_cM1XqA9n2U __ RIDGE WALLET: Get 10% Off your entire order & take advantage of Ridge’s Annual Sweepstakes by going to https://www.Ridge.com/BAES #Ridgepod NO PURCHASE NECESSARY. Open only to legal residents of the promotion territory, who have reached the age of majority in their jurisdiction of residence. Void elsewhere & where prohibited by law. Enter by 9:00 a.m. USPT on 8 September 2026. 2 winners, prizes total ARV: up to approx. $539,165 CAD / £284,170. Skill-testing question required in CA. See Official Rules at ridge.com/pages/rules for complete eligibility, entry instructions, how to enter without a purchase, entry limits, prize details, odds, and restrictions. Sponsor: The Ridge Wallet LLC. CASH APP: Download Cash App Today: https://capl.onelink.me/vFut/zd0taway #CashAppPod Cash App is a financial services platform, not a bank. Banking services provided by Cash App’s bank partner(s). Prepaid debit cards issued by Sutton Bank, Member FDIC. Cash App Visa® Debit Flex Cards issued by Sutton Bank, Member FDIC, and The Bancorp Bank, N.A., pursuant to a license from Visa U.S.A. Inc. See terms and conditions for the Sutton prepaid card, Sutton debit flex card, and Bancorp debit flex card. Cash App Green features, Savings, Direct deposit, Round ups, Overdraft coverage and Discounts provided by Cash App, a Block, Inc. brand. Visit cash.app/legal/podcast for full disclosures. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Costco, it's the only place in America where you can get a giant stuffed animal, a $3,400 bottle of cognac, a fikis for your living room, maybe a five dozen pack of eggs. The biggest dang tub of yogurt you ever seen in your life? The biggest dang tub of yogurt you ever seen in your cot darn life? In 1983, Jim Sinigal and Jeffrey Brotman opened the first Costco in Seattle, and at the time, it was the fastest company ever to hit $3 billion in revenue. They merge into the very elegantly named Price Costco. Brutal. And then they just call it Costco. And then Justin Timberlake came in it and said, drop the price.

Yeah. It's cleaner. It's very clean. I think during Jim Santa Gold's reign, he was like, we're not going above 14, 15% on anything. That's because the customers aren't really customers, right? They pay member dues. They're family. Instead of just being like, hmm, prices are going up.

Like, fuck it. I guess we'll just pass it off to the customers. They're always like, no. No. We love them. We'll build a fucking hot dog factory in Chicago. Yeah. We will slaughter our own chickens then. We must keep the price at $4.99. If you raise the effing hot dog, man, I will kill you. Figure it out. Where are you going to beat that price?

It truly is adult Disneyland, kind of. I don't know if I go that far. Adult Asian mom Disneyland. And you'll see why I said that later on in the episode. What's going on, everybody? How's it going? Today we've got a very special episode for you. We're talking all about Costco. This one's very special. That's right. Costco It's the only place in America where you

can get a giant stuffed animal. A $3,400 bottle of cognac, a ficus for your living room. Maybe a five dozen pack of eggs. A diamond ring, car tires, gas, prescription eyeglasses, gold bars. The biggest dang tub of yogurt you ever seen in your life?

The biggest dang tub of yogurt you ever seen in your cot darn life? All the energy drinks you can possibly think of. A 30 six pack of Diet Coke Levi's jeans Levi's jeans K-Swiss sneakers

K-Swiss sneakers K-Swiss sneakers K-Wis-Tennis balls tennis balls you name it they've got it plus an all-beef hot dog in a soda for just a dollar

50 all under one roof that's right one giant tin roof but I've got a question for you how does the cheapest retailer in America also have the wealthiest customer base pay its workers 30% above

the industry norm all while absolutely printing money and sending its stock to steady all-time highs. That's right. By the end of this episode, you will learn why the profit from Costco is not where you think it is, why a store brand named after a Seattle suburb scares the heck out of Proctor and Gamble, and why economists study what happens when a Costco moves into town. You might think you know Costco, but it's a lot bigger than you think.

We went into the field to find out, too. We went on the ground. We went in that dang huge store. We're both card members. We are both card carrying members of Costco. We talked to some employees. We did. We sampled the merchandise.

Oh, boy. Those cheese tortellini. Did you have one? Of course. So delicious. Furgelicious. It was just, I didn't really want a cheese tortellini at 10 in the morning. Sure.

But it was decent. You know, I was so surprised by the hot dog. I'd never had the hot dog before. You liked it. I've had the pizza before when I've been at like parties and stuff where the, you know, they picked up a bunch of Costco pieces. Pizza's okay. But the hot dog.

Good God. Also, all beef. All beef. All beef. And girthy. That pizza, 9.95 for an 18 inch pizza. 18 inch pizza? Yeah.

That's quality. That's top notch. Where are you going to beat that price? It really truly is like adult Disneyland kind of. I don't know if I go that far. Adult Asian mom Disneyland. And you'll see why I said that later on in the episode. I'm trying to think of what it is if it's not adult Disneyland.

It's like... It's like adult Chuckie Cheese? I don't know. I'm going to come up with it before the end of the episode. Spencer's Gifts or... No, that's already an adult thing. Just like a toy store. It's a toy store.

Yeah. It's a store. It's Costco. It's novel. It's fun. Yeah. I'll tell you what I like to try to bring

critical lenses to these things and I've become so dang Costco paled I don't know what to do with myself You're not the only one man You're not the only one pal Yeah we'll explore a lot of different themes Throughout this episode like How they're oh yeah look at that there it is

Oh I also tried the double chunk chocolate cookie And a little bit of the chicken bake Which was huge by the way like a foot long Truly I never could have imagined how long It just keeps going Yeah. It was a bit unsettling how long it was. Yeah, it was a very long thing.

I mean, you really do get such a bang for your buck. But look at that, 20 ounce soda, 79 cents? It can't be beat. It really looks like you're looking at an old photograph and you go, look at those prices. Yeah. I remember those days. But, well, we'll talk all about how Costco is kind of doing capitalism the way it ought to be done and why it's hard for other companies to replicate their success.

And we'll compare it to like Sam's Club and Walmart, which are, as you will find out, they stole. Sam Walt. Walt. Walton. The hell's the matter with me. It's all right. Don't beat yourself up. I'm sorry. They're not that different.

You left off like two letters. Anyway, let's start with some stats, huh? Let's start with some fun stats because I thought you guys would get a kick out of this. Fiscal year 2025 revenue for. Costco last year. $275 billion total with $269 billion in net sales, which comes to about $739 million per day. And even 43 years later, sales are still accelerating year after year with sales being up 7.4% year over a year.

They've got 931 warehouses worldwide with 639 in the U.S. This was a huge shock to me when we were talking about it. I didn't realize that it was an international thing. Something about it feels so American and that if you try to replicate it in other countries, it would fail. But that is not. They go the case. Crazy for it in China and Japan. I truly.

Four hour lines to get in. I find that shocking. They love good value. Asian folks love good value. They know and recognize good value. These things, these warehouses range from 80,000 to 230,000. thousand square feet and the average about 146,000 square feet. The total square footage of all the combined Costco's equals about 4.83 miles square miles of

Costco. I like that. Put them all together. Yeah. And let me just walk through the big five mile Costco. A big ass city. The back rooms of Costco City. Yeah, Costco City, man.

Fun fact, the busiest store is not where you think it is. If you had to guess. This was not where I thought it was. It is in Iwelae in Honolulu, and I believe I've actually been there. But I will tell you, it does make sense if you think about it. Yeah. Hawaii's a hard place to get things already. Yeah.

Things are more expensive. I remember the first time I went to Hawaii and just tried to get groceries and you're like, whoa. It costs a lot of money you ship there. So you're definitely going to want to get value when you're shopping. That's exactly right. One in four people on Oahu are members of Costco. Each store averages... I also think gas is more expensive there?

Oh, yeah, everything. Everything's got to be shipped there, man. If they got a gas station on that Costco on Hawaii. Yeah. You know people are waiting in line. They're trying to save that. It would be worth it just for that. Yeah.

Each store averages about $291 million a year in sales. California has the most locations with 140. And there are 145 million cardholder households with 81 million paid memberships. Yeah. Yeah. Do I have that stat right? Yeah. The card holders is because if you live in the same house, you can get a card. So, like, I'm a member. I could just give Sarah a card. So that's the distinction. There's 81 million paid memberships.

But there are 145 million cardholders. So that means people have the same household and that kind of thing, which makes sense. Because most of this stuff is for families. Yeah. I would shop there more. It just doesn't make sense. I'm a single guy. I shop there. It's just me and Sarah and Kev. Yeah. I do be getting the big yoghers.

I mean, we bought that Ritz. It had, it's a Ritz Cracker box. It had 18 sleeves of crackers. Yeah, yeah. So you're just like, yeah. I can't. By the way, Ben and Emile's Show.com is where you will find the, we've got an entire, over an hour of footage of us meandering through Costco,

having all kinds of adventures, sampling things, talking about stuff. so go enjoy that. Anyway, there will be some inter-spliced here, but we'll put the whole thing on the website so you can see it. Cardholder's renewal rate is 92.3% in the U.S. and Canada and 90% worldwide. So people do be loving Costco.

It's so much. Mainly sticky. Other subscription services would flounder. But just would do anything for these rates. Oh, yeah. For these retention rates, it's insane. These numbers are insane. They are the third largest retailer behind Walmart and Amazon.

Amazon and members visit an average of 23 times per year. They buy about nine items and spend about $114 per trip. So for all of you homies on the spectrum, I hope you enjoyed those stats. Here's a few more. They're, uh, the pro, let's get into some product stats before we get into the history and all that stuff. The number one selling item at Costco is Kirkland's signature toilet paper. I bought some while we were there. Yes, you did. You contribute. to that stat with over a billion rolls sold per year and about $400 million in revenue attributed to just the thing people are shitting and they are wiping themselves with Costco Kirkland signature.

There's one thing we know about people, they're shitting. They are shitting. And they can't stop wiping their little butts with Costco paper. I wish we could figure out how much poop is attributed to Costco products. Hmm. Hmm. I think we could have an AI crunch the numbers. probably yeah yeah i just keep thinking about that guy who

solved that weird math conjecture they couldn't solve the math problem and he just kept telling the AI he kept trying harder just do it i know you could do it and then it finally was like okay fine here it is i cracked it that is really funny just do it keep going uh kirkling's signature overall folks i was shocked by some of these stats Kirkland signature is $86 billion a year in sales or one third of Costco's entire revenue.

That's bigger than Nike or Coca-Cola as a consumer brand. Yeah, the Coke thing kind of breaks my brain. That just Kirkland. And that's, I want to, like, you might be going, oh, that makes sense. Like, they sell Coke there. No, no, this is just the Kirkland signature products. So like all those little things, when you see a water bottle that's like Kirkland signature, you go into the liquor aisle.

at Costco and you see like Kirkland vodka. Yeah. That's what we're talking about. That's a bigger brand than Coca-Cola. Another fun stat about the products, the $1.50 hot dog, which we all know and love, has been frozen in time since 1985. It should be worth

about, it should go for, rather, about $4.50 cents adjusted for inflation. But famously, the CEO in 2009 was Craig Jelinek. He approached co-founder Jim Senegal about raising the hot dog price to combat inflation and Jim

said, if you raise the effing hot dog, man, I will kill you. Figure it out. So they did. They created their own hot dog manufacturing facilities in Chicago and Los Angeles to control the supply chain. I want to visit the

L.A. hot dog. I want to go to the Chicago one, man. They got a whole Chicago dog Costco center. I'm telling you, man, that thing came out piping hot. It was perfectly shaped like a hot dog ought to be. The bun was good. The mustard was fantastic.

It looked like one of the better hot dogs. It's a really good hot dog. As soon as you bit into it and I could see the inside, I was like, wow, that looks nicer than most. It's not that like dull. Because it's not like pork byproduct. It's pure beef. Dull pink. That is just like nasty.

It's like a vibrant darker red. I'm going to throw out every time I hear beef, I've got one of my ticks is. Mr. Beef? No. Good guess. Back to the future too. When future Marty McFly, or actually present day, when 1985 Marty McFly goes into the 50s diner and there's the computer screen of Ronald Reagan coming down and asking what he would like, it glitches and it goes, we've got blah, blah, blah, beep, beef, and da, da, yeah, every time I, anyway. Wait, but that's in the future, you know? But it's like a

computerized Ronald Reagan. Welcome to the cafe news. Oh, yeah, yeah, okay. Where it's always the 80s. Anyway, the 499 rotisserie chicken sold 100 million chickens. There were 100 million of those chickens sold last year. And again, Costco had to build their own poultry plant in Nebraska just to slaughter chickens. They built their own chicken Burkineau. I mean, the thing we keep talking about all these instances, whether, like, how do we

figure it out? is a real theme for Costco's business where they're like instead of just being like hmm prices are going up like fuck it I guess we'll just pass it off to the customers they're always like no no we love them we'll build a fucking hot dog factory in Chicago yeah we will slaughter our own chickens then we must keep the price at 499 uh gas is 10% of their revenue and we're almost done here

they only have this is imperative to the way the business functions they only have 4,000 skews, meaning 4,000 different products, which sounds like a lot, but compare that to Walmart's 140,000 skews. Yeah, and I mean, you can feel it. Like, that's the thing, we had this moment where you were like, oh, look, tennis balls. And they had one type of tennis balls. What was it, Prince? No, they had the, like, very common, very base level, just classic pen tennis balls,

which are fine, you know, if you want to, but I would have, you know, like to see a different tennis. If you're in the market for 6,000 tennis balls, you're not going to be splitting hairs over what brand it is. It's like, all right, I'll get to 6,000 pins. Hey, guys, we got to take a quick break from talking about Costco to talk about your money, which is pretty on the nose, given the nature of this episode. Hey, you know, sometimes money's tricky, right? It's really tricky. I mean, especially if you didn't grow up in a household that

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Use code bays at monarch.com to get your first year of monarch core half off at just $50. That's 50% off your first year at monarch.com with code bays. And here we go. Statistically, the typical shopper is an Asian-American woman, age 35 to 44, college-educated, good for her, household income over $125,000. And it's interesting because, like I said, they are the wealthiest consumer base of all the consumer product, Target, Walmart, coals, all that shit. But Costco is famously among the cheapest, which just goes to show those wealthy folks, man, they love to pinch pennies. They love to get a bargain.

I also do wonder if it's like the, what is it called? The like mental barrier of membership. Yeah. Okay, well, I have to pay to get in there. you know, even if it's going to save me money, I don't want to pay up front. Yeah, wagecocks aren't exactly rushing to sign up for that. I have that sometimes when I'm like, I wish I could, there are tons of things where I'm like, as soon as I see the subscription fee or something where I'm just like, eh.

Yeah, I feel you. But then I'm like, wait, why? I would get a lot of value out of it. Especially when I first got my Costco membership, I didn't go the entire year. and then it lapsed and I was like, well, and then I got it again, and now I've been going. So part of their success also, and this is one of the last few stats, the retail worker turnover averages 60% annually elsewhere, 60% retail worker turnover every year. But Costco is just a fraction of that, with a large share of their U.S. employees having worked there for over 10 years and senior management

averaging 25 years plus. Case in point. The current CEO, this guy, Ron Vakris, or Vakris? Who knows? He started there driving a forklift 42 years ago. God, we love that. We love that.

We love a guy driving the fore. He's forklift certified. I mean, I have to say, I mean, I don't want to jump ahead because we're going to talk about the labor stuff, but it's not just him. I mean, the original guy, we're about to get into the origin of this. you mentioned his name

Jim Sinigal he basically started at a former warehouse thing like this it seems like all of these guys are like homegrown they know the business from the inside out and I think that's where you get a bit more of these

unconventional fixes where they're like okay how can I simplify operations how can I make it easier for employees how can I make sure whatever rather than just some like dude who got his MBA at fucking Harvard and he's like numbers which I mean we've talked about in the show there there was a thing in the financial times where they were like we went through uh the difference between

CEOs who had MBAs and didn't and the main difference was that uh CEOs who went through an MBA program tended to cut labor costs even further and it was like that's their big secret if we just pay these people less we can save money on labor we can cut corners but I mean I love seeing these guys, like a guy who literally is working on the floor. Yeah, man. Just promoted, promoted, promoted. Yeah. It's fantastic. So let's get

into the origin story, shall we? There's a guy named Saul Price. This is psycho. I honestly, when I was reading it, I was like, you're making this up. Because his name is Price? No, just like the whole, it's like too beautiful. Oh, yeah, that's great. A lot of things had to happen at once.

Yeah. You were born in right place, right time kind of thing. But also, you know, he came from humble beginnings. This guy's name is Saul Price. He's a New York-born San Diego lawyer. It comes from a poor New York City Jewish family. They moved to San Diego. I found this interesting. He had an eyedroop that made him an overachiever. So if this man didn't have an eyedroop, we may never have gotten Costco. I have a friend who, like, is similarly... Droopy. What? Drewpy?

No. Oh, look at that eyroop. Holy shit. it's not as severe, but he has a speech impediment, and he's, like, one of the most, like, high-achieving people I know. That would be me, man. So, all of you

curse God for... Whoa, whoa, whoa, whoa, oh, I thought you were going to say, if you're cursed with him, like, that's not a curse. No, no, if you're not achieving the things you want in life, curse God for not giving you a droopy eye or some kind of cross the bear. Boy, that thing is droopy a hell. So this guy, they moved to San Diego,

the time, San Diego was like kind of a, it was a small town. It was not one of the top 10 most populous cities in all of America. And he becomes a lawyer. He goes to USC. He comes back to San Diego. And he's advising all kinds of different clients. And he's getting enmeshed with all these different businesses and stuff as during World War II and post-World War II, San Diego is really booming and up and coming. He's advising retail clients. all sorts of stuff. And he takes a trip up to Los Angeles and here's about this company called Fedco.

Fedco. Where federal employees got together and created a membership club similar to what you, what Costco is today. Oh, except they paid $2 one time. $2 one time and you're a fucking member for life. This was also decades ago.

Oh, yeah. $2. This was, that was $300. Yeah. No, I don't know. It was a non-profit buying club for these federal employees. And then also, so keep that in mind, he really likes this FedCo. And then in San Diego, there was this thing called the Seven Seas Locker Club. And it was catered to Navy Sailors where they could store their shit.

In addition to just lockers, you know, that just got them in. Then they would sell them on laundry, clothes, food, and so on and so forth. Famous military town. Famous military town. Saul gets involved with all these businesses helping out and stuff. And then he tries to bring FedCo to San Diego. He says, hey, let me open. I love your business model, Fedco.

Can I please open a franchise down in San Diego? And they go, no. No, we're non-profit. No. You may not. We hate San Diego. He says, please, please, Fedco, please. And they say no.

And then he just says, fuck it. All right, I'm going to start something called Fed Mart instead. In 1954, and it pioneers what would become the Costco business model, which is provide the best value to customers, treat employees well with good wages and benefits, engage in honest business practices, and above all else, make money for investors. Because at the end of the day, that's what you've got to do. Look at that Fed Mart, man. That is a beautiful...

I like how it has an asterisk next to its name. Fed Mart. Not associated with FedGo. Is it? I do wonder why they did that. On a technicality. So they very quickly are profitable. And they go public and they start something called the FM brand, which is basically a lot like Kirkland Signature.

Kirkland Sig. Yeah, man. We love Kirkland Signature. We love a good origin story. And Mr. Sam Walton, this guy named Sam Walton, who you may know, as the founder of Walmart, he took notice. And he goes, oh man,

this guy, Saul's got a great thing going. They're friends, by the way. They become friends. He apes the name, starts Walmart. And by the way, he attributes everything about Walmart to having learned it from Saul Price.

He says he learned more than anybody. Saul Price is a legend. Saul Price is a legend. At the time, also, working at Fed Mart, there was an 18-year-old bag boy. hot, hotty, super hotty. All the women go nuts for this bag.

Both of his eyes are drooping. Both of his eyes are drooping. No, they're normalized. His name, Jim Sinigal. He starts working under Saul for 20 years, and he eventually becomes he's running distribution. He's figuring out warehousing. He becomes his own kind of genius in that. And at some point, many years into the Fed Mart story, they take a trip to Europe.

because they want to partner with this huge German conglomerate. They like the idea of these. Germany was kind of ahead of us. They had these like super, not markets, but like superstores where you could do sync Walmart and Costco, where they had that. Stop doing it in a German sinister way. We don't like it. Doing it in a weird German sinister way.

Yeah, they give you a temporary tattoo. The cashier will not, oof. The cashier will not. laugh when you make a joke at check out. That's what's funny. That was a good joke. This is how we, that's how they, you know, humor there is just acknowledging that was funny.

Yeah, that's why I did my thing. But I'm doing it as a German guy. That was funny. They go to partner with this German conglomerate. They do. They sign on. They basically get bought by this thing. And the head of this

conglomerate, his name is Hugo Man. Hugh. Go, man. He and Saul have a huge fight. He pushes Saul out of the company. And then he gives Jim Senegal the task of telling the whole company, hey, tell him what's going on. Saul's out.

And eventually they go under in 1982. The Fed Mart just completely shits the bed. That's why you never cross Saul Price. You never cross Saul Price. But Hugo Mann was kind of happy with that because he just was like, this isn't i don't want to keep doing the supermarket thing this shit sucks the real estate is what's valuable case in point 1982 when they go under they sold over 40 stores to target target targe which was uh an up-and-coming brand so back in uh back when he gets kicked out

In 19776, Saul is pissed and he's now 60 years old and he's like, I love this game. I love... I'm obsessed with subscription-based shopping. Shopping experiences, yes.

I can't get enough. I can't get enough of this shit. I want to do it because I know I'm on to something good. And I fucking love slashing prices. And by the way, he's just like a nice guy. He's friends with Sam Walton. He invites Sam,

Sam Walton was like, can I come out and check out what you got there? And he's like, sure. bring a patent paper like steal my shit I don't care well he kind of stole his he he stole Fedmart to start from FedCo to be fair yeah true but Jim Senegal basically steals Fed Mart yes and so you're like I mean price club and so I was like is he not pissed but then he's like well I mean he ripped it off himself yeah he doesn't seem to care look at that guy that's a that's an American look at Jim look at those beefy fingers good

God Almighty. Talk about hot dog. Starting as a bag boy. Yeah. So he and his So Saul Price at the age of 60 he and his son Robert

opened the aptly named Price Club in an airplane. If you're old enough, you've probably experienced the Price Club. We were members of Price Club. I loved going with my dad

to Price Club and my dad loved being a member at Price Club. A real fixture in the 90s. Oh yeah. Was my dad a stupid idiot for not buying stock in Costco since, you know, price club. No way. Who could have known at that point?

If, dude, buy what you know, man. We still went on when eventually, as you'll find out, they merged. We still kept going to Costco. God damn it. Hey, gang, we've got to take a quick break to talk about Ridge and some pretty exciting stuff going on, man. It is a sweepstakes. You already know Ridge. They make the power banks, the wallets, the luggage, the premium everyday gear.

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I want that cash, baby. You're going to take one of the cars? I don't know. I might get one of the cars if I were to win. I don't know, man. I don't know. Or I'd probably take the 100 grand cash. Just like to get dinged up in L.A.

When I'm going, I could have 100K. There are only 1,500 Lamborghini Hurricanes Toradoes that exist. And Ridge is giving me. I guess I might be able to sell it for more, too. Yeah, yeah. I don't know what I'm going to pick anymore. Yeah, man.

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get you more entries. That's ridge.com and use code Bays. After you purchase, they will ask you where you heard about them, so please support our show and tell them our show sent you. Anyway, they started an airplane hangar in San Diego, because these guys just love being in San Diego. That was originally owned by Howard Hughes. No way. I didn't see that. The story is so weird. It's just fun. It's so crazy.

It's such a fun origin story. But Price Club was just for business owners at first. It was just for people owning businesses. And they used Jim Senegal's idea for the warehousing thing at Fed Mart. Basically, Price Club was, they could be the warehouse for businesses so that they don't have to. Hey, you need a bunch of soap. You need a bunch of shit. Price Club. Oh, look at this.

Membership invitation for business people. This is an old ad. Over 4,000 products. 100,000 square foot building. $1.5 million in inventory. That's really funny. It's a different time. Restaurant supplies, store supplies, janitorial supplies, appliances,

housewares, hardware, garden tools, blah, blah, blah, cameras, everything. And that's not really working out, man. And then eventually they do switch to being open for everybody. But yeah, Sam Walton comes out in 1982. He wants to check out Price Club. He's already started Walmart at this point. And Soul Price is like, yeah, sure, Sam, come on out. And within 12 months after seeing Price Club, Sam Walton starts Sam's Club.

Fucker. Fucker. But Sam's Club... Sucks. Well, it's getting better, but... Yeah. It couldn't even... We'll talk about Sam's Club.

later. Look at that shit. Yeah. Oh, they are. I mean, they are competitive. They've got their pizza. They've got their, yeah, but I don't want to go to Sam's Club. It's got that Walmart stink. Oh, it's like Netflix where you're like, yeah. Why'd you shoot it all weird? That's exactly right. Yeah. So here's another little fun fact. Around the time, right after Sam Walton comes out to San Diego in 1982 to check out Price Club, a man named Bernie Marcus came out to visit his buddy Saul. This guy, Bernie Marcus, was running this thing. called the Handy Dan Hardware Chain. And just like Saul Price, he gets kicked out of the Handy Dan hardware chain.

Who knows why? Germans probably. Germans probably. Fucking Germans. We love the Germans. So Saul says, here, take my playbook. Do this with hardware. He encourages him.

And this guy, Bernie, goes out and starts Home Depot. Look at this. Saul Price is just given, he is a golden goose. He is laying egg after egg after. after egg. Giving his buddy, hey, go, yeah, take my idea, do this shit. Hey, Bernie, start your fucking, uh, start Home Depot, man. And then here's another fun thing. 1982. A lot of, a lot of shit happened in 1982. Another friend of Saul's named Bernie Brotman. He's got his son Jeff. And they, they call up, uh, uh, uh, uh, uh, Saul price.

And they say, hey, Saul, we really like Price Club. Can we open a, Price Club in Seattle? And he says, nah. Well, the guy who answers the phone, who they talk to isn't Saul exactly, but he says, no, you can't, we're not going to do that.

They do start a clone up there. And the son, Jeff, called, was referred to someone to come up and help. And the guy that, the guy from,

the guy who the guy from Price Club, referred and said, hey, I know somebody who can come up there and help you. Jim Sinigal. Bag boy. Not fair to call him bag boy. By the time he was at Fed Mart, he was like executive... Oh, yeah. Executive of Vice President of merchandising and everything, so...

So in case you're lost, this guy in Seattle starts a copycat Price Club. Price Club says, eh, we don't want to be associated with you, but we will help you out. Here's a guy who can help. and it's our friend Jim from Fedmart. And so Jim goes up there and they start Costco together. In 1983, Jim Sinigal and Jeffrey Broughtman opened the first Costco in Seattle

and at the time it was the fastest company ever to hit $3 billion in revenue. They opened two more warehouses pretty quickly. Spokane and Portland. Spokane, excuse me. Oh, it's spam. I'm getting a phone call from spam. God, I fucking hate it.

I wish Saul Price could figure out the whole spam thing. I know. So just 10 short years later, Costco and Price Club. Price Club. Price Co. They merge into the very elegantly named Price Costco. Brutal.

And then Justin Timberlake came in it and said, drop the price. It's cleaner. It's very clean. Yeah, you know, a million toilet paper rolls is cool. You know, it's even cooler? A hundred million toilet paper rolls. Oh, my God.

So let's check out Emil. But at that point, they combined 206 stores. Wow. Yeah. And they were bringing in $16 billion in sales. Absolutely insane. So it has only become more and more dominant. It's psycho.

Every year they're just going nut, nut. So let's take a look at their economic model, shall we? Let's switch gears here. All of their merchandise, for the most part, is sold at cost. And membership fees are basically most of the profit. Yeah, but not actually, there's a little bit of margin. I think the average is 11% for the markup on all products, which is very low. And I think...

14% markup on brands and 15% on Kirkland while typical retail does 25% to 50%. Yeah, I think, Jim, so there were different reins. There's only been, I think, three CEOs, which is pretty crazy for. for this company. Sam's Club, for example, has had like 35 in the last... Well, because it's a bastard store. That's true.

Naturally, it would be fatherless. And, I mean, the real reason is that it doesn't do it is because they don't implement a lot of the same things... No. ...that Costco did. They're greedy. Until they got a new CEO who tried to do...

We'll get to it. But, yeah, I think during Jim Senegal's reign, he was like... We're not going above 14, 15% on anything. That's because the customers aren't really customers, right? They pay member dues. Their family. They pay member dues.

They are a family. Yes, actually. They pay member dues at a buying club. So that's kind of what they do. And it is kind of like a religion. They insist that the pricing is part of the culture and that raising prices just once would open the floodgates and betray trust with members. hence Jim's

major major apprehension to raising the price of the famous hot dog is hey that's that's just going to change everything we lose that trust we lose we lose everything

which and that membership model gives them a huge amount of leeway right you're talking about 81 million paid card holders paid memberships

and which level do you have you probably have the like 65 a year I have the 65 a year as well there's there's you can do 65 a year

individual. You can do 65 a year business, which gets you some access to other things. And then you can do the 130 per year executive thing, which is when you start getting like reward points on stuff. And so you're getting, which it makes sense. If you're going to be shopping there, you might as well because you're getting

like a ton of money back on just all your sales. I think it's like two percent return. Which is really good. It's comparable to some credit card. I figured that most people would just be doing, or like the vast majority would just be doing the individual like us. so many people are doing the $130 tier. Yeah. And it's been growing.

So that's 47% of total paid members. And it drives 74% of sales. I did not know that. That's insane. Yeah. So they're making so much money just off before people have even come in the door to buy. Ooh, we love that. Look at that.

Yeah, net sales, $84 billion. Uh, merchandise costs. Wow. Oh, yeah. 1.7 billion comes from the, what do you call it? The platinum executive, whatever it is. Just from the membership. Just from the membership fees.

Oh, that's just the fourth quarter. Excuse me. 1.7 billion per quarter just coming from that. Have you ever been to a Costco business center? I don't think I have now. It's where you can buy like bulk pens and like paper clips and whatnot. Anyway. So if you guys remember, we talked about them only having

4,000 skews, individual skews, doing that is part of their business plan because it provides a lower cost of goods, in fact, the lowest cost of goods in all of retail. You have fewer choices. It means you trust that Costco has chosen the best deal for you. So when you see that they only have like Dura cell batteries and Kirkland batteries, you trust that it's not like the grocery store where it's like, okay, do I pick Energizer? Do I pick Dursle? Do I pick this? That's part of the thing. You trust that Costco has made the best deal because they are a buyers club. And there's also, I think, some studies that show it's a better shopping experience. I think when...

Less decision fatigue. Yeah. And people are, I don't fucking know. I go to even just like a CVS for batteries. I'm like, what the fuck are you? Yeah, you start crying. Why is this one so much cheaper? Is it not going to work?

There is also an element of scarcity. It's called like the treasure hunt element because they do rotate products. They frequently rotate about 25% of their floor stock. They don't have any fancy displays, no lighting. They don't spend any money on that kind of shit. In fact, they don't spend any money on ads, in fact. So that all equates to lower prices. Which is crazy.

How did my parents find out about it? Word of mouth. Word of mouth. Chicken and the hot dog. Some Asian American woman making $125,000 a year was like, you got to go. You got to go to Costco. My parents were like...

Oh, and the chicken is actually a loss leader. It's one of the things that gets people... In the door. Riled up in the door and they lose money on it. Where's like a Walmart? Oh yeah, we love the chicken guy. We love this guy. I got to get that shirt, man.

I really got to get that shirt. The guy with the barcode, because he doesn't want them scanning the actual chicken. Well, it ruins the integrity of the chicken. Or something like that. But, yeah, other stores that do loss leaders is because they want to get you in and then like fleece you and get you to buy.

junk food and whatnot. Not Costco, man. It's just, hey, we lose money on the chicken. You're welcome. Let's do the labor. Why is it such a good place to work?

They pay 30% above the norm. They provide good health care. They've got 401K matching. They do time and a half on Sundays. And all of that is even just for hourly workers, like part-time workers. We should put, we'll put the little clips in here.

We talked to a couple of employees when we were there. I don't know if I've ever asked someone if they liked their job before and gotten such a enthusiastic yes before. Huge shout out to Andrew who recognized us from the pod

and then graciously gave us some of his time to tell us about his experience working there. Loves it. Had been trying for years?

He is... I think he's now, yeah, he's now 26 and he's been trying since he was 18 to get in and he was telling us

that people don't want to leave because they like the job and working there so much that they don't want to leave even older Costco employees.

You know, I didn't here, like literally a year. Cool. But I was a seasonal the year prior, so just grind in the cost of life. Do you plan on staying here for the long haul? Oh, yeah. Yeah, most definitely. I mean, I used to work in at, like, Little Wall's deli kind of sandwich shop before. Yeah.

So coming into here, it was a pretty big upgrade, you know? And just, they treat their employees really good. Yeah. That's what everyone says. People love working here. Yeah, I mean, it's practically impossible to get in because no one wants to leave. Oh. Whoa.

I have four years that are pretty up there in age, and they still come in and tell me they love it. So I don't see them retiring any time. I don't think I'm going to retire anytime. Yeah. I'm older. How old are you? I'm 26. Oh, okay.

So you got in. Yeah, I know. I mean, I've been applying to all the Costco's in my area since I was 18. I mean, I've been told my whole life just Costco's a good job. Yeah. So I've been trying and trying. And then when I finally got in, I was like, okay, I'm staying here. Wow.

Good for you. who are retiring millionaires and stuff. I mean, they give you a lot of good benefits. Yeah. It helps out. You got your 401k, and they, whenever they, you're putting in towards your, retirement?

Yeah. Costco matches you. Nice. So it's like a certain percentage that they match back with how much you're putting in. Yeah. So, I mean, can't go wrong with that either. Wow.

Incredible. Great deal. Do you get discount on food? No, I mean, we got a free membership, so that's kind of the discount. All right. Yeah. And the hot dog's a buck 50. I did allude to it being like a religion earlier.

And I was looking on R slash Costco or like R slash Costco employees or something. And there are, to be fair, there are people who have had a negative experience working there. But it's probably because they stink. But they're like, oh, it's like a cult. It's like a, you know, they're all about, they're just singularly focused on Costco. And it's like, well, brother. What does they want them to focus on? Yeah.

It's where you work, big dog. Yeah, look, I'm sure... I'm sure there's not a 100% satisfaction. Yeah, I mean, that would be insane. But it does seem like they do go out of their way. And Jim Senegal, especially, like, he's got all these crazy quotes. I mean, can you imagine any CEO saying some of this stuff? This is him in 2005 talking to the New York Times.

He said, having an individual... Oh, because he famously capped his own base salary at 350 grand. Wow. I forgot about that. Yeah, for over a decade. And he was publicly criticizing these wide CEO to worker pay ratios. And he said, having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong. And he says, also, it's really pretty simple.

It's good business. When you hire good people and you provide good jobs and good wages and a career, good things are going to happen. Yeah. and he talks about it how he's like, just to be clear, this is not like some philanthropic endeavor. I'm not doing this from any kind of like altruistic place. Yeah.

I think it's better for the company. Yeah. He's like, it's not from the goodness of my heart. And I'm like, he's like, I think it is, it just makes better business sense.

So I just looked it up, by the way. Costco is currently about a $414 billion dollar company. you would think that the, where's the market? Yeah, 414 billion. You would think that one of the co-founders of a $414 billion company would be worth several billion dollars, right?

Jim Senegal's net worth estimated a humble $1.2 billion. Really surprising. Yeah, that's still a shit ton of money. Still a shit, but all things considered, relative to like a tech CEO or a Walton, 1.2 billion, that is, that's a drop in the bucket relative to what he built. Hey, everybody.

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overdraft coverage, and discounts provided by Cash App, a Block Inc. brand. Visit Cash.app slash legal slash podcast for full disclosures. Yeah. That is a very fun fact. And they, so... But that ethos has paid off for them, right? They've been able to build this culture.

Okay, sure, there are some people who are a bit disgruntled by the fact that, but they have this culture where people are trying for close to a decade to get a job there and then want to hold on to it for the rest of their lives. like you said their pay rate

is so much higher than other than other retailers like that and the Sam Walton story is crazy or not Sam Walton Sam's Club they had been going through CEO after CEO

it was always a struggling business they weren't they were like let's just clone the Costco model which was you know the memberships the you could see

they tried to do the prices on the on the Delhi stuff. But they weren't doing any of the labor and operations thing. They got a new CEO in I think 2017. And they basically were trying to, he was trying to push these higher pay rates, better operational things, more creative ways to take pressure off employees. Got a lot of pushback. Finally was able to institute in 2019. Wow. And takes years. They've had massive success with that. Wow. that CEO is now the president and CEO of all of Walmart.

Wow. Yeah. That's impressive. It's... There you have it, folks. It's just... I mean, just... It's just so weird.

I mean, we... This whole show, we focus on, like, the absolute nightmare in hell we've created with this, like, particular breed of American capitalism. And it's, like, it doesn't even seem like it's good for business. Yeah. And so it's extremely frustrating to see these people, like, actually... institute things. They're like, what if we just tried treating people? Yeah. Right. By contrast, real fast, Sam Walton's net worth, the entire Walton family is worth over

$430 billion with each child's net worth succeeding $100 billion. But yeah, the, the, treating your employees well means it's better for the company. They have three times more profitable per labor dollar than Walmart. Less turnover of employees means you spend less on hiring, and less on training. Incidentally, it means you get less theft because you've got higher competence from your employees. Also, I would say a huge part of that,

like we said, so much of their revenue is coming from that membership fee. Yeah. That sticky retention rate they have is because it's a nice experience. Like, so many shopping experiences in this country are, I mean, dude, go into like any CVS or,

Walgreens in the... Excuse me, can you open the glass door of the deodorant, please? I need to get the odor. In the city of L.A. And you're like, this is hell. And some fucking poor hourly wage person who just wants to die. Who's overstretched, doesn't have any direction. He's probably going to, like, leave in whenever he gets the opportunity to.

But they've created this very nice experience where people are like, yeah, I would, like, renew my thing. I'm going to keep coming. It's also no frills. feel insulting. Whereas, like, CVS is like, it's covered with shit to try to get your attention to buy different garbage and the music sucks ass.

Yeah, and I mean, every interaction we had with an employee at Costco was so pleasant. Yeah. It's, I'm like, I feel so funny. Like, we're so effusive about how great it was, but it's so different than any other

store where even we felt a little funny. We were like, we're just going to film this and they were like, don't care, man. Just like, do your thing. Cool. I like working here. You're not bothering me. You're like, okay. Yeah. It's just so foreign to me. Let's talk about Kirkland Signature, shall we? I used to think that Kirkland Signature sucked. And I still kind of do just by, because I think of it as a store brand. But even in researching this brand, my opinion has changed. So the whole reason that they came up with this is because before 1995, Costco had over 30 different private labels.

They had one for toilet paper. They had one for batteries. They had one for chicken and they had one for this. And that's obviously very confusing to the customer as well as probably for employees because it's a lot to keep track of. And fun fact, they almost named Kirkland's signature Isoquois. Is that some kind of... That was the neighborhood they were moving to up in Washington. Yeah.

They were moving to Isoquo and they were like, let's call it. up, but then they decided, no, it's too hard to spell. So instead, they named it after Kirkland. No disrespect to the native populations, but... Your shit's hard to spell. I don't know. Also, something about Isoquois, doesn't... The white man can't spell.

Kirkland, on the other hand, that's... Now, that's a name that I can get behind, because I can spell it. Suburban mom... Yeah. It just sounds like what she'd have in her pantry. And that is the place that they were leaving. They were going from Kirkland to Issaquah. Never forget where you came from.

Yeah. Never forget where you came from. Their first products were multivitamins and shampoo in 1995. How about that, folks? And today it is America's number one consumer packaged goods brand with zero ad budget and no strategy, except that it's good and cheap. Psycho. Isn't that absolutely fucking psycho? Look at this.

Look at this happy family. You got the, you got the, uh, the, um, um, ambiguously gendered child and the mom, I think. Yeah. Oh, yeah, the products, the products. You got the snack mix, the bottled water. Do you think their ultimate goal is to keep making things until the entirety of Costco is just full of Kirkland? Well, let's talk about why they make things and how they do it.

Their main thing is leverage. If a big brand won't budge on the price or the specs, Costco makes it themselves. with the same or similar suppliers. They go, okay, hey, you work with us. We'll sell your shit. If you don't, we're just going to figure out how to do it ourselves, and we're going to reap all the benefits.

The products are born when their internal buying team notices a divergence between the input costs and the end product cost on shelves. So, for example, if coffee prices are dropping, but retail prices are going up, that's an opportunity for them. Hey, you're squeezing out our poor consumer. Won't somebody think of the consumers?

We will. So they find a manufacturer who can work within their parameters and their costs. And then here's a fun fact. The spec has to beat the national brand, not just match it. It's got to be better than the national brand. At Costco, the loser consumer does not... It's a winner consumer. Yeah, you're the winner consumer.

You are the winner consumer at Costco. The current CEO in an interview actually described pushing to have the Kirkland Bacon, Egg, and Cheese breakfast sandwich to have more protein than the national brand. by adding more bacon. He said, hey, the taste is good, but we can outspeck old Jimmy Dean. Speaking of the current CEO, give more bacon.

That is one thing that gives a bit of caution. I do think the Jim Senegal days are over. It's not like he's, he's not going as crazy as some of these other CEOs, but I do think his total pay package is for, because I think he started in 2024, maybe 2023. I think every year it's been somewhere between like $11 and $15 million. Total with stock.

So it's not cash. Like his salary isn't, but... But a bit different than the old $350,000 days. Well, it has become a Wall Street darling. And as you become more of a darling... Oh, I mean, we didn't even talk about the... Oh, we will. If you're owning...

If you're owning Costco stock and you're an employee there, the 20-year average annual return, you know what it is? Million dollars? No, no, the percentage. Oh, uh, I'm going to say 1,400%. No, I guess. Like over a year. The average annual return each year of the past 20 years.

15%? 18 and a half percent. Fantastic. It's incredible. Yeah. When a Walmart opens up, local wages. You said Costco. Whoops.

Yeah. Yeah. You said what happens when a Walmart. When a Costco opens up, things go well. When a Walmart opens up, things go to shit. When a Walmart comes to your town, local wages are going to drop. Mom and Pop stores close. But with Costco, the opposite happens.

Local wages rise to compete. They rise up to 40% according to one study. There are some anecdotes that surrounding businesses get increased foot traffic and revenue after opening because all these hungry, hungry hippos

want to come and, hey, what's the southern bed and thaw hair? I'm wet my goal. Oh, just being in that shopping center, we were at, what was it, Wednesday? It's a Wednesday at like, I don't know, 10, 30, 11 a.m.

It's bustling. It's packed. Yeah. And so if I'm like, whatever, that Best Buy nearby, the whatever, I'd be like, this is a dream. Oh, yeah, it's nice. Members will drive further

and spend more per trip than any other big box shopper, and they import that outside spend into that local economy. And again, the limited skews, leave a gap for other stores to pick up. Walmart's got 140,000.

Costco's only got 4,000. You go there, maybe you didn't find the one thing you were looking for. Oh, you can go to the nearby grocery store, whatever the hell. You got to go get your tennis balls at the local tennis store. You got to go to the tennis

store to get the tennis balls you want. Mr. Perfect over here needs his... Mr. Perfect. He needs his Wilson's, not the pens. So they get those communities get big tax gains. The house and property values tend to go up. So a big question, Amil,

is why can't every company do this shit? Well, folks, it's complicated. The transition to doing that is tough. Imagine Target doing this model, right? Target has a time. hun of skews. They obviously make their profit in different ways. Imagine... Target's another great example. What a nightmare it is in any of those stores.

Oh, I know. Oh, my God, man. Aye, yeah, yeah. It takes a long time for the flywheel of Costco's business model to take its effect. So imagine you are the new CEO of Target and you go, okay, here's what we're going to do, guys. Hey, Wall Street, you're going to love this. We're going to slash... Hey, Wall Street. We're going to slash our margins, right? Our margins right now, pretty good.

we're going to slash them so we're barely breaking even on our shit, right? I know if that sounds good, here's what we're going to do also. We're going to increase our worker pay by 30%. Isn't that great? No? Okay, how about we offer far fewer products? Also, let's completely slash our ad budget. No CEO's going to do that. Nobody who gets in charge, put in charge of the target's going to do that because they're going to get fired before any of this shit can take effect. The stock's going to plummet. It takes time for the effects to be felt and shareholders to be rewarded. Everybody would have to take a huge haircut. You can't just, you can't just turn your business into this.

The only way it works is if you do it from scratch, man. But you can start implementing some of the stuff. I mean, like, the Sam's Club example is a perfect example of like, it's not just this, it's not just this membership model plus cheap margins on things. You have to go whole hog. do the whole thing. Dude, if they paid Walmart employees much, much better,

I feel like it would dramatically improve the Walmart experience. I know some of you guys love Walmart and I've talked shit about it. I just think of the Walmart that got built near my childhood home and just what a fucking disgusting mess it was.

I mean, every time I went there. I can't think of a, like one of these major companies where it wouldn't be a boon to them. I mean, We live in such a different time, though, now where it's like, you know, shareholder value over everything and juicing the stock by cutting labor and all that. But, I mean, even Amazon, everything that comes out about their labor force is a nightmare.

I mean, the pissing in the bottles is just like the... I'm a pissing in the bottle. You got to let me go to the bathroom. That's just like, that's just the story that comes out. I'm pretty sure, like, by far per capita, they have by far the most OSHA violations and injuries and all this shit. It's just like a nightmare there. They do not give a fuck about anybody. Now I want to sing Christine Aguilera's genie in a bottle.

If you want to employ me, baby, there's a price to pay. Gotta let me pee in the toilet and not in a damn bottle. That's pretty good. I'm a pissing in a bottle, baby. Gotta make a delivery, honey. Gotta hit those numbers, baby. Or, or I'll get fired. Hey, guys, we're gonna take one last little sweet break

to talk to you about our favorite rocket money, man. Boy, oh boy, rocket money. You know, saving money, oh, geez, it can be a hassle. But sometimes it can actually save you plenty of time, you know. I mean, we've been talking a lot about membership fees, this episode. Jeez Louise. What about the ones you don't want anymore that just pile up on the old credit card bill?

You don't even know where they're there. Some people truly don't know what they're spending. How much they're spending and what they're spending it on, right? I mean, I've been there. I've been, how many times do you open up your credit card bill or the app and you go, what is this? Does someone steal my credit card? Yeah, and then you're like, what are these things?

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where is costco today the model is not just unique to north america no sir no ma'am it works internationally you got the chinese the japanese the koreans the europeans the taiwanese all these freaks international freaks are literally lining up they want to line up it's very strange to me because i would uh it reminds me it reminds me it it

I will say, as much as I say, like, oh, I wish I had a bigger household so I could shop there because it's a nice experience. It's definitely not my favorite way to shop. I think I prefer a, I like being in New York City and having a grocery store near me at all times and just being able to pop in whenever I need to. And that feels very like European to me. Or Japan, I found it so crazy. I mean, you're just bopping around. You don't need a car everywhere you go. you just get off the train, pop into a little mart.

It sounds like... Clean. They like Costco in Japan? Yeah. But hey. Hey, Japanese people need stuff too. They need a lot of batteries, too. They also are very like space conscious.

They have all these, they've gotten very good at like small living. So I'm like, you know, I live in L.A. We have enough space, but I got home with the 30, I think I got 30 rolls because that's like the smallest money you can buy. What else can I do? Yeah, you're an animal. I literally put away like half of it. I go, where the hell do I put the right? rest of these fucking dogs.

Me, when I get the paper towels, I'm like, I got to make space for this shit. By the way, we didn't even talk about their return policy. Part of what makes their customers so satisfied is their return policy is famously incredibly lax. I don't even think you need... Almost two lax, I'd say. There's like a genre of video online where people are like...

I'm returning a 15-year-old computer chair that's falling apart from all the masturbating I've done in it. And I'm like, this isn't a flex. You're a bad guy. You're doing a bad thing. Yeah. You're taking advantage. You're taking advantage of their goodwill.

Have shame. Yeah. Like, you wore that thing into the ground. It's like you could literally, you know, just break something and happen. I've seen a video with a woman bringing a full couch and she's got the sectional on the, on the big massive carts they can give you. I had this for 10 years and it's no good anymore. Take it back. Honestly, how do you look the person in the eye going like, nah, it's just not doing it for me anymore?

I think you don't. I think you go, you look at your shoes and you go, it's just not doing it for me anymore. They also sell a bunch of weird shit Like we said, they sell Caskets, which is fun. Wedding dresses? Who's buying their wedding dress from Costco? Dude, come on, man.

Why? I haven't taken a peek at their bright old section, but... You can buy cruise packages, generators, shipping containers, gas, Yeah, they got gas stations, they got pharmacies. That's the biggest stuff for me. Pharmacy stuff, I've gotten my... I've gotten my eyeglass.

prescription there. Prescription, yeah. I've gotten my, not gotten. I always do my contacts through them because it's, I think just by buying my contacts through them, it pays for the, the money I save is, it pays for the membership fee. If I only get my contacts in the year, I've made my money back on my Costco membership. And then if I rent a car through them, you ever rent a car through Costco? I mean, I'm going international.

I need to rent a car, but I don't think I can do it. international car rental through Costco. You should check. Yeah, I guess. I've saved probably hundreds. Wow. Sometimes you'll look at the classic, you know, you'll just go to Enterprise,

whatever, kayak, whatever, price line. You're like, this is, Jesus. Car rental is so expensive. It's insane. Costco. Costco. You can crash the car and return it

and be like, eh, it didn't work. It actually didn't work for me. It crashed. You gave me one that crashed. You gave me one. So here's some fun facts about them going public. They went public December 5th, 1985 at $10 a share. If you invested a humble $1,000 back then,

it would be worth $140,000 today over double the market's performance over the last four decades. So if you just parked it in the S&P, you're doing half as good, baby. Half as good. If you max that out, yeah, there it goes, wow. Wow, wow, wow. Uh, yeah, over 9,773%.

Why don't I just put my money in fucking Costco? I know, man. What a jackass. Even since 2000, they outperformed the S&P by over four times. They tend to beat the market on the way up when the market's going up, and they lose less when the market drops. So it's kind of a, a bulwark. Bullwark, whart. Wart.

Boat. Bull wart? Don't you're lying to me. they've also raised their dividend every year for 21 years, which alone pays out 13 times some investors' initial cost basis. So imagine your initial cost basis is, you know, 5 grand, whatever it is. And that annual dividend is now paying over 13 times that amount for some lucky investors. Mama Mia.

Charlie Munger's ghost is among them. Charlie Munger famously loved Costco, like just an absolute horny guy. I don't blame him. So horny. Like way too horny. I don't blame him. You'd ask him about it and he'd go, oh, I love Costco.

If you're a Costco hater, come on the show. I want to know what you have to say for yourself. I don't think there exists one, honestly. TBH. A Costco hater? I don't know, man. He loved their value to customers, the way they treat employees,

and their integrity as well as their unique business model. He called himself a total addict and never sold a share. But somehow I imagine he never went to Costco and shot. I'm just picturing, I'm like thinking about all the products in Costco, and I'm just thinking about Charlie Munger's old-ass body. Yeah. And I'm like, I can't think of a single product that he'd be able to lift up. I love it in here. You have no idea how heavy 30 rolls of toilet paper are.

Yeah, it's heavy. It's heavy stuff, man. All the, man, the dairy, the dairy walking. Charlie Munger just fully falling, tipping over. Yeah. By the time we were done it, we didn't even go that crazy. No, we really didn't. That cart was so heavy.

Yes. Well, a lot of it was the Diet Coke. But that's what it was? And the yogurt. So the products were buying? I mean, what do you mean? Yeah, but. Oh, you guys are going to love it.

I bought caviar. I bought wine and I ate it in the food court. I got a shit ton of yogurt. And pocky. Oh my God. I've already eaten so much fucking pocky, man. The big ass half gallon Joe. of Reese's pieces?

Damn, I should have had you bring it, Luke. Oh, I was eating some of this morning. I bet you were this morning, you pig. I just grab handfuls everyone. Yeah. Oh, God, I love Reese's pieces. Remember when you guys tried to trick me that the different colors were different flavors?

You lied to me. The brown ones are chocolate. Yeah. The yellow ones are piss. So what is the bear case on Costco? Very little, as it turns out. Will people's, Will younger people's habits be the same as their boomer parents as e-commerce grows?

I think so. It's an enjoyable experience going on there. There's also a danger, you know, with the CEO taking a bit more money. I'm like, if there's a, I would say this, if I was Costco, I would never promote another CEO who didn't work his way up. I would agree with that. In fact, I would submit that to every company. Get the MBAs out of here. Truly. Fuck them.

Kill them. Round them up. You're not going to get any complaints for me. There's no reason. I want the guy who's literally worked at every level of this company knows what the company needs and is not just like, I found if we could just, you know, if we paid the employees less. Yeah. What were you saying? Actually, we're boosting employee pay.

Yeah. Good. I uncock it. And it's not just the pay. I can't stress like the way they talk about the operational things they've employed where they take stress off of the employees. That's massive. It's also trust. They've got huge trust not only between management and workers, but between the company itself and their members.

And that is a risk, I guess, going forward is whether or not that trust can be maintained. I think so. I mean, they've done a great job so far, but like you said, it's whether or not the person or people in power can do right by the culture that has meticulously been cultivated over the last 40 years. There's a good, there's a good, like, Disney movie where the, or it's like Billy Madison, where they're trying to pick the new CEO for Costco. And it's some sniveling Wharton School of Business. And it ends with a- We gotta charge more for that hot. It ends with like a forklift race competition

and they're like, we knew you had this stuff. Yeah. You're hired kid. You're hired. Hey, fucko. They should make a Costco movie. The Costco movie. They did a fucking hot Cheetos movie for Christ's sake. Which wasn't bad.

Do you saw it? I saw part of it. Yeah. It wasn't bad. Hey, Mexican guy, you got the stuff. That's some spicy stuff. white people are going to love it. Mexican people are going to love it even more. And yeah, they, man, I don't think anybody can touch what they've built. This moat that Costco built and dug out took decades.

They treat their workers well. They cap their own greed. They obsess over customer trust. You can't just start doing it. It's got to be part of the company's foundation. It's got to be in the bedrock. Yeah, that's, you got to, you got to follow their North Star on this one. Did you see, there was that viral tweet that was like, there was that viral tweet that was like,

how come there's not just a business anymore that just does a good thing, makes its money and doesn't turn into an absolute hell? You've got very few. And I was like, Costco is a pretty good example for what this person is talking about. Costco, in and out? I don't know that much about it now, but... In and out, the quality is... It has not changed.

I don't care. I know they're religious. What the fuck ever, man. I didn't know they were religious, but... Yeah, they got a Bible quote on the inside of the bottom of the cups. So what, dude? Let them do it. They're not...

Literally, let them cook. As long as they're not poisoning me. You could argue that they are, but... And I... They maybe pay the employees pretty decently? Oh, yeah. Managers at... In-N-E-N-E-E-Lead.

make like well over six figures. What? Oh yeah, dude. Wow. In and out owner refuses to move Bible verses despite backlash. Yeah, it's part of the fucking company. I don't care, man. Just don't look. Yeah. Who cares? Quit flipping the dang thing over. It's not, it's probably like, what is the quote? Let's look it up. Proverbs. They're all on the bottom. It's like, stop flipping it over. Proverbs are in and out Bible quotes. What are they anyway? Okay, John 316. For God, so loved the world.

He gave his own lonely begotten son, whatever. Proverbs 3.5 is on the milkshake cups. Trust in the Lord that he will give you a sick milkshake. Trust in the Lord with all your heart. That one's fine. Burger rappers has Revelation 320. Behold, I stand at the door and knock, okay?

They should slip in the weirder runs. Interesting. They've got a lot. Huh. For the right, for though the, a righteous, I'll do TikTok voice for this. For though a righteous man, false seven times.

And then it goes on. He gets back up. I don't give a shit. Yeah, he gets back up. The righteous man. The righteous burger eater. What other companies are good? Let's ask Google.

There's not that many examples. What are some good companies like Costco and internet? Wow, other people have already asked exactly that. Trader Joe's is an example of a decent, I think they've gone downhill. Sure. But high employee satisfaction for that. Okay.

Wegmans, apparently. Raising Keynes, I guess. REI. REI is a good one. Anyway, let's see how much in-and-out workers make. How much does in-and-out pay its workers? $20 per hour in California.

Wow. Yeah. Interesting. Shift leads in supervisors can make over 160K. Okay. That's more than I had thought. Let's see. All right, folks.

Well, I think that that's probably a good place to wrap it up, don't you think? If you really want to see the full Costco experience, Ben andamielshod.com. Benadamielshow.com. We're going to put the whole thing. I'm going to put the whole thing. I imagine the world have been some clips. I imagine there will have been some clips.

I mean, all I can do is imagine because it's going to take some movie magic. Let's play a little bit. There's one. There's us. I like how every clip I'm just making the worst face. Look at those pickles, man. God, I got three different kinds of pickles. Those Korean-inspired ones are so good.

I kept calling you, honey. No, sweetheart. Look at that. Look at the egg whites. Oh, we went into the freezing-ass dairy cooler. The whole thing was nuts. I buy those egg whites, but this time I didn't eat any of them. So I've just been slowly going bad in my fridge.

Terrible. I'm a bad person. You're a bad person. We need to shame you. Let's, uh, we're going to go into the bonus. Holding back his knees. Ben and Emile Show.com. Hey, so leave a comment also if you like Costco and what your favorite product is.

And thanks for tuning in, everybody. Coming up on this week's episode of Ben and Emile Show.com. Foot off the gas. Room. Foot off the gas. And I always sat in the way back of her fucking Ford Expedition in the high up third row seat. And I just always felt so ill.

Ugh. Yeah, this is one of the, like, when people talk about building the trains and stuff, one of my biggest things is I'm like, I just don't think everybody's meant to drive. No. Like, you get in some people's cars and you're like, Who taught you, dude?

What? I had the, God bless him, I had this old Chinese guy about a month ago. Can we look up scary facts about orcas? I got to see what the... I've got some for you, pal. They literally, they eat the livers of sharks, only the livers of sharks, and leave the rest of the carcass. Must taste great. Apparently it scares sharks so much that they've depopulated from some areas.

Cool, good. They've fully been like, you know what? South Africa's one, whether they're... like, you know what? It's the fucking whales territory. This is South Africa. They also... This is South Africa. I'm in Oka.

They don't know why, but they were wearing salmon hats for a while. What? How? One of the whales started doing it, and then the whole pod started doing it, and then a nearby pod started doing it. How do they wear... What, do they puncture a hole in it?

How do you wear a salmon hat? They find them with their... These salmon's just on their head. That's cool. That's not weird. That's cool. That's very strange. I don't like it.

That is very fashion. Maybe orcas are UFOs. You go home and you're kind of freaked out about how important they are. I didn't have that experience. Oh my God. The world really does run on plankton. Oh my God. The world runs on plankton.

We really stumped Google here. Without plankton? Without plank. A hundred thousand different species of plankton. That would make sense to me. They're literally. Yeah, but they're nothing. Why do you need?

If they're tiny, why do you? It's like rice. How many different types of rice do you need? It's rice. You'd be surprised. How many different types of rice is there? Can we Google that? How many? I'm going to say there's...

I would say there's probably not anywhere near 100,000. I'm going to say 200 different types of rice. But... Get the fuck out of here.