Palmers Limited Case Study

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------------------------------------------------- PALMER LIMITED When you ask an average American about a wholesale dealer, one name stands out, Costco Wholessale Corp. They are one of the biggest wholesale corporation in US. That is very impressive considering they have only been in the industry for about 30 years. They are member based and provide quality goods and services to member only. Their members not just every day people but people who run small business so not only customers buy their product but sell them to others in their own stores as well. While their competitor, Wal-Mart, looks to provide lowest price but inlike Costco’s they overlook the quality. While BJ tries to look pretty to their customer, Costco pay less…show more content…
Costco’s CEO, Jim Sinegal, quoted, “Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members”.2 They stored the inventory on racks above the items being sold in the warehouse. That reduced their labor cost and saved them a lot time on handling and stocking. They treat their manager as enterpeneur and allows them to decide what item should be sold in their store. They odered most of the inventory directly from the manufactures. It either came directly to the store or went to their distribution center called crossdocking depots. The point of these deposts were to reduce the transportation cost by making sure all truck are full when they come the store. As an investor I wouldn’t would want to invest in a company that has a good reputation, consistanly growing, good sistainable growth, and good future plans. Let 's talk about sustainable growth rate, which basically means that a firm can grow while keeping its profitability and financial policies unchanged. Sustainable growth model allows us to segregate reasons or changes that have led as a company to substantial growth so at the same time we can segregate the causes for those
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