Sol Price Part VI: "We Were Losing Our Butts"
The idea was a winner--so, how well did it work? Great--except for one "detail."
A few months after opening, they were, in the words of the man who ought to know, "losing their butts."
The problem might have been any of a dozen things, but proved to be one of the last they suspected. There just weren't enough small businesses ready to try the new approach.
Once they found the problem, the solution was surprisingly simple: They just expanded membership judiciously, by creating a second tier of membership. People who didn't own small businesses could now join by paying a smaller fee, and in return receive a slightly lower discount on items they bought.
Expanded membership turned the trick---by the end of the next year Price Clubs were roaring, and they haven't stopped yet. Sales for 1991 neared $7 billion.
The average discount store sells annually about $175 worth of merchandise per square foot of floor space. The average office products superstore does about $300. And the average Price Club does $1,000 a square foot--and in much larger buildings. You get a quatum leap like that only with a truly new concept.
Excerpted from
The Great American Idea Book: How to Make Money from Your Ideas for Movies, Music, Books, Inventions, Businesses and Almost Anything Else!
Authors: Bob Coleman & Deborah Neville
Publisher: WW Norton
Copyright: 1993; 1995
All Rights Reserved
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