How can Costco be so cheap

From zero to three billion dollars in six years.

The business model is deceptively simple. Keep costs down and pass the savings on to members. Since 1983, Costco has offered branded items to businesses and individuals at much lower member prices. It was a strategy that was duplicated but never quite achieved.

Although Costco Wholesale Corporation was founded in Seattle in 1983, its roots date back to 1976. That year the Price Club opened its first warehouse in an old aircraft hangar in San Diego. It was originally only open to businesses, but company executives soon realized that extending purchasing to individuals could gain far greater purchasing power.

How does that fit into the Costco story? Well, fast forward for a moment to 1993. That year Costco and The Price Company merged. Six years later, the company completed its restructuring and established Costco Wholesale Corporation, a Washington state company based in Issaquah. The company is traded on the NASDAQ under the symbol 'COST'.

The company is truly a Washington success story and one of our business legends with international reach. It's the first company to grow from zero to $ 3 billion so quickly. By 1993, the company had locations with annual sales of $ 206 billion. By the end of 16, Costco had grown to nearly 2015 stocks in the US and Puerto Rico, Canada, Mexico, UK, Taiwan, Korea, Japan and Australia. Today sales are near $ 700 billion and growing. The company employs around 64 people.

What's the secret of success besides $ 4.99 worth of fried chicken and $ 1.50 for a hot dog and a soda? According to the company's co-founder and director, it is the ability to keep costs down, eliminate bells and whistles like fancy buildings and vendors, keep overhead down, and maintain business and individual membership that the company can leverage for remarkable buying power.

Learn more about Costco.

And if you score, the company sells about 76 million fried chickens and 128 million hot dogs annually.