Link: http://www.canada.com/theprovince/news/story.html?id=93a45c97-122e-4917-9c38-1a0df3b2bed6
Summary:
As of today, common wholesalers, such as Costco, released a marketing technique of high discount rates. Realizing that customers will visit places where they could purchase goods for a cheap price, they initiate this technique to create more revenues, despite the high discount percentage. Because all, if not most, wholesales receive their goods from manufacturers, their price of their goods when purchased must be significantly lower than the regular prices they sell to us and other retailers. Through calculations, they choose to decrease their price to increase the number of sales, maximizing their profit, indeed. "Every time a wealthy person goes into Costco, there's something there that attracts their attention" - Taylor said.
Connections:
Relating to Chapter 12 of our textbook, the concept of cash discount has an entire section introducing two new accounts called “Discounts Allowed and Discounts Earned”. Due to the recent economical decline, Costco should increase their terms of sale. To put it differently, they should allow their customers, especially retailers to receive a greater discount within an extended period of time. With some common sense and critical thinking, their accounting department should increase their ‘Discounts Allowed’ account to further maximize its prosperity as a wholesaler. Understanding this concept, this is the reason why so many people choose to purchase their goods in large supplies from different wholesalers.
Personal Reflection:
Being a long-term fan of Costco, we visit there at least once a month to stock up and purchase anything that is “cheap.” In my opinion, the idea of discounts surely favours both customers and the company itself. In other words, the company receives its popularity from the public and retailers, while customers could get any desired goods for a low price, conveniently. On the down side, I extremely detest the idea of membership in Costco. Since we need to be a member to receive those amazing discounts, we must purchase its membership card on a yearly basis. In the company’s point of view, this can be an awesome marketing idea to keep their customers from leaving because this regulation indirectly forces customers to visit Costco often. But in my eyes, the cost of the membership card is a “rip-off” and the price we pay for those awesome discounts.
- A. Tao
Block A
Wednesday, October 29, 2008
Wednesday, October 8, 2008
Chapter 11 Blog : Lululemon
Link: http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=1cd360a2-2b53-419f-a3bd-8aa6ec0df39e
Summary:
Currently, Lululemon Athletica is one of the most profitable cooperation in Canada. This well-known retailer emphasizes on yoga-inspired apparel for healthy living, which is commonly accepted by most females. As the prosperity of the corporation grows, it plans to add thirty-five stores in the next three to five years. This action will hopefully increase its popularity for its target market for females. As you all may know, the convenience for females to find their desired clothes wherever they go proves another type of popularity amongst the public. Lastly, this company is willing to spend most of its gross profit opening stores, proving its desire to attain popularity. As a result, its revenue has risen by 48%, proving a significant success in its profitability. “We create components for people to live longer, healthier, more fun lives” - Lululemon Athletica.
Connections:
As stated in the summary article, Lululemon Athletica has proven to be an extremely accepted brand throughout the last decade. In addition, one of the reasons why it makes such a large gross profit, other than its popularity, is its low cost of goods sold. Since it has a high revenue and a declining COGS, it further increases its gross profit, making it amazingly successful. In relation to our studies of Accounting 12, Lululemon is a very good example of a retailer, in fact. Furthermore, it purchases its clothes from their unique wholesaler and manufacturers and markets them to the public. Also, the concept of Cost of Goods Sold is a major portion of theory in chapter 11 and it is the high Cost of Goods Sold that gives Lululemon its thriving prosperity.
Personal Reflection:
As an average teenage male, Lululemon Athletica surely is not one of my desired stores. Hence, I do not understand its popularity and its significant growth in acceptance and popularity for females. As surveyed around my female classmates, the popularity of this brand comes from its marketed theme of comfort. Indeed, it is the technical clothing for yoga, dancing, running and other sweaty pursuits. Despite its expensive cost in my opinion, this appears to be commonly accepted everywhere. In school, many of my female fellow classmates and students possess clothes and handbags of this kind. In my environment, this brand currently marks our teenage definition of fashion and “in style”. Even though I personally do not favour anything from the cooperation, I must admit that it is doing an excellent job in attracting our modern female market.
- A.Tao
Block A
Summary:
Currently, Lululemon Athletica is one of the most profitable cooperation in Canada. This well-known retailer emphasizes on yoga-inspired apparel for healthy living, which is commonly accepted by most females. As the prosperity of the corporation grows, it plans to add thirty-five stores in the next three to five years. This action will hopefully increase its popularity for its target market for females. As you all may know, the convenience for females to find their desired clothes wherever they go proves another type of popularity amongst the public. Lastly, this company is willing to spend most of its gross profit opening stores, proving its desire to attain popularity. As a result, its revenue has risen by 48%, proving a significant success in its profitability. “We create components for people to live longer, healthier, more fun lives” - Lululemon Athletica.
Connections:
As stated in the summary article, Lululemon Athletica has proven to be an extremely accepted brand throughout the last decade. In addition, one of the reasons why it makes such a large gross profit, other than its popularity, is its low cost of goods sold. Since it has a high revenue and a declining COGS, it further increases its gross profit, making it amazingly successful. In relation to our studies of Accounting 12, Lululemon is a very good example of a retailer, in fact. Furthermore, it purchases its clothes from their unique wholesaler and manufacturers and markets them to the public. Also, the concept of Cost of Goods Sold is a major portion of theory in chapter 11 and it is the high Cost of Goods Sold that gives Lululemon its thriving prosperity.
Personal Reflection:
As an average teenage male, Lululemon Athletica surely is not one of my desired stores. Hence, I do not understand its popularity and its significant growth in acceptance and popularity for females. As surveyed around my female classmates, the popularity of this brand comes from its marketed theme of comfort. Indeed, it is the technical clothing for yoga, dancing, running and other sweaty pursuits. Despite its expensive cost in my opinion, this appears to be commonly accepted everywhere. In school, many of my female fellow classmates and students possess clothes and handbags of this kind. In my environment, this brand currently marks our teenage definition of fashion and “in style”. Even though I personally do not favour anything from the cooperation, I must admit that it is doing an excellent job in attracting our modern female market.
- A.Tao
Block A
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