Costco is not only Charlie Munger’s favorite company of all time (plus he’s on the board, natch), it’s an absolutely fascinating study in how seemingly opposite characteristics can combine to create incredible company value. For instance: Costco has the cheapest prices of any major retailer in America — and also the wealthiest customer base. They pay their hourly workers 30% above the industry norm (and give them excellent healthcare + 401k benefits) — and are almost 3x more profitable on labor than Walmart. Speaking of Walmart, Costco stocks 40x fewer SKUs than their Bentonville-based rivals — yet sells an average of 15x more volume of each. And oh yeah, practically all of Costco’s C-Suite started their careers as baggers and checkout clerks! Tune in for a mind-bending exploration of one of the world’s most iconic — and iconically unique — companies.Links:The Science of HittingWarren Buffett’s Costco jokeEpisode sourcesCarve Outs:Tifosi sunglassesDwells “take off everything”Jeremy Giffon on Invest Like the BestDogpatchDavid Lidsky’s great piece on Acquired in Fast CompanySponsors:Anrok: https://bit.ly/anrokacquiredStatsig: https://bit.ly/acquiredstatsig24Anthropic: https://bit.ly/acqclaudeMore Acquired!:Get email updates with hints on next episode and follow-ups from recent episodesJoin the SlackSubscribe to ACQ2Merch Store!© Copyright 2015-2025 ACQ, LLCNote: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.
Full Episode
I don't think I have ever been more in love with a company and a business model. What are you, Charlie Munger? It's just the deeper you dig, the more good things you find. And usually it's the exact opposite of that. It's like the opposite of being an early stage venture capitalist.
Welcome to Season 13, Episode 2 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.
I'm David Rosenthal.
And we are your hosts. What if I told you that there was one place where you could get all these things under one roof? A two and a half pound container of cashews, prescription eyeglasses, a tank of gas, new tires for your car, 96 rolls of toilet paper, a new refrigerator, an outdoor shed, a 10 carat diamond ring, some fresh prepared sushi, fine wine at a great price.
And you could even grab a hot dog with a soda and a free refill on your way out for just a buck 50. Ben, I don't believe you. Hey, it has been the same price for 40 years now?
47 years.
Yes. Most of you are very familiar with this Disneyland of consumer value that I'm referring to. It is Costco. This company seems very simple on the face of it. If you sell in bulk, you have the opportunity to offer great deals to your customers.
But what really makes it work are the 50 clever innovations that they've refined over the years that all work together like an orchestra that's been rehearsing for decades. Nothing about Costco is an accident, from the extra-wide parking spaces to the whole rotisserie chickens.
And if your goal is to offer extremely great value to your customers on high-quality products at the lowest possible prices, there are a lot of ways that you could go about doing that. And today, we will walk through the very specific path of decisions and trade-offs that Costco has chosen to accomplish just this. So listeners, remember that.
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