Home Depot and Costco

Homes aren't going away. Amazon ain't selling joint compound or lumber. Unless you are Lowes, it will be difficult for smaller home improvement retailers to match the pricing. When was the last time someone went to Home Depot and walked away with one item? Contractors make up a large % of revenue for HD. The return policy is great, the prices are some of the lowest, and the amount of products they offer makes it the best place for homeowners and contractors.

Costco's retention rate is always near 90%. Many people who are price sensitive might see the higher upfront cost as an issue but the savings are better than anywhere else. Costco has the ability to negotiate goods at a far lower price because having your product in Costco is a goldmine. When was the last time you saw a Costco ad? It doesn't happen. People know and trust Costco.

Look at the businessess Amazon has been able to destroy. COVID was a retail killer but Home Depot and Costco grew at a high rate. Great prices, great customer service, and very few competitors of scale.