Fedco, every mention
32 scenes · ← back to Fedco
tap a year for its mentions
every year anyone David Rosenthal 27Ben Gilbert 4Charlie Munger 1
Verbatim, from the transcripts: the passages where Fedco comes up
Charlie Munger (Audio) · Acquired
- ▶ 9:07 David Rosenthal Was this in the FedCo days?
- ▶ 9:09 Charlie Munger He was no longer with FedCo.
Costco (Audio) · Acquired
- ▶ 6:25 David Rosenthal And Price Club is really, of course, the actual result of Sol's previous company, FedMart, which FedMart itself really came out of, FedCo, in the 19 forties.
- ▶ 15:38 David Rosenthal Operating out of Los Angeles called Fedco.
- ▶ 15:42 David Rosenthal And you're like, Fedco?
- ▶ 15:43 David Rosenthal What is a Fedco?
- ▶ 15:45 Ben Gilbert It's also like, okay, how are they doing so much volume?
- ▶ 15:50 David Rosenthal Well, Fedco, it turns out, was a non-profit membership club.
- ▶ 15:57 David Rosenthal It was a customer collective, and it was called Fedco because it was only open to federal employees, primarily
- ▶ 16:33 David Rosenthal They charged a membership fee.
- ▶ 16:36 David Rosenthal They charged dues to join.
- ▶ 16:38 David Rosenthal But unlike Costco today, they didn't really make any money on the memberships.
- ▶ 16:43 David Rosenthal Remember, they're a non-profit.
- ▶ 16:45 David Rosenthal So the cost was five dollars one time for a lifetime Fedco membership.
- ▶ 17:13 David Rosenthal That's exactly what FedCo is.
- ▶ 17:16 David Rosenthal So, as you can imagine, Fedco becomes quite popular amongst government employees in the LA area, and then not just the LA area, people start driving from all over Southern California, including San Diego, sometimes up to, like, hundreds of…
- ▶ 17:42 Ben Gilbert But Fedco's a non-profit.
- ▶ 17:43 Ben Gilbert They're not looking to, like, expand and build this huge empire.
- ▶ 17:48 David Rosenthal So Saul and the jewelry guys, they see what's happening with all of the wholesale business that they're sending to Fedco up in LA.
- ▶ 17:58 David Rosenthal And they're like, man, we gotta find a way to open a Fedco here in San Diego.
- ▶ 18:21 David Rosenthal oh yeah, we could totally recreate Fedco in this building right here in San Diego.
- ▶ 18:34 David Rosenthal I'm going to clone Fedco.
- ▶ 18:45 David Rosenthal He calls up the Fedco board of directors in LA and he says, Hey, we want to partner with you guys.
- ▶ 18:53 David Rosenthal We think that a Fedco would do great in San Diego.
- ▶ 19:05 David Rosenthal Fedco, though, like you said, they're a nonprofit.
- ▶ 20:34 David Rosenthal And they're like, well, basically this is a clone of Fedco, but we can't use that name, and it's kind of a bad name anyway.
- ▶ 21:57 David Rosenthal And on the one hand, FedMart is obviously a clone of FedCo.
- ▶ 22:41 David Rosenthal I think they maybe took the lifetime membership price down to two dollars, so they undercut FedCo or something like that, but obviously it's not about the membership.
- ▶ 24:42 David Rosenthal Clearly, Fedco had proved the model in LA.
- ▶ 47:46 David Rosenthal They're like, we can actually go back to that original FedCo membership idea, and instead of having it just be like a way to skirt around the law,
- ▶ 1:08:19 David Rosenthal This is just like the Fedco, FedMart days, and Saul and the Price Club management team think about it, and they make the very poor decision to say no.
- ▶ 1:10:55 Ben Gilbert There is a straight line through from Fedco to FedMart, or let's even just start it at FedMart since it's all the same people through to Costco today.