Costco Chickens, Making Money From ๐Ÿ’ฉ, Fractional Assistants

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Today's Outline:

  • Losing $40M from selling chickens

  • Fractional Assistants

  • Porta Potty Rental Companies

  • 3 Thought Provoking Reads

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๐Ÿ” Costco Loses Millions on Chickens

Costco is an incredible business.

They do an outstanding 234.39B every year in sales. ๐Ÿ˜ณ

Membership fees (ranging from $60-$120/year) increased 9% to $4.2 billion in 2022.

The incredible part about Costco is that if they didn't have their membership fees, they'd actually be a pretty poor business.

The chart above shows how much profit is coming from their membership fee.

Business Lesson: Craft pricing towards peoples willingness to pay. Everyone wants lower grocery prices. People don't mind paying $60-$120 to get there.

It's similar to Amazon prime. $139 per year for a membership to avoid $7-9 shipping fees adding up 12 months out of the year.

Activewear brand Fabletics sells a membership plan that allows them to sell high-quality low cost athletic wear.

All of this to say, Costco knows their business model well. They could probably be making an extra $30-$40M/year in profit off of their rotisserie chickens alone.

But they realize they're in the subscription revenue business. Not simply the grocery business.

๐Ÿค Fractional Assistants

Alright, I think this business would work well.

For the average entrepreneur out there, we either:

  1. Don't have the need for 40 hours of assistance per week

  2. Don't know how to use a personal assistant

The second seems silly, but just like managing people is a skillset, managing ourselves is just something we do. And teaching others to think and make decisions for us is a hard skill.

Here's the idea:

Build an agency of fractionalized personal assistants.

You can have a $499 onboarding course providing business owners with SOPS on how to Book Flights, Schedule Meetings, Assist with Research, Manage Inboxes, etc.

Sell 2 packages:

  • $800/month for 20 hours/week of help

  • $500/month for 10 hours/week of help

And yes...

The domain is available (probably not for long after this send):

๐Ÿ’ฉ Porta Potties

Alright, so between walking past construction sights in NYC and attending Coachella 3 weeks ago, I haven't been able to stop thinking about these:

How Porta-Potties Work | HowStuffWorks

There is so much money in boring companies.

And with the rise of things like Artificial Intelligence & Crypto... the supply of smart operators going into Boring (and truthfully, gross) industries will drop.

And it's not a small market. It's in the billions and growing every single year.

Each unit costs between $700-1,000 with a fast payback time since the average unit rents for $90-130 per week (plus a maintenance fee to empty units weekly).

Here's the hard part: You're not very differentiated from the giants in the industry today.

Solution? Don't compete with the construction guys. Most profits are made from having dense service routes with thin margins.

I'd start with a luxury porta potty trailer and target weddings, event venues & more high end gatherings:

You can rent these guys out for a few thousand dollars per night.

PS โ€“ Great read on the Porta Potty king of NYC (who owns 18,000+ Porta Potties)

๐Ÿ“š Random Books, Podcasts & Quotes From This Week

Yellowstone Club (Podcast) โ€“ If you want to know what my bucket list item is, it would be to build something like this. Basically Disney world for the uber-rich like Bill Gates, Tom Brady, Ben Afflack and more.

Decoded (Jay Z Bio) โ€“ I've been reading this book the last 2 weeks. Honestly it's a combination of a coffee table book + a bio. But it walks through Jay Z's upbringing and how he got into becoming one of the highest earning artists of all time.

Valuable Hours (Screenshot from Zach's Ten Bullets Newsletter)

Fun Fact:

I just saw the movie Air in theatres the other week (first movie I've seen in theaters in probably 5+ years). Crazy MJ fact โ€“ NBA commissioner David Stern fined Jordan $5,000 every time he wore them in a game. Nike gladly paid the fine on Jordan's behalf because it was great marketing for the shoe.

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