Price Club founder, Sol Price, dies

Posted Dec 15th 2009 4:00PM by Tom Taulli
Filed under: Wal-Mart (WMT), Costco Wholesale (COST), Small Business

A visionary in the hyper-competitive retail industry, Sol Price saw a huge opportunity -- in the mid 1970s -- to create a bulk discount chain with a membership fee model. It was the Price Club. By the early 1990s, the company merged with Costco Wholesale Corporation (COST), becoming a powerhouse in the discount market.

Unfortunately, Price died this week. He was 93.

Interestingly enough, Price started his career as a lawyer (he graduated from the University of Southern California). It was a great way to learn about the intricacies of different businesses. For example, one of his clients was Seven Seas Locker Club, which had a bulk-retail model for sailors during World War II.

Using this as a foundation, Price created Fed-Mart. He focused on conservative retail practices and cost cutting (by using warehouses as the store). Growth was particularly strong, especially in the southwest.

However, by 1976, Price was kicked out of Fed-Mart (from its new owner). Even though he was 60 at the time, he believed he could create another powerhouse. Yes, he founded the Price Club, which also grew tremendously through the 1980s.

And even when Price sold his company to Costco, his entrepreneurial life was not over. He took control of PriceSmart (PSMT).

As a sign of Price's impact, there were many retail entrepreneurs who mimicked his strategies, even Wal-Mart Stores, Inc.'s (WMT) founder, Sam Walton. In his biography, he even admitted that he got some of his best ideas from Price.

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook. His website is at Taulli.com.

Tags: PriceSmart, shopping, Sol Price, SolPrice, wholesale

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Reader Comments (Page 1 of 1)

12-16-2009 @ 4:22AM

Barry said...

I was fortunate to have worked for Sol Price in the Price Club Chain. I worked as a pharmacist, and once I even sumarily threw Robert Price, his son who walked behind the counter where he did not belong, out of the pharmacy. He was amused, and later I was also. Sol in particular was a great man and I learned many long lasting things from him which I still apply to my own businesses. Sol was a genious in marketing and he also did a lot of good for the communities he had his stores in. God bless you Sol!