J Sainsbury plc has warned that the conflict in the Middle East will impact both our customers and our business, raising the prospect of lower profits this year as geopolitical pressure feeds through into household budgets and supply chains.
"Transportation costs are a big factor there. Every company that is involved and has logistics and they have to pay for gas, either they have to absorb this cost, or they will charge the third party that will provide this service. I'm not surprised this is happening, because at some point, Amazon will say we cannot absorb all this cost."
Costco sells its products with very little markup, choosing instead to make most of its money from membership sales. This business model makes sense: The better deals it has, the more likely people are to want a membership. Memberships at Costco are booming. In the fiscal first quarter of 2026, overall memberships were up 5% year over year to 146 million. And its higher-priced executive memberships were up a stronger 9%.
When you work in the operating world, you are in the weeds of your business. For example, at SoFi I knew all the nuances of different types of student loan forbearance programs and at Brex I knew the minutiae of the Mastercard transaction chargeback rules. This contrasts with my experience as a private equity investor where I look at purchasing a business ranging from a chain of laundromats to Ancestry.com within the same month.
Markup is how much you add to your cost to get your selling price. If something costs $10 and you sell it for $15 , you added $5. That's a 50 percent markup on your cost. Where people get confused is that markup isn't the same as margin, even though the terms get used interchangeably all the time. Margin measures profit as a percentage of the selling price, and markup measures it based on your costs. Same dollar, different percentages.