Locate (Company) Cost

In the analysis of a wholesale or retail company's approach to managing functional costs, this term refers to the cost of finding and acquiring a site and constructing the building to hold the company's products.
(See also Functional Costs)

Example 1:

First Nationwide has been installing mini-branches in K-Marts.
(Year 1987-SIC 6021)

Explanation: First Nationwide is making small investments in already constructed buildings, reducing its Locate Cost.

Example 2:

To respond to the growth of Toys R Us, Toys Plus goes to small markets like Wichita Falls, TX and opens 12,500 sq. ft. stores (about 1/4 of the space of Toys R Us).
(Year 1985-SIC 5945)

Explanation: Toys Plus locates its stores in less expensive areas in order to compete with category killer, Toys R US. This reduces its Locate Costs.

Example 3:

In August of 2000, the CEO of Toys R Us helped negotiate one of the industry's boldest deals, a partnership between toysrus.com and Amazon.com, which should make the Toys R Us site profitable more quickly than it would be on its own. Amazon provides warehousing, order fulfillment, and site design. In exchange, it got warrants to purchase 5% of toysrus.com, as well as up-front cash payments and a share of the site's sales.
(Year 2000-SIC 5945)

Explanation: The partnership between toysrus.com and Amazon.com was part of the Locate Cost for Toys R Us.

Example 4:

To make that experienced-based formula work, the experience has to reflect the brand. The Sam Ash music store in Ontario Mills offers shoppers their own in-store performance space and the instruments to use in it.
(Year 1999-SIC 5999)

Explanation: The expenditures Sam Ash makes to create the performance space and the instruments to use in it are part of its Locate Costs.

Example 5:

Perhaps the most ambitious program yet is Simon Live Media, a co-venture between Simon Property Group and Time Warner's Turner Broadcasting System Inc. It aims to merge the experience of retail and e-tail through a network of kiosks
(Year 1999-SIC 5999)

Explanation: The money this co-venture spends on its network of kiosks is part of its Locate Costs.