Final answer:
The incorrect statement about warehouse clubs is that they sell a vast, unlimited selection of miscellaneous items at a deep discount. In reality, they sell a limited selection of items and use membership fees, along with low-cost operating methods, to offer savings.
Step-by-step explanation:
The question asks us to identify the incorrect statement about warehouse clubs. Among the statements provided, the incorrect one is that they sell a vast, unlimited selection of miscellaneous items at a deep discount. Warehouse clubs typically sell a limited selection of items to maintain lower costs and operate efficiently.
They do sell a range of brand-name grocery items, appliances, and clothing, but the selection is curated and limited compared to a traditional retail store.
Warehouse clubs charge an annual membership fee and operate from large, low-cost facilities to keep expenses down. These factors, along with bulk purchasing, contribute to low gross margins because they pass on the savings to the members.
This business model is similar to how Amazon operates its online retail platform, leveraging economies of scale from its highly computerized warehouses in low-rent locations worldwide.
The incorrect statement about warehouse clubs is that they sell a vast, unlimited selection of miscellaneous items at a deep discount. Warehouse clubs actually sell a limited selection of brand-name grocery items, appliances, and clothing.
They operate out of enormous, low-cost facilities and charge patrons an annual membership fee.