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Costco Membership: Demographic

Susan Walker - Monday, November 30, 2015

Did you know that 85% of Costco members are from upper income groups? In fact, more than 50% of Costco shoppers are from households with two to four people. Statistics also show about 70% percent of female wholesale shoppers are under the age of 55. These figures indicated the type of demographic segmentation Costco falls into.

This type of information can be valuable for manufacturers. What type of products would sell best to this member base? Costco has gained a reputation and is well regarded by prestigious consumer-goods makers. When Costco first started, well known brands such as Levi’s and Cuisinart would refuse to sell to Costco because of their misconception that it would degrade their reputation. Now, big brand names compete for the coveted and limited space on Costco’s sales floors.

If you think your product would sell at Costco, pair up with one of our representative
to develop your strategy today! Call us at 949-600-7688 or email help@vendorco.com.

Costco Discounts & Markdowns

Susan Walker - Wednesday, September 23, 2015

The price of your product can fluctuate as your program evolves with Costco depending on some key factors. It is not uncommon for Costco to envisage a request to take markdowns on your product. Costco has an unparalleled reputation of generating high warehouse turnover. On average, a warehouse will have inventory turned over 14 times a year. Costco may ask for a discount for a promotional push, or in order to achieve higher volume sales and quicker turnover. Factoring in this foreseeable cost will help you build a safety net when these markdown requests eventually come.

To help ensure that you will be successful in this venture, contact sales@vendorco.com for more details about how our services will best serve you.


Costco EDI Fees

Susan Walker - Friday, September 11, 2015

If you are interested in becoming a vendor at Costco, it is required that you use an Electronic Data Interchange (EDI) system prior to the start of sales. EDI systems are popular amongst retailers, and it is how Costco organizes and disseminates information concerning their complex logistical and ordering procedures. EDI systems allow two parties to electronically exchange documents without the use of email, fax or mail. For Costco’s purposes, these documents may include purchase orders, invoices, shipping notices, bill of ladings, and more.

This communication service can be pricey, and must be compliant with Costco’s requirements. Costco utilizes two EDI service companies for in-store or online ordering. If you are already set-up with EDI for other retailers, do not assume that you are prepared for Costco. There may be costs associated with set up, regardless of your current capabilities.

If you are interested in partnering with a manufacturer representative, and starting out your Costco program right, then contact VendorCo today at sales@vendorco.com. We will ensure you are fully informed of the EDI requirements, pricing, and procedures to get the most out of your program.

More Information

Susan Walker - Thursday, August 27, 2015

Costco demonstrations are a thing that members look forward to when visiting the warehouse. It’s important that your demonstrations objective it to convince the member to put your item in their cart. This task can be difficult to achieve among those who choose to participate. While there will be thousands of members who intend on trying your product, how do you make the right calls to action? Each customer has only a few seconds to hear the conveyed message about your products attributes and benefits in order to be persuaded.


To help ensure that you will be successful in this venture, consider partnering with an expert representative company like VendorCo. We specialize in helping vendors get the most out of their Costco program, including strategizing for a successful Demo. Contact sales@vendorco.com for more details about how our services will best serve you.


Pricing

Susan Walker - Monday, August 24, 2015

Pricing for demos and staffing is determined based on the options you choose, and whether the demonstration is regular/combo event or a split events. Each event includes 6.5 hours of labor and requires standard fees for supplies and product. If you are using your own employees, you may want to consider sending at least 2 employees at a time, to ensure compliance with labor laws and allow the staffers to take breaks. The price is the same for both the food and non-food items, and all demos are subjected to tax; however, if you choose to demonstrate your product during the warehouses grand opening days, prices are subject to more than double the standard rate.  Additionally, you may experience advertising fees through Costco directly, again, depending on the option that you select.


With fees being so variable, it can be difficult to plan for the right amount of demonstrations, without undercutting your price point. This is where an expert representative like VendorCo can add immense value to your program. We can help train and coach you to make all the right decisions when it comes to your Costco program. If you want to partner with experts to help you make the right decisions, you can contact VendorCo at help@vendorco.com.

Demo Staffing

Susan Walker - Wednesday, August 19, 2015

As a vendor, you can choose whether or not to enlist a third party for in-house demonstrations. There are many points to consider when making this decision, including location, pricing, training, and staff availability. Costco has 2 third-party companies that they recommend, both of which will abide by and adhere to all of Costco policies and standards. Additionally, all staff members will be food safety certified. If you choose to elect a third party for demo staffing, you will be charged an hourly fee by the designated company. Often, using third-party staffers is the more convenient, but more costly choice. The best choice can vary based on your company's specific goals.


Need help deciding which staffing option is right for you? VendorCo helps coach all of our partners through the arduous decision making process that will arise throughout your Costco program. If you want to partner with experts to help you make the right decisions, contact VendorCo at sales@vendorco.com.


Food Demos

Susan Walker - Tuesday, August 11, 2015

We can likely all agree that it’s difficult (if not impossible) to visit a Costco Warehouse without indulging in the many food samples on display. The Costco shopping experience simply would not be complete without trying a handful of choices. So it’s easy to see how a food demonstration can be a critical element to introducing your product to the Costco shopper. Not only do Costco food demonstrations allow members to taste their food products, but they provide insight about how to prepare the item. In this way, Costco Demos can be a great way to not only introduce your product, but educate the member as well.


As a seller, it is critical to make the step from sampling your product into having customers purchase your food items. With 25 years of Costco sales experience, VendorCo can help you make the most out of your Costco food demo. For more information, or to get started today, contact us as costcodemos@vendorco.com.


Costco Regional Sales: More Information

Susan Walker - Friday, June 26, 2015

The regional sales process, like all of Costco’s internal workings, can be complicated for new vendors to understand. There is no manual to help potential vendors navigate Costco’s buying processes. The time, energy, and resources that companies expend to research Costco will only pale in comparison to first hand experience. Trial and error is not the way to go with Costco. You often have one chance to prove your product/company success, and it’s important to make the most of it.


With over 25 years of Costco experience, VendorCo’s sales representatives are experts in Costco’s procedures, and sensitive to the needs of companies small, medium, and large. We are passionate about making sure our partners are fully informed of all options, benefits, risks, etc. Having an inside source can help your company make a clear decision of how to proceed, without having to guess.


For more information about Costco regional sales, consider partnering with a manufacturer representative like VendorCo. Our knowledgeable and experienced representatives will lead your company through the complex Costco channels. We provide you with the tools to obtain the ultimate level of Costco success. Contact us today to get started at regionalsales@vendorco.com.

Costco Regional Sales: Risks

Susan Walker - Friday, June 19, 2015

Some of the risks of regional sales are fairly obvious, even with just a basic knowledge of the buying structure. Clearly, regional sales will produce purchase orders in a smaller amount than national sales. Lower quantity production runs can be more costly than national programs, potentially lowering your margin. Additionally, you are limited to a smaller geographic area and a smaller number of warehouses. This challenges your marketing potential as well. Not all members will be aware of your product, and not all members will have the opportunity to purchase your product.


It is important to fully comprehend the regional buying and sales process in order to assess the risks and make a determination for your company. Other than experiencing the process first hand, a manufacturer representatives account can be the next best thing. Our partners learn from our experience and benefit as a result. To learn more, or to speak with a knowledgeable Costco representative, contact us today at regionalsales@vendorco.com.

Costco Advertising: In-store Options

Susan Walker - Thursday, August 07, 2014

Advertising options to Costco vendors vary depending on the avenue through which a product is selling. If an item is selling in-store, certain Costco.com advertising opportunities would not be available, and vice versa.

If you have ever walked into a Costco Warehouse, you understand that the layout is vastly different from typical retail stores. There are few to no flashy signs, extravagant displays, wall hangings, etc. (with the exception of Road Shows). Instead, all products seem to have a very uniform, clean look. The absence of extravagant features, drawing the members’ eye to specific products, means all products have an equal chance at developing and maintaining successful sales. However, there are opportunities available to increase the visibility of your product in the warehouse, and thus increasing the sales potential.

Opportunities typically include highlighting a product through strategic placement. This may include end caps, front of the store placement, or on Costco’s cages. Of course, there is a cost to these options.

If you are a potential Costco vendor looking for more information about Costco in-store advertising options, contact a VendorCo Account Manager today at (866) 365-3925 or via e-mail at help@vendorco.com.



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