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Understanding Costco Memberships: Business

Susan Walker - Wednesday, December 23, 2015

A step above the Gold Star Membership is Costco’s Business Member option. Business identification is required when applying for this kind of Costco membership. For $55.00 you can purchase the regular business member, or for $110.00 you can be part of the Executive club and earn rewards. Licensed businesses, nonprofit organizations, government agencies, farmers, and ranchers can all join as a business member. It includes a card for your spouse and additional membership cards cost $35.00 each.

Prices are subject to change and may vary by region, check your local warehouse for exact cost. If you are a supplier who is seeking to bring your product into a Costco warehouse or is interested to begin the process, VendorCo can help.  Call us at 949-600-7688 or email help@vendorco.com.



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.

Inside Costco Warehouses

Susan Walker - Tuesday, September 29, 2015

Costco is the world’s largest membership warehouse chain, with over 72 million members. Costco may have competition, but their warehouses are unique in multiple ways.  For example, Costco takes pride in their “Treasure Hunt” strategy to keep members engaged.  This means that products offered at Costco continuously change to keep the shopping experience new and exciting.

Other successful business strategies include samples station, as no other retailer has been able to engage consumers quite the way that Costco does with these samples. Additionally, massive depots that distribute goods to the chain’s warehouses across the United States has been monumental to Costco’s success. This month, we will delve inside Costco Warehouse for a look into the unique aspects of their sales floor strategies.

In the coming weeks, we will cover the following topics:

  • Inside Costco Warehouses: Item Numbers

  • Inside Costco Warehouses: Costco Signs

  • Inside Costco’s Corporate Office: Issaquah

  • Inside Costco Warehouses: Paper or Plastic?

  • Inside Costco Warehouses: The Treasure Hunt

  • Inside Costco Warehouses: Reading Price Codes

  • Inside Costco Warehouses: More Information

If you are interested in bringing your product into the world’s largest member warehouse, contact info@vendorco.com. Our staff has 25 years worth of Costco experience and an in-depth knowledge of their culture.

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 Allowances

Susan Walker - Thursday, September 17, 2015

Costco Allowances are an agreed upon percentage held from payment to settle any freight, demo, spoils, advertising, or other fees that may occur throughout the duration of a program. Allowances ensure that the vendor will not be burdened with an overbearing debit, thus protecting the vendor in the end. Allowance arrangements vary per item, department and Costco avenue and include considerations for shipping terms, payment terms, duration of the program, guarantee vs. full sale, geographical scope, etc. Some allowances pull from the full PO amount, while others (such as New Warehouse Allowances) only apply to the applicable units.

Many allowances are optional, but some may be required. With the flow of Costco’s buying process, if an allowance is required it may not be announced until after you have submitted pricing. It can be difficult to anticipate which allowances will be asked for. You clearly do not want to underestimate allowances, but you also do not want to build too much in that you overprice your item.

It is vital that allowance costs be factored appropriately into the price of your potential product. To successfully plan your price point and consider all possible allowances, partner with VendorCo – experts in Costco sales. Contact help@vendorco.com for more details about how our services 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.

Costco Demos

Susan Walker - Monday, August 03, 2015

One of the best ways to introduce new products into Costco Warehouses is through Demos.  Demos are one of the most popular attractions that Costco has created, especially for foods items. This month, we will be probing into Demos, specifically the process of how Costco chooses to put products to demonstrate based on the geography and often based on company size.


To be discussed this month will be the following topics:

  • About Demos

  • Food Demos

  • Non-Food Demos

  • Demo Staffing

  • Demo Training

  • Demo Pricing

  • More Information


Visit our blog throughout this month for more information concerning the titles above. If you’re interested in having your product demonstrated at Costco warehouses and would like an expert Costco Representative to assist, contact us today at costcodemos@vendorco.com.



Costco Shipping E-commerce

Susan Walker - Friday, May 22, 2015

E-commerce shipping at Costco may or may not deviate from processes that you currently have in place. It is just as important to understand the online shipping options as it is to understand in store. To further complicate the process, Costco is pushing for combined buys of many of these items. This means that the in-store and .com buyers work together to make their buying decisions. This process varies depending on the department and item, especially if it is a bid item.


You should know before presenting your item to Costco if it could potentially fall into this category. The pricing structure and process is very different from independently purchased items. Work with a representative to help you with the process. Email us at help@vendorco.com.

Costco.com - Additional Sales Opportunities

Susan Walker - Friday, August 23, 2013

One thing all can agree on is how effective and appreciated Costco samples are. +Costco samples may even be the driving force for a member’s visit to their local warehouse. It may seem as though nothing could match this appeal on Costco.com, but you may be surprised.

Costco.com also offers a sampling program that is designed mostly for non-foods items. Much like in-store sampling, there is a fee to be included in the program which includes prime positioning on Costco.com’s site. Additionally, you have the opportunity to opt in to marketing opportunities that will boost your products presence on Costco.com and visibility to the Costco.com member. (more details are available for our clients and Costco vendors).

In addition to the sampling program, Costco.com also offers the freedom to pitch your product in a way that cannot be done in the warehouse through website descriptive text, images, and videos. If your item is chosen for placement, you have the freedom to develop your website text and include images and video at no additional charge, and with buyer approval. This provides the opportunity to inform Costco members about your product, and to sway “on the fence” consumers to add-to-cart.

If you are interested in Costco.com sales, contact VendorCo today at help@vendorco.com or (949) 600-7688

Costco.com Advertising Opportunities

Susan Walker - Tuesday, August 20, 2013

One of Costco’s most popular advertising options is the Costco Connection magazine, which is mailed to over 8 million Executive and Business Member homes, and is also available online for free download. While the Costco Connection is available for in-store items, there is an exclusive Costco.com insert which displays a limited number of items that are exclusive to Costco.com.

Additional Costco.com advertising opportunities include the Costco.com mailer, multi-vendor mailer, e-mail campaigns, new product category featured page, home page placement, themed landing pages, and display advertisements. All of these advertising options are targeted to reach Costco’s best members, and the reasonable prices may surprise you! More details, including demographic data and pricing, are available to our clients and Costco.com vendors.

The above mentioned paid advertising options are not the only way for Costco vendors to excel on Costco.com. Additional sales opportunities are also available, and you can read all about them on our next blog.


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