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The last reason we introduce for wanting to sell to Costco is the fact that selling to Costco puts your product in front of millions of shoppers that pass through the warehouses each day. This exposure allows for high sales and high visibility for your company to Costco members, who have a reputation for being exceptionally loyal.

Clearly, there are more than 5 reasons why manufacturers want to sell to Costco, but this month we hope to introduce manufacturers to several common reasons why Costco is an optimal warehouse store to be placed in.

Another reason why manufacturers sell to Costco, and why manufacturers should sell to Costco, is the low level of competition within a warehouse. When you go to a typical retail store, there may be 10’s or 100’s of other products just like yours. For example, customers at a typical grocery or retail store have an overwhelming number of toothpaste and toothbrush brands to choose from. However, in Costco warehouses, they limit their product brands to a small handful, typically one or two, giving your product a much higher chance of being purchased by the members. It is not hard to see why many manufacturers find that being one of few product brands in the top U.S. wholesale chain is a premium place to be.

Another reason why manufacturers sell to Costco is because of Costco’s ordering structure. In the United States there are hundreds of Costco warehouses, each of which requires at least one pallet of product and plenty of back stock – whether it is held in the warehouse or the depot centers. Given this structure, Costco often orders products based on truck load quantities. The high quantity of product orders is extremely attractive to manufacturers because it obviously yields high dollar amounts per purchase order.

A second reason why manufacturers strive to get into the Costco warehouses is the fact that it is a membership based retail avenue with high loyalty and a high-end demographic. Costco’s retention is around 86-87% from year-to-year, which means that Costco shoppers see enough of a value to keep them coming back year after year. Even through economic downturns and membership price increases, Costco members continue to renew their memberships. There is certainly a value to having your products displayed to a segment of loyal Costco members, with higher annual incomes than the average shopper.

A second reason why manufacturers strive to get into the Costco warehouses is the fact that it is a membership based retail avenue with high loyalty and a high-end demographic. Costco’s retention is around 86-87% from year-to-year, which means that Costco shoppers see enough of a value to keep them coming back year after year. Even through economic downturns and membership price increases, Costco members continue to renew their memberships. There is certainly a value to having your products displayed to a segment of loyal Costco members, with higher annual incomes than the average shopper.

May blogs will be dedicated to talking about Costco Wholesale, its growth, and 4 of the top reasons why manufacturers would want to sell to Costco:

5/8/2012 – Costco Facts

5/15/2012 – Warehouses opening soon

5/17/2012 – Reason 1: Why manufacturers sell to Costco

5/22/2012 – Reason 2: Why manufacturers sell to Costco

5/24/2012 – Reason 3: Why manufacturers sell to Costco

5/29/2012 – Reason 4: Why manufacturers sell to Costco

5/31/2012 – Reason 5: Why manufacturers sell to Costco 

Stay tuned!