Category: Uncategorized

Costco Miscellaneous Program Costs

By vendorco

This month we will be delving into the various costs, allowances, and discounts to consider before starting a program with Costco. Calculating your price is paramount to the success or fail of your product. A price that is too low may undercut your margin and result in a loss, while a price that is too high may be entirely overlooked by the buyers.

Before quoting to Costco, consider these costs that can pop-up in most programs:

  • Costco Advertising Fees
  • Costco Return Fees
  • Costco EDI Fees
  • Costco Retainer Fees
  • Costco Allowances
  • Costco Discounts / Markdowns
  • Building in these miscellaneous fees will allow you to obtain a practical margin and be successful long-term.

It is critical to secure a well-rounded cost structure before a program starts with Costco. To help ensure that you will be successful in this venture, contact [email protected] for more details about how our services will best serve you.

Pricing

By vendorco

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 [email protected].

Training Options

By vendorco

As we mentioned in our previous post, you as the seller have the option to enlist your own employees, or hire a third party company for staffing. It is recommended that your employees do not go into Costco with cold feet and no know-how. This can be easy to ensure when you are using your own staffers – but what about Costco’s third party companies?

Luckily, the designated third-party staffing companies used by Costco for demonstrations do allow you to train and educate their staff. Like any sales team you may encounter, some employees will shine above the rest, but overall, the team members are seasoned and dedicated to sell your product while on the warehouse floor.

Want to learn more about this process? Partnering with a third-party representative like VendorCo will allow you to have advanced knowledge regarding all aspects of Costco sales, including the best way to ensure adequate training of your demo staffers. To partner with VendorCo, contact us today at [email protected].

Demo Staffing

By vendorco

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 [email protected].

Non-Food Demos

By vendorco

Not all of Costco’s demonstrations are related to food products. In fact, there are several non-food items that can be demonstrated at Costco Warehouses as well. These stations would be set-up in alignment with the appropriate department you are selling to. Non-Food items demonstrations are a different approach than food items. Unlike food items, customers will not always have the “hands-on” approach and instant gratification to sample. Because of this, not all non-foods items would benefit from a demonstration, and those that do should be navigated carefully.

If you have a non-foods product and you are unsure whether a demo would be the best fit for you, then you may benefit from expert Costco representation through VendorCo. We become an extension of your sales team and help you make the best decisions for your company. To get started or for more information, contact us today at [email protected].

Food Demos

By vendorco

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 [email protected].

Costco Advertising: In-store Options

By vendorco

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 949-326-8909 or via e-mail at [email protected].

ABOUT COSTCO DEMOS

By vendorco

The formulation of Costco demos did not start until 5 years after the company’s establishment in 1983. These demonstrations were instituted as a way to promote relatively unknown products in Costco’s early stages of development, and over the years have experienced incredible success and popularity amongst Costco members.

Demos are designed to to enroll Costco members by increasing brand awareness and informing members of product attributes and benefits. Most importantly, these demonstrations allow the customers to experience the products for themselves. Many vendors associate Costco demos with food items only; however, the opportunity exists for both food and non-foods items. In fact, non-foods demonstrations are typically even more elaborate than non-foods.

Planning a Costco program with Costco Demos can be taxing. it’s important to consider Costco demonstrations are different from in-line, national programs. Sampling your company’s product in Costco warehouses can be beneficial, but not every seller will be successful in the process. 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 [email protected].

Costco Demos

By vendorco

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 [email protected].

Costco Regional Sales: More Information

By vendorco

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 [email protected].

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