Understanding Costco Membership

In 1988, Robert Price, President of Price Club said, “We thought of it as a speak-easy. We tried to create a mystique.” At that time, the idea that you could charge people to shop was unimaginable and originally limited to businesses and members of select groups. However, Costco has created a business model that other retailers have since followed.

This month we will discuss Costco Membership, and shed light on the groundbreaking business model that no other retailer has quite been able to match. Included this month will be the following topics:

  • Gold Star Memberships
  • Business Memberships
  • Executive Cardholders
  • Rates and Retention
  • Added Benefits
  • Demographic
  • More Reasons to be a Member

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 949-326-8909 or email [email protected].

Inside Costco’s Corporate Office

Costco has multiple regional offices with the national headquarters located in Issaquah, Washington. Originally, Costco’s corporate offices were stationed in Kirkland, WA. You may recognize Costco’s Private Label Brand name as Kirkland Signature, a way of paying homage to the origins of this retail powerhouse.

Former CEO, Jim Sinegal, was a native Californian but found Costco’s home in Washington, where Costco is now a household name. In fact, the city of Issaquah recently signed a 30 year agreement with Costco allowing them to expand its headquarters.

To learn more about Costco from our Executive Account Manager, who has experience working in their national headquarters, call us at 949-326-8909 or email [email protected].

Costco Retainer Fees

One of the main concerns vendors have when starting business with Costco is related to the release of payment. Like any contract, when you partner with Costco you will negotiate payment terms; however, your terms will not necessarily guarantee the release of full payment. Consideration for end of program costs must be taken into account, and Costco will either require or provide the option of holding a retainer for some of these funds.

With Costco’s “Treasure Hunt” atmosphere, items are constantly moving in and out, and exit strategies must be planned appropriately. There are costs to consider with the end of a program, including potential markdowns, discounts, or other adjustments, shipping of returned product on a guaranteed sale, and of course, returns that may continue to come through after the product has been moved off the sales floor. A retainer provides the option for Costco to hold some of the Purchase Order funds to account for these costs. Although it may not seem ideal, retainers benefit and provide assurance to both the vendor and Costco. The vendor would otherwise be required to send a check each and every time the balance falls below zero – that would mean sending a check for each and every return, which could be an accounting and labor nightmare.

A knowledgeable manufacturer representative like VendorCo can help you plan your exit strategies appropriately, including an appropriate and reasonable plan for end of program costs. To set a strong foundation on your product’s prices, contact [email protected] for more details about how our services will best serve you.


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].


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].

Inside Costco Warehouses: Paper or Plastic?

“Paper or Plastic?” is not something you will hear at Costco checkout line. More often than not you will be asked “Box or No Box”. Costco received thousands of boxed products which creates a box overage. Instead of throwing these boxes away, Costco protects our environment by using these boxes in place of shopping bags. Besides, how else can paper or plastic bags store large packaged products that can hold the 40lb bag of dog food or a 10 pack of baby wipes?  The box offers a sturdy solution for the shopper and a great outlet for Costco to reduce is box inventory each day.

If you are a supplier preparing to work with Costco or is looking to begin the process, VendorCo can help.  Call us at 949-326-8909 or email [email protected].

Costco Special Event

Costco Special Events are often referred to as Costco Road Shows. Either term adequately describes the nature of a special event, which is to display product in the stores for a limited time. Special Events immensely contribute to the treasure hunt atmosphere of Costco, and members know these products do not last long.

There are many advantages, as well as disadvantages to participating in a Costco Road Show. Ultimately, it is important to understand that Special Events are very different from in-line, national sales programs. For more information about Costco Road Shows/ Special Events, VendorCo offers an informative webinar that is sure to address your most pertinent questions. The webinar concludes with a question and answer session, where the webinar coordinator will happily answer any questions specific to your product or company.

To purchase a webinar, visit our services page at www.vendorco.com/book

Costco Road Shows: A Complete Guide Webinar – $10 OFF LIMITED TIME OFFER

Formerly $89.95, for a limited time only we are offering this invaluable service for $79.95

Road Shows (also known as Special Events) are an invaluable service to companies who…

  • are unclear about the difference between Road Show, regional, national, and test placements
  • need advice about the right way to pitch their product to the Road Show staff
  • are moving forward with a Costco Road Show and are not sure how to go about set-up, tear down, etc.
  • are simply interested in getting more information about Costco Road Shows

Included in your webinar purchase is an opportunity for a question and answer session. During this time, we are happy to answer any questions that are specific to your company or product. Worried about other attendees listening in on proprietary information? We are happy to answer questions via e-mail or on a secure line after the conclusion of the webinar.

Use Discount Code: RSweb10 to save $10 off your webinar.

We Are Proud To Have Worked With

Amazon Book: 15 Elements of Successful Product Placement

Contact Us

Phone : 949-326-8909
Email : [email protected]