Understanding Costco Memberships: Business

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 $60.00 you can purchase the regular business member or for $120.00 you can be part of the Executive club and earn annual 2% rewards. Licensed businesses, nonprofit organizations, government agencies, farmers, and ranchers can all join as a business member. Both options include a free household card. Affiliate cardholders can be added to the Business Membership for $60.00 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 949-326-8909 or email [email protected].

Understanding Costco Memberships: Gold Star

Costco’s Gold Star membership is designed for consumers on an entry-level basis in terms of pricing and benefits. At $60.00, this membership is for individuals who do not qualify for, or do not need a business membership. It includes a free Household Card and gets you into Costco, saving money at any warehouse or online at Costco.com. This membership is suited for customers, who do not expect the return from the 2% “cash back” program.

If you are a supplier who is seeking to bring your product into a Costco warehouse or are interested in beginning the process, VendorCo can help. Call us at 949-326-8909 or email [email protected].

Costco Discounts & Markdowns

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 [email protected] for more details about how our services will best serve you.

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.

Demo Staffing

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].

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

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