Rejected Programs: failure to DELIVER

Costco may reject your program if you are unable to deliver on what you promise. Often, this literally means delivering product to the warehouses, depots, or the member’s home – depending on your agreement. If you are incapable of fulfilling orders or delivering product on time, then we cannot stress enough how important it is to be upfront and honest. Better yet, find a fulfillment center or a solution so you CAN deliver.

How do you know whether or not you will need assistance delivering your product? Luckily, VendorCo can help you better understand what is likely to be required from you. There are several avenues to Costco placement, and we can provide you with your options and the structure of each. This information can be invaluable in getting your product in front of the right buyers for your company.

If you are interested in getting more information about the different avenues of Costco and the requirements for each, VendorCo offers all companies the opportunity to speak with one of our executive account managers through the purchase of a telephone consulting session. Better yet, partner with VendorCo to receive free consultation services as a standard piece to your service. Check out our services page to find the best option for your company.

What Not to Do: Pull Out of an Approved Costco Program

VendorCo created an innovative program for Costco that involved the sale of artificial turf. Our Executive Account Managers contacted a reputable artificial turf company to fulfill the program, and it was quickly approved by Costco. Because there was no preceding product like it, the expected return rate was unknown, and the vendor grew fearful of Costco’s return guarantee. VendorCo recognized that a new product carried enormous potential, and strongly advocated for follow through with the program. However, against the direction of VendorCo, the company informed Costco that they would no longer be moving forward with the program. Still, the Costco buyers believed in the program that VendorCo created, and they were able to source out another company that was willing to adhere to Costco’s return policy. Within the first year, the program sold over 2 million dollars worth of product. Unfortunately for VendorCo’s client, they lost a potential relationship with Costco due to fear, and the revenue that could have been theirs ended up in the hands of a competitor.

What NOT to do? Never pull out of a Costco program, unless you are sure that your company cannot handle the account. However, if your company is unable to handle the account, you should never waste the time of Costco buyers by even presenting it until you are. At VendorCo, we screen our clients for Costco readiness, and we are happy to tell you our opinion on whether or not your company is ready for Costco. If you are an established company that is willing to serve Costco and its members, contact VendorCo today and we can help you position your product for maximized potential.

What NOT to do: Underestimate Costco’s Demographic

An energy drink company was able to secure regional sales at Costco’s warehouses. After performing a sales analysis of their current distribution, which was largely to C-Stores, the company found that diet energy drinks were 30% of their sales volume, while regular energy drinks were 70% of sales volume. The company chose to base their Costco test on this sales data, providing 70% regular and 30% diet energy drinks to Costco. However, the company failed to take into account Costco’s demographic data provided to them, and they experienced a lack of inventory for diet drinks, and a surplus of regular energy drinks. Due to this miscalculation, the test failed.

What NOT to do with Costco? Never underestimate Costco’s demographic. It is extremely important to be cognizant of who you will see your product on Costco’s sales floor. VendorCo can help your company avoid costly miscalculations like this that can result in a failed test, as well as damage to your reputation and relationships with the buyers. Find out if your product qualifies as a Costco ready item, and contact VendorCo today for expert representation.

Step Six: Revise and Implement Your Action Plan

In step six you will revisit your action plan established from step four. Use the information and advice that you received from your consultation in step five and revise your plan accordingly. This may result in minor or major changes, depending on the advice that you receive.

Then, move forward with your action plan! After receiving third party assistance, this should be fairly straight forward. If you feel uneasy or unsure, purchase a consultation from VendorCo.

Step Five: Consult with a Third Party

This step is highly recommended, especially if you are expanding your retail placement. All retailers have unique requirements, processes, and procedures and you should always be knowledgeable before approaching each avenue. Some trial and error is to be expected; however, you should not be completely blind.

We recommend seeking retail experts that specialize in a particular field to consult with. If you are interested in Costco placement, VendorCo offers one-on-one consultation sessions. Visit: for more information.

Step Three: Make short and long term goals

After compiling your lists, you may see areas that need attention or improvement, or you may see that your marketing and retail are right on track and you simply wish to expand. The point of this is to track and compare these two important business plans. If you have trouble comparing these lists, we strongly consider consulting with an expert (VendorCo offers one-on-one telephone consultations, see:

Use your findings to develop short and long term goals. Consider where you want to be by the end of the year, the next 5 years, and the next 10 years – or any breakdown of your choosing. Make several goals for each time period, including both sales and retail goals in dollars and locations. If you’re feeling ambitious, step outside of the marketing/sales department and consider long/short term goals for human resources, operations, etc.

Step Two: Evaluate your Marketing Plan

In this step, develop a list of your current marketing strategies. Similar to your retail chart, include information such as impressions, targeted demographic data, and any other pertinent information related to your marketing plan.

Once you have both charts completed, compare them next to one another. Is the data consistent? Is the demographic you are targeting in your marketing plan reflected in your retail sales? Start asking these types of questions to better prepare for step 3: making short and long term goals (see next blog).

Step One: Evaluate your current retail

This step is fairly straightforward. If you are not already tracking your retail stores and comparing and contrasting sales information, now is the time to start. Large companies often have staff dedicated solely to tracking this information, but for smaller companies it is often taken for granted.

Simply make a chart including your current retailers and any other information you believe is appropriate. You may consider including dollars of merchandise sold, units of merchandise sold, retail demographic, etc. etc.

Using this chart, begin to think about what areas of retail are more or less successful for your business, and consider why this might be. Ask yourself questions about the data that you are collecting and if this data is consistent with your target demographic. This information will come in handy in Step two: evaluate your marketing plan (see next blog).

Website Mistakes

  1. Amateur Websites – the cost of a professional LOOKING website is almost mandatory, and worth the cost if you plan on selling to retail.
  2. Mismatching Emails Addresses – Be sure your email address matches your website. For example, our website is consistent with our email addresses. You should not have a yahoo, hotmail, Gmail, etc. business email address if you expect to sell to retail.
  3. Poor Image Quality – hiring a professional photographer to photograph your products can be beneficial. At the very least, have a graphic design expert edit your photos to ensure high quality, clear images that are web appropriate.
  4. Slow Loading Web Pages – we live in a fast paced world! How often do we get frustrated waiting for a website and simply give up on it? Images that are too high in resolution will take too much time to load. Additionally, keep the flash player to a minimum, or provide an option for no flash. Consumers and buyers alike appreciate when information is available quickly.
  5. Spelling/Grammar Errors – Simple mistakes may be damaging to the overall feel of your company and website. Proofread your text multiple times, and by multiple personnel.

Website Tips

  1. What is your website focus?

    This may seem obvious, but your website is one of the best ways to introduce your company to your customers AND retailers. Keep in mind that your internet audience encompasses more than just consumers!

  2. Are your products selling online?

    Having a company store on your website creates a starting point for your retail business. Be sure to set-up a company store, or refer to online retailers currently selling your product.

  3. How is your SEO?

    Are consumers and retailers able to find your website easily? Consider partnering with a website marketing expert to help reach your desired audience.

  4. Are you taking advantage of Social Media?

    Social media is becoming one of the best ways to reach young audiences. Be sure that you are taking advantage of this opportunity!

  5. Are you taking advantage of mobile networking?

    Is your website “smart phone compatible”? Be sure that your website is keeping up with this shift in technology.

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Amazon Book: 15 Elements of Successful Product Placement

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