Costco Membership: Demographic

Did you know that 85% of Costco members are from upper income groups? In fact, more than 50% of Costco shoppers are from households with two to four people. Statistics also show about 70% percent of female wholesale shoppers are under the age of 55. These figures indicated the type of demographic segmentation Costco falls into.

This type of information can be valuable for manufacturers. What type of products would sell best to this member base? Costco has gained a reputation and is well regarded by prestigious consumer-goods makers. When Costco first started, well known brands such as Levi’s and Cuisinart would refuse to sell to Costco because of their misconception that it would degrade their reputation. Now, big brand names compete for the coveted and limited space on Costco’s sales floors.

If you think your product would sell at Costco, pair up with one of our representative to develop your strategy today! Call us at 949-600-7688 or email help@vendorco.com.

Costco Membership: Added Benefits

The operating philosophy of Costco is simple: keep costs down as much as possible and pass the savings onto its members. Since Costco has such a large membership base and immense buying power, members ultimately get the best possible prices. Costco is able to keep markups low due to making most of their earnings on membership fees.

A key selling point of Costco is its private label brands, such as Kirkland Signature which was launched in 1995. These private brands are comparable in quality and will always cost less than brand labels, it is no surprise that these brands generate 20% of total revenue.

If you think your product would sell at Costco, pair up with one of our representative to develop your strategy today! Call us at 949-600-7688 or email help@vendorco.com.

Reading Price Codes

In all retail establishments, items found on the sales floor will be accompanied by a price sign. Costco signs include the same basic information: a description, an internal identification number, a price, and supportive details about the item. However, Costco signage can often give away secret clues that can add to a shopper’s experience, but may be easily overlooked if you don’t know how to identify them.

Important to note, prices typically ending in “.97″ have been marked down. Other non-standard prices — such as items ending in .49, .79, .89 — are a sign that this is a special deal from the manufacturer. Sometimes there will be an asterisk (*) on the upper right-hand of the price tag, this indicates Costco does not have plans to re-order that product once the stock is sold out, so it’s important to move fast!

It is important to understand how Costco establishes pricing among vendors. If you are interested in submitting your product into Costco, it is vital to calculate all of the costs associated to your product. Contact one of our experts at info@vendorco.com for more details about how our services best serve you.

Costco In-Store Sales Opportunities

Costco has over 400 warehouses in the US alone, and orders are often placed by the truck load. Including potential reorders, it is easy to see that in-store sales opportunities can be greatly advantageous to potential vendors.

It is important for Costco hopefuls to understand that not all products selected for in-store placement will be on the sales floor all year round. Costco is well known for having a “treasure hunt” atmosphere, and members understand that products on the sales floor are constantly being circulated in and out. This is why it is extremely important to have a sales plan that keeps your products on the floor at all times.

For expert representatives that can help you sell your product to buyers and develop a plan for successful Costco sales, contact VendorCo at help@vendorco.com.

Inside Costco Warehouses: Costco Signs

In all retail establishments, items found on the sales floor will be accompanied by a price sign. Costco signs include the same basic information: a description, an internal identification number, a price, and supportive details about the item. However, Costco signage can often give away secret clues that can add to a shopper’s experience, but may be easily overlooked if you don’t know how to identify them.

Important to note, prices typically ending in “.97″ have been marked down. Other non-standard prices — such as items ending in .49, .79, .89 — are a sign that this is a special deal from the manufacturer. Sometimes there will be an asterisk (*) on the upper right-hand of the price tag, this indicates Costco does not have plans to re-order that product once the stock is sold out, so it’s important to move fast!

It is important for vendors to understand how Costco establishes pricing. If you are interested in submitting your product into Costco, it is vital to calculate all of the costs associated with your product. Contact one of our experts at info@vendorco.com for more details about how we can best serve you.

Inside Costco Warehouses: Item Numbers

When shopping at Costco, you will notice a code that is listed above the item name. Item numbers can be up to 7 digits in length. This code, or item number, identifies the specific item, size, color, etc. and is used by the warehouse, buying staff, vendor, and the member to identify the item and for categorization purposes. Early in Costco’s history when the warehouse had not yet merged with Price Club, it offered a different style of numbering system. You would hear employees unloading a cart and yelling out the digits to the cashier, who would key in the item number into the system.

Today, Costco’s system has evolved with technology, but some of these original items numbers are still visible when you buy milk, some tobacco items, and eggs. Costco uses item numbers as a tracking number associated with UPC codes. It is the UPC codes that have sped up the Costco process.

Costco categorizes their products differently than other retail stores, it is important to learn how Costco uses item numbers and other techniques to identify their products. If you are interested in partnering with a manufacturer representative, and starting out your Costco program precisely, then contact VendorCo today at sales@vendorco.com.

Pricing

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 help@vendorco.com.

Costco Demos

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 costcodemos@vendorco.com.

Costco Regional Sales Test

Costco purchases are often made by the Truck Load. Even regional items can be purchased as full trucks, depending on the product and the pallet loads. If a product is not successful, a full truck load purchase can result in a huge surplus of inventory which is costly to the vendor and to Costco. In order to protect the vendor and limit liability, Costco will often perform a sales test before launching a full roll out.

The structure of a regional test will be very similar to that of a national program, with the exception of the geographic breadth and units purchased. Product will be sent to a small percentage of stores covering a diverse geographic areas in order to determine if and where a product will see the most success. This allows the buyers to see if sales are strong in one area over another, so they can order accordingly during a full roll out.

Will a regional test be required for your product? How many units will be purchased and to how many warehouses will the product be distributed? These questions and more can be explained by a knowledgeable Costco expert. At VendorCo, we have over 10 years of Costco specific experience that lends us the ability to prepare our clients for the worst, so they can achieve the best results. To partner with VendorCo, contact us today at regionalsales@vendorco.com.

Costco Regional Sales: Benefits

Regional sales can be ideal, depending on your company needs and goals. The benefits of regional sales include the possibility to focus on a small production run. Especially for companies that are new to club/big box sales, regional sales will allow you to create and test packaging and sales. Additionally, there are 9 regions and 9 regional buyers regional sales allows you 9 chances to hear a “yes”. With national sales, you only have one chance to impress, while regional sales provide 9 opportunities for a buyer to take a chance with your item.

To discuss more of the benefits of regional sales and to help determine if this is the right avenue for your company, choose VendorCo as your manufacturer representative. We will walk you through the process and provide you with the necessary information to make the best decisions for your company. Get started by contacted us today at regionalsales@vendorco.com.