Home Features Mastermind Videos About Advertise Blog Network Contact
   

Have A Suggestion?
Toronto Salsa Classes / Toronto Salsa Lessons Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
Have A Suggestion?

Featured Ebook


ebook Famous Entrepreneurs - Modern Empire Builders


Featured Ebook

More Evan Carmichael
Have A Suggestion?

Sales Lessons From Starbucks And Dell

Ask the Expert Getting into Costco Wholesale



Ask the Expert Getting into Costco Wholesale
   

Entrepreneur Question:

I have a great product for Costco. I've had one meeting but it hasn't resulted in anything. What did I miss?

Sarah:

Good question. Without knowing the specifics, it’s hard for me to answer that question. Sometimes its all about the product line that is being offered, Costco’s specific policies and plain ‘ol timing. But, since Costco headquarters is right in my back yard, I’ve worked with them for a variety of years and seen many a great product and service partnership turn up goods on the store floor room. So I’m going to share 5 insights I’ve gleaned from first hand experience:

1. Costco makes the majority of its money from the member fees, not margin on products. So a value proposition touting the value of all the ‘revenue to be made’ typically falls on deaf ears. Costco’s value proposition is to deliver inexpensive goods to the consumer. They only stray from this in one area of the store: see below.

2. Costco LOVES to try out new, expensive items, since this is the only place they make a lot of margin. For example, this usually between the walk-in area and the check out area (or jewelry counter), where glass art and African trinkets have are seasonal fixtures during the summer months and are replaced by hand-made sweaters and sliver platters during the holiday season. But beware: Costco’s first order of business it to find your supplier and source it themselves and I have many a story verify this happens all the time.

3. For specific products such as books, Costco only takes books that make it onto a bestseller list (New York Times preferably. This has dismayed a variety of self-published authors, and those of us not yet on the NYTimes list!)

4. Specific services such as the moving services company who pitched a brother-in-law who also happened to be a Costco executive and had his offering rejected at the first meeting (much to the relative’s dismay). Why? The service required a high amount of personal management or hand-holding by either Costco or the moving company. Costco shies away from any product or service that requires a lot of maintenance or human involvement to be successful. It simply doesn’t have the margins to manage this type of risk.

5. Be prepared to guarantee a roll-out if you are successful. I cannot emphasize this enough. All products are “piloted”, or tested, at a local Costco, typically the corporate headquarters in my back yard, Issaquah Washington. Headquarters will require validation that you can source and supply volume for the entirety of the stores in the United States if the pilot is successful. What does this mean? Going from 200 products to over 7,000 in less than two weeks if Costco decides on a national roll-out. Costco loves to “move and improve” merchandise and often works through the night to get out new products.



Ask the Expert Getting into Costco Wholesale - To learn more about this author, visit Sarah Gerdes's Website.

Like this article? Share it with your friends
[Get Copyright Permissions] E-Mail | Print | More  


Related Articles Related Articles
Creating a Company That Cares: Costco's Climb to the Top
  Sinegal was in one of the top two positions of power of a rapidly expanding company, when he decided to give it all up on a whim. Sinegal wanted to be on his own, to have the feeling of success that only comes from ...
Lesson #2: Keep Your Costs Low and Your Quality High
  “We only have one bullet in our gun,” says Sinegal, “the right product at the right price.” It seems to be a simple formula for success, but how has Costco managed to master it better than the rest? How has Sinegal ...
Ask the Expert Getting into Costco Wholesale
  Every entrepreneur dreams of having his or her new product in the front aisle of warehouse giant Costco. Located in the backyard (literally) of this author, learn 5 key insights regarding this market leader before y...
Lesson #4: An Open Door is A Company Score
  You have been on the job for five years now. You come in every day at 8 a.m. and stay until well past closing time. You work hard, you work well, and you have never taken a sick day. So, when that better position op...
Lesson #5: Marketing Does Not Need To Mean Spending Millions
  Conventional wisdom says that no company can stay at the top by competing on price alone. But, Sinegal has managed to become the envy of entrepreneurs the world over. He has been able to create a billion dollar busi...

Related Forum Posts Related Forum Posts
New Profile - Costco New Profile - Costco
How was Costco Created? How was Costco Created?
Limit on bulk rice purchases Limit on bulk rice purchases
Walmart and Sam's Club Walmart and Sam's Club
Automate Your Forum Message Posting and Replies Automate Your Forum Message Posting and Replies
Costco Costco
Pain Points as Business Idea Pain Points as Business Idea
Re: What makes a good online review? Re: What makes a good online review?

 
About the Author


Sarah Gerdes
(Visit Sarah's Website)
Sarah Gerdes is recognized as one of the leading partnership experts by Fortune, Inc. Magazine has represented governments, F50 firms and small businesses in forty-five industries. Learn her secrets to jump-starting revenue here.
Have A Suggestion?

View Author's Blog
Become An Author

View Author's Video
Become An Author

Free Downloads


Sarah Gerdes's

Complete
List Of
Marketing
Articles

First Name
Last Name
Email
 
If you enjoyed this article, get Sarah Gerdes's Complete List of Marketing Articles For FREE!
Become An Author