If you want to sell to Costco, are already selling to Costco, or just love shopping there, then the latest book The Joy of Costco – A Treasure Hunt from A to Zis a “must read.” The authors, David and Susan Schwartz, delve deep into the secrets behind Costco’s success and, when writing this book, travelled over 200,000 miles visiting stores around the world to bring you the real story – from logistics to merchandising and quality control that make Costco a go-to destination for millions of people every day.
Costco, a multinational corporation, operates an extensive chain of membership-only warehouse clubs and is known for its colossal retail spaces and the place to shop in bulk for significant savings. The company’s success is not only due to its vast product range but its unique business model and customer centric policies.
Bulk Buying Savings: Costco’s bulk purchasing model allows customers to buy large quantities at lower prices.
Quality Assurance: The retailer is committed to quality, often exceeding industry standards – this is especially evident in the Kirkland Signature line.
Diverse Product Range: From electronics to organic foods, it’s always a treasure hunt to shop here.
Member Benefits: Membership comes with perks like lower prices on gasoline, travel discounts and even health insurance options.
Food Court Delicious: Known for its affordable and tasty food court, Costco offers popular item like the $1.50 hot dog and soda combo – the price has not changed since 1984. In 2022, Costco food court sales totaled $1.4 billion.
Customer-Friendly Return Policy: Costco’s return policy is one of the most generous in the retail industry without a time limit for most products.
In 2022, Costco sold over $58 billion in KS products – about 25% of all revenues (excluding gasoline.) As of 2022 there were over 1,000 items with the Kirkland Signature brand name and “sales were greater than Campbell’s Soup, Kellogg’s and Hershey brands combined. Two of Costco’s top selling KS products, bath tissue and paper towels each generate over $1 billion in sale annually. The first KS product was vitamins, which was an immediate success. Now everything from nuts to paper products, from wine to hot dogs – even golf balls – are offered under the KS brand.” The other top best-selling items are bottled water ($730 million), diapers ($650 million) and large eggs ($498 million).
Costco is commercially disciplined with KS products and these products never sell from more than 15% above cost. They are rigorously tested for quality and if it doesn’t sell it is pulled. As an example, KS toothpaste could not compete with Colgate and Crest, so it was discontinued. Kirkland Signature brand also includes over 900 Kosher products. As mentioned in the book, the U.S. kosher market is $22 billion and growing at 4% a year. Costco first began its kosher Costco bakeries in the 1990’s and there are now 23 of them in the U.S. – mainly near Miami and New York City.
Some Unusual Facts About Costco
In 2019 Costco sold $4.8 billion of wine and spirits and is one of the largest wine retailers in the world. The most popular items vary across the world, but KS American Vodka is the best-selling item in the US while in Australia beer is the top star. In France and Spain more wine is sold than spirits, in the UK it is gin and in Japan domestic whiskey in the top-seller.
Diamonds and Engagement Rings: Costco sells high-end engagement rings, some costing as much as US$400,000. In 2021 Costco sold 475,000 carats of diamonds – about 212 pounds.
Rotisserie Chickens: In the U.S. Costco sells over 100 million rotisserie chickens annually. Each chicken container has a time stamp to indicate when it came out of the oven and chickens are pulled from the shelf after 2 hours to ensure peak perfection. Once pulled, the chicken meat is used for soup or in salads. The price is only $4.99 and has not changed since item was first introduced.
Pumpkin Pies: Costco sells over 6 million pumpkin pies between September and December each year and the recipe is still a secret. We do know they use Dickinson pumpkins from Illinois.
Costco sells half of the world’s cashews. In 2022 Costco members bought over $300,000 worth of whole cashews every week.
Costco even sells caskets and coffins at an excellent price.
In 2016, Costco sold over 4 BILLION eggs, 11 million eggs every day.
Many Costco warehouses sell Halal food.
In 2021 Costco’s auto program sold more than 800,000 vehicles-triple the number sold in 2011 without any haggling on the price.
Costco’s e-commerce business has been profitable since the day it began.
China’s first Costco closes early on opening day due to massive crowds Photo via www.thatsmags.com
Around the World
In August 2019, over 200,000 new members – a record number – signed up before the opening of China’s first Costco warehouse.
Japan’s Hamamatsu Costco holds the record for first day opening sales at more than $4.95 million. Costco warehouses in Japan are constructed to withstand earthquakes. All new warehouses ae build with fire shutters – steel barriers that drop down during a fire to seal off and isolate different sections of the warehouse to limit fire damage. Earthquake drills are held every three months.
In Iceland, 75% of the population are Costco members.
The smallest Costco warehouse in the world is in Juneau, Alaska, while Costco is the second largest retailer in Canada.
In France, the “wow” items sold in Costco include smart cars, caviar, and a 15-liter bottle of Champagne.
Costco in Australia sells everything necessary to barbeque including all kinds of “barbies”. Kirkland Signature beef is grass-fed for most of its life but grain-finished for a minimum of 100 days to guarantee tender, marbled flavor.
In 2022 Mexico ranked third for number of warehouses per country, after the U.S. and Canada
On September 28, 2022, Costco opened its first New Zealand warehouse and the warehouse sold out of hot dogs before noon!
In South Korea, bulgogi (“fire beef”) is made daily in the deli and offered at food court as a pizza topping. Beef tongue is quite popular (especially for BBQ) and the deli sells two unique kits – spicey Korean shabu-shabu and stir-fried tripe.
In Taiwan, the opening ceremonies for Costco warehouses involve lion dancing,barrel-sized drums and large orange dragons.
And these are only a few of the facts! Be sure to get your copy of the book (at Costco) because it’s significantly cheaper than other on-line book sellers!
Next month we will review what it takes to be a vendor and Costco’s vendor’s code of conduct.
By Lily Noon
Sources:
The Joy of Costco, A Treasure Hunt from A to Z, David & Susan Schwartz, Hot Dog Press, 2023; also available on www.amazon.com
While the mall food court struggles to survive, Costco thrives by Joy Saha, August 23, 2023, www.salon.com
コストコで商品を売りたい、すでに売っている、あるいは単にコストコで買い物をするのが大好きだという方に絶対読んでほしい最新本があります。『The Joy of Costco – A Treasure Hunt from A to Z』です。著者のデイビッド＆スーザン・シュワルツ夫妻は、コストコの成功の秘密の裏側に踏み込み、この本を書く間に20万マイルを超える旅をして世界各地の店舗を訪れ、真の物語を明るみに引き出しました。物流の仕組みから、商品選び、品質管理まで、この店が毎日数百万人という消費者の買い物の場になる理由を探ったのです。
