Selling through Costco
Like most of the BIG BOX stores, selling only in the online store requires different qualifications than selling on the shelf. You have to be aware of what they need to discontinue selling, on the shelf to put you in their place. And what is the procedure and timeline of removing the vendor’s discontinued products. An existing vendor is likely to have many products at Costco and you want to replace one or a few of them. Good luck! That procedure is important to learn so you will know what could or will happen to you.
Costco does not hold public vendor "open calls" or provide a general open online application for new product submissions like Walmart. Instead, prospective suppliers must reach out directly through the Costco Vendor Inquiries page or through a category brokerage service.
Key Tips for Reaching a Costco Buyer
Be Prepared: Buyers look for high volume capacity, competitive "epic" pricing (typically lower than standard wholesale), and unique value.
Alternative Entry: Many new or smaller brands start regionally or test the market via Costco’s Special Events/Road Show program before attempting a wider warehouse rollout.
Do you even have the manufacturing in place to produce to Costco’s quantities? Do you have the money to pay for testing of your item, auditing of your factory, legal fees for all the paperwork, etc.
On top of that how big is your company? Costco will not work with you if they make up more than 30% of your company sales as its Both a liability to them, and a liability to you.
Most vendors don’t make a ton of money off of Costco due to Costco asking for a 20% -30% savings to the wholesale market price. Where vendors make their money is volume so you better have the manufacturing in place for the volume.
The manufacturer’s material costs are lower per unit with higher volume discounts. And there is the possibility of the manufacturing cost per unit to go down if higher volume machinery / systems are used.
There are 8 US regional offices and the buyers are independent of each other. If there is selling success in one region the opportunities to sell to other regions grows.
SEARCH GOOGLE for “Costco Wholesale Brokers” for listings, reviews, and insights.
There are 8 US regional buyer groups.
“When searching for a Costco Wholesale Broker on Google (Not YouTube) founders should avoid asking, "Do you have good relationships with the buyers?" It’s the dumbest question I get asked regularly.
This question is unlikely to yield an honest response from a Broker because many brokers are not that honest. A better question is how many SKUs do you have on the floor right now?
Then go in to the Costco warehouse and see if the product is displayed properly. Is the master carton easy to read and the messaging right?
There is no point in asking a broker for referrals. They will only send you positive referrals.
Founders must understand that Costco maintains flexibility in its product offerings and may cancel items at anytime to pursue better options for their members. What happens when you are notified that you have been cancelled?
Costco's top priority is serving its members, not your brand. Costco will get by just fine without your brand in their warehouse, no matter how much value you believe your brand has.
No matter what a broker tells you they do not have a magic relationship with any buyer. The entire selling process is designed to serve the member not the broker or brand.
If a broker tries to convince you that only he can get you in to Costco don’t sign with them. Thank them for their time and move on.
Never sign with a broker that refuses to allow you at the buyer meetings and won’t provide you with monthly sales updates. If your current broker isn’t returning your calls or providing sales reports fire them today they are dishonest .
Brokers won’t tell you that many buyers prefer direct engagement. You do not need a broker to go to Costco no matter what a broker tries to tell you. Quite often it’s much easier and less complicated to get your item in to Costco without a broker. A challenge is to find contact information for the right category buyer in a region nearest your inventory. And then to get a reply. They are almost always overwhelmed with daily tasks.”
Worthwhile Videos to get started:
https://www.youtube.com/watch?v=PGc0P77cUo
https://www.youtube.com/watch?v=NIzGHHvv4UQ
https://www.youtube.com/watch?v=sD05GjV6baM
https://www.youtube.com/watch?v=b-UIzUBFERw
https://www.youtube.com/watch?v=thaTX03UBNo
https://www.youtube.com/watch?v=BTFNdeds1vQ
https://www.youtube.com/results?search_query=+product+broker+tocostco
https://www.youtube.com/watch?v=jQCyrtFXeu8
90 minutes – USMCA export compliance,, customs and logistics training for Costco
Costco Food Sampling System
https://www.youtube.com/watch?v=NlF4yW8dbbw
Written, Edited, Curated and Shared by:
David Bruce Savage - Pointer Consulting
Founder and leader of the Inventor’s Education Forum in Jacksonville Florida
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