No matter your product, for a retailer, getting in front of new customers is at the core of your success.
As one of the few big retail stores to have survived in the world of Amazon, getting your products in-store at Costco would be a huge opportunity for any brand.
Costco is a membership-only big box store, often used by other, smaller, retail owners. Here’s how to become a Costco supplier.
Your different options for selling in Costco
Costco is no longer just a physical store –– customers can now shop their catalogue from the comfort of their own home.
Initially, even as other big retailers shifted and strengthened their online presence, Costco really only focused on selling in store. But after the coronavirus pandemic hit, and many people relied on online shopping, they reassessed their selling strategies. As online shopping rates soared across the country, Costco and their suppliers adapted to online orders.
Selling on Costco.com
Unlike Walmart and Amazon, Costco's online store is made up only of Costco vendors –– it’s not a third-party marketplace. If you meet the right conditions, you can sell on Costco.com and also in their brick-and-mortar stores.
While in-store shoppers need to be Costco members, most products sold through Costco.com are available to non-members.
Selling in Costco stores
Online shelf space is practically infinite, but if you want to sell your products in Costco stores, you’ll have a lot more competition. To prove yourself as a vendor worthy of being stocked on physical shelves, you’ll have to prove to Costco that your product will be successful and competitive.
Remember that, due to the bulk nature of in-store Costco purchases, you’ll be required to provide a much higher stock volume than other stores. Make sure that your company will be able to process this. Determine the discount you'll give – and the new price point.
There are benefits for both online and in-store - determining which is better for your product really depends on your price point, target market, and product type. For example, if you’re selling a high-end luxury shampoo with a $30 price point, it won’t exactly fly off shelves. But it could go gangbusters on the online store, where customers can compare the price with other websites.
This is a special event where brands can set up mini pop-up stalls to show off their products to Costco members. Usually they last for a week to ten days, with all types of companies coming to show off and sell their wares. This can be a great way to get in front of a new batch of consumers, and is a stepping stone to becoming a Costco supplier.
Applying to be a Costco supplier
Here are the steps to take if you want to sell your products in Costco:
There’s no online application form, instead potential suppliers will have to get in contact via phone. Here’s a list of their contact information, based on what region you’re in.
If they’re interested, you’ll hear back from the division office –– they’ll want a list of your products and a bit of information on each one. Be ready to answer questions about your products’ marketability and your financial information. From here, your Costco vendor application is forwarded to the Category Buyer, who determines the applicability of your product.
Once the Category Buyer deems your products worthy of being stocked in Costco, they’ll send a team of auditors to your production facilities to inspect your work standards. If you pass, then you’ll be granted permission to be a Costco vendor, yes!
If you’re selling on Costco.com, you want to be sure you’ve got a fully-functioning website equipped for eCommerce. That way you can integrate your current online store with Costco.com easily.
Note: Costco has pledged to provide opportunities for qualified local minority-owned and women-owned suppliers in the community wherever possible. If you fall under this umbrella, applying for their Supplier Diversity Program is a great way to get a leg-up in your application to become a vendor.
Of course, there is an easier way to do it. At Buffalo Market, we act as a middle-man between suppliers and retailers. Experts in food and drink distribution, we can help manage your applications to become a supplier to big-box retail stores like Costco.
Things to keep in mind when applying to be a Costco supplier
Work on your online presence
You don’t need to be a social media superstar, but having a devoted audience who engages with your content is a great way to show Costco that you’re a legit brand with built-in consumers.
Invest in good packaging
If you’re going to be selling in stores, you need to make sure that your products stand out from everything else on the shelves. What will make consumers reach for your product over the hundreds of others around it?
And make your products look good online, too
Be sure to have clear and well-lit product shots –– you might want to invest in a professional for this. Also keep in mind that products are found on Costco.com through searches. The more descriptive your product name and description is, the more likely it is to show up high in the results.
Know Costco’s standards before you start your application
Costco has certain benchmarks and standards that your products need to meet before you can be enlisted as a supplier. Make sure yours qualify; you don’t want to waste all your time with applications if they’re not suitable.
Research your price points
People shop at Costco mainly to bulk buy, that means lower-than-normal prices. Have a look at the pricing of competitor products at Costco, and use those as a guide to determine the best price point for your products. You don’t want to be too cheap, but you definitely don’t want to overprice yourself!
Figure out where your stock will sit in-store
You should have a good knowledge of the store’s layout, and what your stock will look like on shelves. Pay a visit to your local Costo and scope it out.
Offer discounts to any customer who leaves reviews about your products
After all, we know that a lot of consumers make purchasing decisions based on other customer reviews.
If you’re trying to get your foot in the door as a Costco supplier, you can partner with Buffalo Market for a much smoother application process. Get in touch today to see how we can help.