Costco is the fifth largest retailer in the world, with over 550 wholesale warehouses in the US and over 124 million Costco members as of May 2023. It’s no surprise that getting a product into Costco is both a huge growth opportunity and a huge challenge—there’s a lot of competition, and Costco offers fewer avenues to becoming a vendor than many other major retailers.

In this guide, you’ll find:

• 3 ways to get a product into Costco
• Top tips for preparing your product for Costco
• How to navigate the Costco vendor application process
• A brief introduction to your do-it-all retail accelerator: EcomHalo.

Let’s get started.

Why Selling to Costco is a Good Idea

Costco is known for providing high-quality products at wholesale price: the lower price you pay when buying items in bulk directly from a manufacturer. Costco members have access to an extremely wide range of products—everything from food to furniture to electronics to household essentials and so on—available for purchase in bulk at a steep discount.

One of Costco’s most unique qualities is their membership-only business model. For a long time, they were one of the last major retailers to focus almost entirely on in-store shopping rather than expanding into the ecommerce space. But during the unprecedented upset of COVID-19, Costco began strengthening their online presence and taking online orders. While brick-and-mortar Costco wholesale warehouses are still member-only, most products on Costco.com are available to nonmembers—significantly expanding Costco’s customer base.

Despite the many challenges of the COVID-19 pandemic, Costco’s business is stronger than ever. Net sales for 2022 totaled $222.7 billion, an increase of 16% from the previous year, and revenue from membership fees increased 9% to $4.2 billion. Costco’s ecommerce websites saw a sales growth of 10%.

Costco customers are highly loyal. In 2022, the Costco membership renewal rate was 93% in the US and Canada and 90% worldwide. They’re loyal to the Costco brand itself as opposed to the brands of individual products—for many Costco members, the fact that Costco is selling something is a trusted endorsement.

In addition, Costco members are accustomed to paying for quality and quantity—often willing to pay more upfront for high-quality items in bulk.

Customer loyalty and an ironclad reputation for providing high-value, competitively priced merchandise makes a retail partnership with Costco one of the most lucrative you can find. It’s also one of the most challenging to secure.

How to Get Your Product Into Costco

What is a Costco vendor? There are 3 types of Costco vendors: online, in-store, and both. Many retailers have online marketplaces where third-party sellers can sell, advertise, and manage their own storefronts and listings. Costco does not allow third-party sellers. Costco vendors and suppliers are first-party only—meaning Costco buys your inventory and sells it to customers. (Third-party means customers are buying directly from you, without Costco purchasing/storing your inventory.) This is the case whether you’re selling on Costco.com, in-store, or both. The exception is Costco Next (CostcoNext.com): an assortment of products from top Costco suppliers, hand-selected by Costco retail buyers. Costco Next allows you to purchase directly from the supplier’s website while still getting your membership discount.

There are a few ways to get your product into Costco.

How to become a Costco vendor 

1. Contact Costco directly

Unlike other retailers, Costco does not offer an online vendor application. The only direct route to becoming a Costco vendor is to call the division office for your region. Costco.com lists all the necessary contact information under Vendor Inquiries.

If a Costco buyer (someone who sources products for a retailer) is interested in your product, you’ll get a call back. They’ll want to learn more about your business, products, marketing, and finances. After that, your information is sent to a Category Buyer, who makes the final decision on whether to move forward with your product or not.

If the Category Buyer says yes, prepare to be audited. Costco will send a team to audit your facilities to ensure it meets their work and quality standards. 

2. Apply to the Costco Supplier Diversity Program

If your business is at least 51% owned by a woman or defined minority, you can apply to the Costco Supplier Diversity Program on Costco.com.

The online application is very short. First, you’ll be asked the following questions: 

1. Is your business at least 51% owned by a Minority or Women? Y/N
2. Are you a US Citizen? Y/N
3. Are you proposing to sell products to [Costco] members? Y/N
4. What is your company’s annual sales volume? Less than $500k/Over $500k

If you answer No to any of these questions, or if your annual sales volume is less than $500k, you are not eligible for the program.

If you answer Yes and your annual sales volume is over $500k, you’ll be directed to complete the intake form. The rest of it is equally short and simple: You’ll be asked to provide contact information, plus basic info about your business, annual sales, and product type. That’s it!

If a Costco buyer is interested in hearing more about your business, they’ll contact you.

3. Set up a Costco roadshow

A roadshow is an opportunity for current or hopeful Costco vendors to showcase their products. You generally get 4-7 days to set up a pop-up stall in a select Costco warehouse, allowing you to make sales, offer samples and product demonstrations, and connect with Costco shoppers.

Visit Costco.com to see a list of upcoming Costco roadshows and other special events. To apply for a roadshow, you’ll need to contact Costco warehouses individually to coordinate with regional buyers.

4. Partner with a retail accelerator

Hey, that’s us!

A retail accelerator is a partner that provides guidance, support, resources, and access to retailer networks.

Here’s what we do:

• Directly introduce you to a Costco retail buyer
• Fast-track the pitching and onboarding process, cutting weeks/months down to days
• Manage your inventory, order fulfillment, shipping, and more in compliance with Costco’s strict requirements and standards

We’ll go into how we help later on.

First, let’s take a closer look at Costco’s vendor preferences and requirements.

Costco vendor requirements

Product

Because Costco sells in bulk (especially in brick-and-mortar stores), vendors must be prepared to process and ship higher volumes of inventory than with many other retailers. If you’re unable to manufacture, package, and ship products in quantities and timelines that comply with Costco’s standards, you won’t be able to secure a Costco partnership.

As a vendor, you’ll need to be able to package and ship your products in bulk. Unique bulk packaging (so they can shelve and sell your product in bulk) is a bonus.

Costco merchandise categories

Foods and Sundries (including sundries, dry grocery, candy, cooler, freezer, deli, liquor, and tobacco)	Non-Foods (including major appliances, electronics, health and beauty aids, hardware, garden and patio, sporting goods, tires, toys and seasonal, office supplies, automotive care, postage, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosk, and jewelry)	Fresh Foods (including meat, produce, service deli, and bakery)

Foods and Sundries (including sundries, dry grocery, candy, cooler, freezer, deli, liquor, and tobacco)

Non-Foods (including major appliances, electronics, health and beauty aids, hardware, garden and patio, sporting goods, tires, toys and seasonal, office supplies, automotive care, postage, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosk, and jewelry)

Fresh Foods (including meat, produce, service deli, and bakery)

Pricing

The reason Costco prices are so low is because Costco makes most of their profit on membership fees rather than sales revenue, which allows them to sell products at a lower markup than other retailers. 

Where most retailers sell products at a markup of 25-50% above wholesale price, Costco caps their markups at 14% for outside brands and 15% for Kirkland Signature (Costco private label). 

But 14% is the upper limit—the average Costco markup is 11%. That means if Costco pays $75 wholesale price, they’ll likely sell the product for about $83 retail price. They can only do this because they’re not 100% dependent on retail sales. 
What does this mean for you? It means you must be able to sell at Costco’s prices. If your product typically costs $10 wholesale per unit, expect to sell it for about $11 per unit. The low markup policy isn’t viable for all businesses. In fact, Costco has a requirement similar to Walmart’s “15% Rule”: Costco vendors should not rely on Costco for more than 20% of their total revenue. A multichannel distribution strategy ensures you’re not depending on Costco for all your sales.

Reputation

Costco carries an average of 3,700 product units (SKUs) per warehouse—a much lower number of SKUs than most other big-box retailers. That means shelf space is extremely limited, and reserved for products guaranteed to be a hit with Costco shoppers.

Being able to prove significant brand engagement can go a long way, especially for smaller businesses without huge sales numbers. A built-in customer base, and/or an online reputation for high-quality products, excellent service, happy customers, and positive reviews, gives your brand a serious boost.

Selling to Costco.com vs Costco wholesale stores

Only Costco vendors can sell on Costco’s online store (Costco.com). Costco does not have an online marketplace for third-party sellers.

As you might imagine, it’s easier to get your products on Costco.com than in brick-and-mortar Costco stores. Digital shelf space is unlimited—whereas physical shelf space is very limited.

Remember, Costco wholesale warehouses only carry an average of 3,700 SKUs at a time. In-store items are limited to best-selling, fast-selling models, sizes, and colors.

There are many, many more products available online than in stores, and most products are available to non-members as well. If you’re trying to become a Costco vendor, focusing on Costco.com might be your best bet.

How to sell in Costco the fast way—with EcomHalo

Getting a product into Costco is a challenge, but it’s not impossible—especially with the help of a trusted partner.

We’re EcomHalo: your do-it-all retail accelerator and omnichannel fulfillment provider.

We don’t just handle your end-to-end logistics, inventory management, and pick-pack-ship order fulfillment needs.

We also leverage our partnership network of 25+ top retailers to help you expand your brand, enter multibillion-dollar channels, and reach millions of customers in stores and online.

We’re your personal guide to the retail landscape—from first step to final mile.

What We Provide

Direct buyer introduction	Fast-tracked onboarding	Full-service fulfillment
No need to call the Costco warehouse and wait for a response. We directly introduce you to a Costco retail buyer, then handle digital content creation, EDI integration, and all other requirements so you can start selling fast.	Become a supplier in days, not weeks, by leveraging our decades of connections in the big-box retail space. Import your products and channels into our easy-to-use cloud-based platform, then watch orders flow into your digital dashboard in real-time.	We store and manage your inventory, fulfill all orders across all channels, and help you optimize your logistics so you can cut costs, save time, and launch into the future of your brand. Go ahead and hit new heights—we’ll make sure you stick the landing.

Direct buyer introduction

No need to call the Costco warehouse and wait for a response. We directly introduce you to a Costco retail buyer, then handle digital content creation, EDI integration, and all other requirements so you can start selling fast.

Fast-tracked onboarding

Become a supplier in days, not weeks, by leveraging our decades of connections in the big-box retail space. Import your products and channels into our easy-to-use cloud-based platform, then watch orders flow into your digital dashboard in real-time.

Full-service fulfillment

We store and manage your inventory, fulfill all orders across all channels, and help you optimize your logistics so you can cut costs, save time, and launch into the future of your brand. Go ahead and hit new heights—we’ll make sure you stick the landing.

Conclusion

In this guide, we covered:

• How to get a product into Costco
• Costco vendor requirements
• Selling on Costco.com vs. Costco physical stores
• A faster, easier way to get your product into Costco—by partnering with a retail accelerator like EcomHalo.

Ready to unlock your benefits? Request a free 15-minute consultation to receive:

• A rundown of our Retail Acceleration and Fulfillment services
• Pricing options and a free quote
• Referrals to other services if we’re not the right fit

Still have questions? Connect with an EcomHalo Guardian—we’re here to help.