Costco Wholesale Corporation is a multinational retail company that operates as a membership-only warehouse for bulk purchases.
Being the fifth largest retailer in the world with over 804 stores worldwide, Costco operates exclusively on an annual membership model.
The corporation offers its customers wholesale prices for many products including food, wine, furniture, and electronics.
If this is the first time you got to know about Costco, you are in the right place!! This article explains almost everything about this retail company including how it works, why it’s so popular, what it’s known for, and how it is different from other retail stores.
- 1 What is Costco and how does it work?
- 1.1 What does Costco stand for?
- 1.2 Costco History
- 1.3 What is Costco Known For?
- 1.4 Why is Costco so good?
- 1.5 Costco Membership
- 1.6 Is Costco only in the US?
- 1.7 Are there different types of Costco stores?
- 1.8 How can I get a Costco membership?
- 1.9 Can I join Costco without going to the store?
- 1.10 FAQs
- 1.11 Is Costco owned by Walmart?
- 1.12 Who is Costco owned by?
- 1.13 Does Costco have any subsidiaries?
- 1.14 Does Costco own Sam’s Club?
- 1.15 How much does it cost to join Costco or Sam’s Club?
- 1.16 Can you shop at Costco without being a member?
- 1.17 Can I borrow my friend’s Costco card?
- 1.18 Conclusion
What is Costco and how does it work?
Costco is a retail warehouse chain that sells its products to members only. It generates most of its revenue from selling these products and earns the rest from charging membership fees.
Costco does not allow any item in its warehouse to be marked up more than 14% above cost price, nor does it sell any product at a higher price than what it costs in their warehouses.
The company maintains a very low overhead and makes a maximum profit from membership fees which account for 80% of its gross margin, and 70% of its operating income.
In short, Costco works on the basic principle of selling things at low prices! This is one of the major reasons why Costco is so successful.
What does Costco stand for?
Costco, having its name ‘Cost Company‘ is a brand that was created with the aim of making it easier for customers to manage their spending.
This has been made possible by Costco’s focus on getting its members to visit warehouses instead of buying products online.
It is through this strategy that Costco stands out from the rest of the brands and is able to command a loyal customer base.
Costco’s product range has expanded over time with it not only offering products but also services like insurance, etc.
Costco is a membership-only warehouse chain that was founded in 1983 by James D. Sinegal and Jeffrey H. Brotman, who served as its chairman until 2017.
The first Costco retail store opened on September 15, 1983, in Seattle, Washington. In 1976, James Sinegal, who was a warehouse manager for Sol Price at FedMart in San Diego, joined the company’s management team as food sales and marketing director.
In 1979, he became president of the chain and served until 1991 when he was named CEO of Fedmart Corp., where he remained until 1994.
Sol Price was the founder of FedMart, a chain of supermarkets that were popular during the 1960s and ’70s. Price was known for his principled stance against price-cutting on items such as fresh produce.
When he sold some stores to Wal-Mart in 1976, he held firm with his pricing policy, leading to the eventual closure of many FedMarts.
In 1983, Price met with Brotman and Sinegal to discuss the future of his idea for warehouse shopping. At that time, he was working on a fourth store in Las Vegas called Cash & Carry — which would eventually become Costco Wholesale Corporation.
At first, Price didn’t want to sell Brotman and Sinegal his warehouse business but after considerable discussion, he finally agreed.
It is rumored that what convinced him was the fact that Brotman and Sinegal had been very successful in their careers — not just financially, but also in terms of their dedication to the communities they served.
In addition, both were locally-based and didn’t come from out-of-state as most other business people did at that time. Brotman was a local real estate developer who had started his career in Washington state while Sinegal had worked his way up to vice president at FedMart before being named its president.
In the following years, Costco grew by opening new stores throughout North America. Today, it has over 675 locations in the U.S., Puerto Rico, Canada, and Mexico — employing more than 273,000 people worldwide with over 90 million members.
Apart from groceries, the typical Costco store offers clothing, electronics, and jewelry for less than at most department stores; meat products such as beef and chicken; lawn and garden supplies; books; health products including vitamins, pharmaceuticals, dental care items, and over-the-counter drugs.
What is Costco Known For?
Costco is a membership-based retailer with over 800 stores worldwide. This means that if you want to shop at Costco, you have to pay for a subscription before going into the store.
Also, most of these locations are warehouse-style shops providing fantastic deals on an assortment of goods ranging from food and clothing to books and electronics.
Costco is highly known for its bulk deals on a wide range of products!
Why is Costco so good?
Many customers are attracted to Costco because it is a membership-based retailer.
The in-house brand, Kirkland, at Costco is also becoming more and more popular among the customers of this store.
The items sold at Costco have always been lower in terms of cost than that offered by other retailers as Costco can afford to offer them due to its membership policy.
Additionally, Costco also offers bulk purchase of items that can be bought in large quantities by the customers at very low prices.
And so, it’s so popular in the United States.
Costco offers four membership plans ranging from $60 to $120 per year.
The Gold Star Membership is the cheapest plan and allows you to shop at any Costco warehouse, as well as Business Centers. You can also order a Gold Star Membership online.
If you want more benefits with your Costco shopping experience, then an Executive Membership is a good choice for you. It offers additional rewards, such as discounted prices on certain goods and services.
Is Costco only in the US?
Costco has its headquarters in the U.S but also has its warehouses in the United Kingdom, Australia, Canada, China, South Korea, Spain, Japan, Mexico, France, Taiwan, and Iceland.
So, Costco not only operates in the United States but also offers its services in 11 other countries. It totally operates in 12 areas with the U.S included.
Are there different types of Costco stores?
Yes, there are 4 different types of Costco stores. They are-
- Costco Warehouses
- Costco Business Centers
- Costco Filling Stations
- Cash & Carry
Basically, Costco operates retail warehouses as well as business centers. The main difference between a Costco warehouse and a Costco business center is that the latter sells to small businesses only, while regular Costco stores sell products like clothes, food, etc., which can be available at discounted prices.
How can I get a Costco membership?
Joining Costco is very easy. In order to get a Costco membership –
- Visit a nearby Costco warehouse
- Go to the membership counter
- Fill the application form
- Show your government ID
- Pay the joining fee
- Take your membership card
- Shop in the store
That’s it! This is how you can join Costco. By paying $60, you will get a Gold Membership Card that gives you access to all Costco stores for a period of 1 year.
Can I join Costco without going to the store?
Yes, you can join Costco without going to the store by buying a membership plan online. In order to join Costco online –
- Open your web browser
- Go to costco.com
- Scroll down to the bottom
- Click on Join Now
- Select Gold Star Membership
- Fill all the application form
- Make the payment
After successful payment, you will receive an email from Costco in which your new Costco membership number will be available.
Note down the membership number and take one of your government-issued ID cards. Then, visit a Costco warehouse to get your new card.
Is Costco owned by Walmart?
No, Walmart doesn’t own Costco. Costco is one of the biggest retail chains in the United States and is also a big competitor of Walmart in the market.
Who is Costco owned by?
Costco is owned by Costco Wholesale Corporation, a company with its headquarters in Issaquah, Washington, United States.
Does Costco have any subsidiaries?
Its subsidiaries are Costco Wholesale Canada, Costco Travel, Costco Wholesale Korea, Costco Wholesale United Kingdom, etc.
Does Costco own Sam’s Club?
No, Sam’s Club is owned by Walmart. Founded in 1983, Sam’s Club is also a popular warehouse chain that operates in the United States same as Costco.
How much does it cost to join Costco or Sam’s Club?
It costs you $60 to join Costco whereas it costs you just $45 to join Sam’s Club. So, the annual membership cost of Costco is high compared to that of Sam’s Club.
Can you shop at Costco without being a member?
You cannot shop at a Costco store without being a member. However, its online store is open to everyone including non-members.
Can I borrow my friend’s Costco card?
No, you cannot borrow your friend’s Costco card but you can ask him/her to take you shopping as the company allows its members to bring along their family & friends (maximum of 2).
Costco is a retailer that has a membership-only policy which makes it exclusive and popular in the market. If you want to shop at a Costco near you, you should first buy its Gold Star Membership which is priced at $60 per year.