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Costco's Global Reach & Business Model

Costco is an American multinational corporation and third largest retailer in the world. It operates 834 warehouses worldwide, including 575 in the United States. Costco pioneered the warehouse club model by offering bulk packages of selective merchandise at significantly low prices to club members. It has over 112 million paid memberships as of 2022. Costco is known for its private label Kirkland Signature brand which contributes to about a third of its total sales. Other key aspects of Costco's business model include membership fees, bulk sales of goods with low markups, and ancillary businesses like gas stations and auto/travel services that increase customer visits.

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Rahul Ahirwar
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110 views15 pages

Costco's Global Reach & Business Model

Costco is an American multinational corporation and third largest retailer in the world. It operates 834 warehouses worldwide, including 575 in the United States. Costco pioneered the warehouse club model by offering bulk packages of selective merchandise at significantly low prices to club members. It has over 112 million paid memberships as of 2022. Costco is known for its private label Kirkland Signature brand which contributes to about a third of its total sales. Other key aspects of Costco's business model include membership fees, bulk sales of goods with low markups, and ancillary businesses like gas stations and auto/travel services that increase customer visits.

Uploaded by

Rahul Ahirwar
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

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Costco
(Costco Wholesale)

• American Multinational corporation


• Third largest retail in world
• World largest retail of choice and prime beef, organic foods,
rotisserie chicken and wine
• 10th rank in fortune 500
Headquarter

• Issaquah
• Washington
• Eastern suburb 
Warehouses

834 Warehouses worldwide


• 575 United Nation
• 107 Canada
• 40 Mexico
• 31 Japan
• 29 united Kingdom
• 16 Korea
• 14 Taiwan
• 13 Australia
• 4 Spain
• 2 France
• 2 China
• 1 ice land
History

• First store open on 15 Sep 1983 in Seattle


• Second store was opened in Portland in October 1983
• Third in Spokane in dec 1983
• The company went public in 1985
• Headquarter in first warehouse settle 
• Moved Headquarter to Kirkland in 1987
1993
 
• Costco and price club merged
Reason : 1 Price club decline Walmart offer of merger with
Sam’s Club( a Walmart Subsidiary)
2: Costco and Price Club have same business
model
• Merger formed a new company name PriceCostco
Now the merger give universal right to both company
customer to access one another resources
• They work jointly for 1 year and generated 16 dollar billion
in annual sales
• Merger Collapse
Reason : Price brother wants their own firm known as
Price smart a warehouse club chain in central America and
the Caribbean
Costco business Model
1. Warehouse Membership Model (retail sale and
membership fee) ( Majority Profit)

Revenue Model

2. 14 % Marked up (Outside brands) over cost Price


3. 15% in home grown brands ( Kirkland Signature)
4. Membership fee contribute 80% of gross revenue
 
Products

Kirkland Signature
• Kirkland Signature is private label brand used for variety of
product sold in Costco Warehouse
• Costco Introduce Kirkland signature in 1995 the name was
originated from their first office city in Kirkland
• Kirkland signature contribute to 1/3 sale revenue
• Its is so famous because the product under Kirkland brand
are manufactured by most popular companies and are
available at low price for example Kirkland branded coffee
is roosted by Starbucks now the Kirkland sold it for 19.8
(Rs.1584) Dollar where as Starbucks sold it for 34.5 (Rs.
2760) Dollars
Costco Connection
• Costco Start Publication of a magazine which is sent for free
for its membership holder, the book was launched in 1997
it features articles about Costco associate business products.
• Its 90% ads space are occupied by big firms ads for example
Procter and gamble buy its full private space for 156000
Dollar a year.
• And about 56% of the member buy the product from the
reference what they seen from the magazine.
Costco Household Almanac bool an annual edition Started in 2007
• 200+ page almanac is kind of recipe book which used most of
Kirkland products in recipes
 
Costco Auto Program
• Providing auto parts at discounted price to membership
holders
Costco business Services
• In 2005 they partnered with Nova Information System
to work under the filed of payment processing
 
Costco Photo Service
• [Link] is a website owned by Costco
wholesale which offer membership holders unlimited
photo storage Space and printing on demand
 
Costco Travel
They offer cheapest price for best available package in the
market to membership holders
 
Costco optical
They are the fifth largest optical brand in united nation and
provide services to every individual but for medicines the
customer need Membership

Costco Credit Card


Initially they accept different card but from march 2022 they
accept only Costco credit card which is issued by CIBC
(Canadian Imperial Bank of Commerce) Mastercard and card
also serve the purpose of membership card
Costco build every Warehouse in same design for example shape size parking lot gas stations inside
racking system and room allotment so any customer can visit any of the Costco warehouse
experience remain same
Reference

[Link]/costco-business-model
[Link]/wiki/Costco
[Link]/topic/Costco/headquater
[Link]
 [Link]
Thank You

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