shipped to their local warehouse for
installation.
Sporting goods. A wide selection
of outdoor, exercise and sporting goods
equipment.
Special buys. Sometimes
Costco’s buyers find fantastic deals on
spectacular items available in limited
quantities. Members might find a one-of-a-kind diamond ring or a Cadillac
Escalade electric golf cart.
Auto Buying Program. Research
new cars and find a local dealer who
offers special deals to Costco members.
Build a unique diamond solitaire.
Learn everything you need to know
about shopping for diamonds, then
select shape, price, carat size, color
and clarity to order a special ring.
Costco Cash card. Check your
card’s balance.
Costco cookbooks. Browse
1,000-plus recipes from Costco’s five
cookbooks to help make your next
meal memorable.
Custom wine cellars. An easy-to-use online design template offers a
simple way to create the perfect wine
cellar for any home, restaurant or store.
Membership. Sign up for a new
membership or American Express Card,
or renew an existing membership.
Photo Center. Order prints for
pickup at your local Costco warehouse
or special photo gifts to be delivered.
Rebates. Submit a rebate request,
check the status of an existing request
and find out what rebates are being
offered at any given warehouse.
Shopping list. Create a list of
items to purchase online, now or later.
Travel. Choose vacation packages,
rent a car or book a condo for a holiday getaway.
The Costco Connection. The
Online Edition combines highlights of
the print version with the added value
of extended and supplemental content,
including a searchable archive of
recent issues.—Steve Fisher
spring clothing will appear in mid-December in warm regions and a month
later in colder areas.
So why “early in, early out”? The approach is based partly on Costco’s
unique membership and partly on traditional retail principles. For starters, one
key reason that seasonal items are brought in before the rest of the retail world
is because many Costco members are business members who resell the products in their own stores.
Christmas decorations in September are a good example. “We develop
many one-of-a-kind items from around the world and bring them in early for
our gift-shop owners and our wholesale customers, so they can plan ahead for
their own purchasing needs,” explains Mitzi Hu, vice president and general
merchandising manager of imports for Costco.
Another reason is to save costs at the factory. In many cases, particularly
with clothes, Costco works directly with manufacturers to make unique products. With an early deadline, many of these products can be manufactured in
factory downtimes, a move that helps keep costs low.
Having products in early also provides a helpful litmus test for Costco buyers. They can get a good idea of demand from early sales, then place their final
orders accordingly. Ordering accurate amounts is a cost-efficient retail practice.
And as to “early out,” the rationale is simple: It minimizes having extra
stock on hand that must be marked down at the end of the season. Leftovers
either have to be moved and stored or substantially reduced in price. For any
retailer, these are huge expenses that can cut into or even consume profits
made during the rest of the season.
“Because of the low margins we work on, we don’t have the luxury of
clearance sales,” points out Knapp.
While it may be inconvenient to not find that bathing suit late in the season
at Costco, the company’s approach to handling seasonal items has many benefits
for members. One is that in traditional retail stores prices are highest during
peak demand.
“Buying early can save the consumer money,” points out Tim Farmer, a
Costco vice president who oversees the purchases of major appliances.
“Retailers will charge full price for products—or even raise the price—during
peak demand. So the price of an air conditioner in July could be at its highest.
Also, you risk having it sold out because of the heavy and sudden demand.”
He adds, “We hope our members come to trust that whenever Costco
brings in a product it represents an excellent value. By buying early, we’ve
been able to achieve savings that are passed on to our members. But for these
seasonal goods, it’s best to buy early—and not to wait.”
The bottom line is that this approach helps Costco in its mission to offer
top-quality products at the lowest possible prices for members. Buying products
in large volumes, operating no-frills warehouses, fighting to prevent “shrinkage”
(goods that are damaged or shoplifted) and bringing in seasonal products in the
most efficient way all contribute to savings for members.—Tim Talevich
