Wednesday, April 29, 2009

How to sell your products to Costco, Part 2

Last week we left off just as I was about to get into the nuts and bolts of the critical steps required before ever stepping foot into a meeting with a Costco Buyer.

These steps are in order, but feel free to change them around a bit to suit your work schedule and time lines.
  1. Product selection: Determine if a single product or multiple products will be offered. At times, in order to create the value needed to meet Costco's standards, you may have to bundle products together. Bundling products can also help with your distribution as you have created a unique item number.
  2. Pricing: Research distribution network to determine lowest sell prices in the market on the products you would like to offer Costco. Ensure you have a handle on all prices and products being offered for sale. If you don't you can be sure Costco will. They will do their research which means you need to as well. Create a possible pricing structure taking into account prices currently being offered.
  3. Distribution affect: Determine how selling product to Costco at reduced pricing or added value will affect your current distribution network. Distributors and dealers can sometimes become difficult if they believe you are undercutting them by offering the same products to Costco for less.
  4. Packaging: Determine what type of packaging you will be offering to Costco. Costco is very specific on their packaging and palletizing requirements. Price out packaging and graphics.
  5. Logistics: Take a look at your current logistics capacity to determine if you are able to service a large client like Costco. Knowing your capacity will help you calculate what you potential sell through might be. Analyze Costco's routing guide to ensure you are including all required aspects when looking at logistics. Click here for routing guide.
  6. Other Costs: Review these additional costs: 1. Customer service support - Do you have the phone support required to handle the influx of customers or will you have to hire a company to handle this aspect? 2. EDI costs (Electronic Data Interchange) - Price out EDI to include in your financials. 3. Promotional costs - Will you want to participate in any promotions? The various promotions at Costco are where the sales really explode and should be planned for accordingly. 4. Shipping - Costco will require a delivered cost to their depots. You must cost average this out and include in your cost structure. 5. Returns and defects - How will you manage the return and defect portion. This can get expensive and should be carefully evaluated.

Stay tuned for the final post on this subject. As always email me with any and all questions.

Friday, April 24, 2009

How to sell your products to Costco

The Crucial decisions that need to be made before doing business with Costco.
Making the decision to do business with one of the countries most successful retailers is not one of those quick brainstorm ideas hatched over coffee and a bagel at your local Starbucks. I am sure you have lain awake at night dreaming of your product prominently displayed at Costco with thousands of members clamoring around to grab a hold of the last item before they are all gone. No doubt you have rehearsed your response to the frantic phone call from Costco begging for more product, offering anything to get just one more shipment. Cool and unbothered you pause before letting them know you will see what you can do, while at the same time, asking for better terms.
Fortunately this has happened and could happen to you. You may never find yourself invited over to Jim Sinegal's house for holiday dinner, but that doesn't mean you will never be successful selling your products to Costco if you are prepared.
Thousand of companies just like yours have made it into Costco and sold their products successfully for years. What makes the difference between companies that are in and the one's that are out? The successful companies that have made it into Costco and stayed there had the following things in common.
  1. They were prepared: They did their homework and had a plan. They knew what they were getting themselves into and had already made the necessary adjustments for success.
  2. They hired a company or individual who had expertise in selling Costco to fill in the gaps in their plan and advise them during the process. Click here to find out how TLB Consulting can help your company.
  3. They understood Costco's business model and that Costco would not bend their rules even for them.
  4. They were in the right place, at the right time with the right item.

Will your product be the next big item at Costco? Only time and preparation will tell. To get you started I have outlined the first 11 steps which are critical to preparing for a meeting with Costco.

The first 6 of these steps will be featured on my next blog. Stay tuned.

Friday, April 17, 2009

Blog overview

Hello to all and thank you for visiting my Blog.



I thought it appropriate to speak to the purpose of this Blog and what you might expect when visiting. This blog will be used as an extension of my website http://www.tlbconsulting.com/ . The sole purpose of this blog and the website is to connect companies and their products with Costco. My hope is to provide you with a constant stream of information that you will be able to use while deciding whether doing business with Costco is right for your company.



I am a corporate retail sales strategist specializing in Costco. My company, TLB Consulting can help you understand and negotiate every aspect of doing business with this successful retailer from pre-initial contact to seeing your product for sale at Costco.



It is important to remember and should be noted that you do not have to be a large company to do business with Costco, you simply need to have the right tools. Connecting with my company can give you those tools. Many make the mistake of feeling they don't have the finances or logistical support to mount a campaign with Costco. What you might not know is many successful Costco vendors started very small. Selling your products on Costco.com or in a Regional area is a great way to break in and show Costco how your product will sell.

I am sure if you are considering partnering with Costco you have questions. At TLB Consulting we have the answers.

Stay tuned for more information on doing business with Costco.

If you would like to contact me to discuss how your company might benefit from selling products to Costco email me at Tim@tlbconsulting.com.