Cosco Wholesale Club


The Cosco Wholesale Club is the biggest membership warehouse club chain on the panet. Their main office is in Issaquah, Washington, with its flag-ship warehouse in Seattle. Cosco Wholesale Club Canada network is based in British Columbia and Ontario.

Cosco Wholesale Club History

Cosco opened its 1st warehouse in Seattle, in September 1983. Mr. Sinegal began working for Sol Price at FedMart and Price Club. Mr. Brotman had also been entrenched in the retailing business since he was a young man.

Sometime in 1993, Cosco merged with Price Club. Cosco’s business model and size were similar to those of Price Club, which was founded by Sol and Robert Price in 1976 in San Diego, California. Therefore, the combined company, PriceCosco, was effectively double the size of each of its parents. Just after the merger, PriceCosco had 206 locations generating $16 billion in annual sales. PriceCosco was initially led by executives from both companies, but then Sol and his son Robert Price founded Price Enterprises and left in 1994. In 1997, the company changed its name to Cosco Wholesale Club.

Cosco Wholesale Club in Present Day
Consumers walking into a Cosco warehouse club. The main competitor in the membership warehouse space is Sam's Club. Although Sam's Club has more warehouses than Cosco, Cosco has higher total sales volume. Cosco wharehouse club employs about 150,000  employees, as well as permanent part-time employees, and for fiscal year 2006, ended on September 3, 2006, the company's store sales totaled $60.2 billion[8] of which $1.1 billion was net profit. Cosco is #32 on the Fortune 500.

In July 2007 - Cosco Now Runs 510 locations. 30 in Mexico, 19 in the U.K., 375 in the U.S. and Puerto Rico, 71 in Canada, 6 in Japan, 4 in Taiwan and 5 in South Korea.

Cosco Warehouse Club - Concept Stores

Cosco currently operates two other retail formats, a home furnishings concept known as "Cosco Home," and a strictly business operation known as "Cosco Business Center."

There are currently two Cosco Home locations (Washington State & Arizona, both in former HomeBase warehouse stores) with plans for a third on the west coast. Cosco membership is required, and hours of operation are identical to that of regular Cosco warehouses.

There are a handful of Business Centers, all of which offer delivery via a private fleet of trucks. Some locations have a retail selling floor open to Cosco members who wish to shop in person, while others are strictly delivery only.

Cosco Wholesale Club Model of Business
Cosco focuses on selling products at low prices, at high volume. These goods are usually bulk, and marketed to large groups and business operations. Furthermore, Cosco doesn't carry multiple brands or varieties where the item is substantially the same. This results in high volume of sales from single vendor, allowing further reduction in price, and reducing marketing costs. Cosco also saves money by not stocking extra bags or packing materials; to carry out their goods, customers must bring their own bags or use the merchandise shipping boxes from the company's outside vendors.

Membership fees at Cosco are 50 dollars a year for Goldstar and Business Memberships, which can be upgraded to Executive membership for an additional 50 dollars a year. Along with the additional benefits the executive membership has (e.g. car purchasing savings, home loans, car insurance, check printing services) executive members also receive an annual "2% Rewards Check" from Cosco on all purchases made (excluding gasoline and tobacco).

Cosco is only open to members and their guests, except for purchases of liquor and gasoline in some U.S. states due to state law; and prescription drugs due to federal law. Memberships have to be bought in advance for 1 year. All buys made at Cosco Wholesales Club's web site don't need a membership - but, a five percent fee is added to buys made by people who are not members. Purchases made with Cosco Cash Cards also do not require a membership, and there is no surcharge. To avoid credit card processing fees, U.S. Cosco locations only accept American Express, PIN-based debit cards (Interac in Canada), cash, and checks. Guests of members are not allowed to write checks.

Lighting costs are reduced on sunny days, as most Cosco locations have several skylights. During the day, electronic light meters measure how much light is coming in the skylights and turn off an appropriate percentage of the interior lights. During a typical sunny day, it is very common for the center section of the warehouse to have no interior lights burning.

Most products are delivered to the store on shipping pallets, and the pallets are used to display products for sale on the retail floor. This contrasts with other retailers that break down pallets and stock individual products on shelves. Cosco caps its profit margin on most products at 14% or 15%, but generally limits price markup on products from 8%-10%.

Cosco Wholesale Club Cash Cards

Cosco Cash Cards can be purchased in the warehouse and members can load them with money to make non-cash purchases at all Cosco warehouses in the U.S.. Because Cosco gas stations take only Cosco Cash, debit cards, and American Express, people who normally pay for gas by check or cash must purchase a Cosco Cash Card inside the actual Cosco building before filling up.

Cosco Wholesale Club Items For Sale
Over the years, Cosco has gradually expanded its range of products and services. Initially it preferred to sell only boxed products that could be dispensed by simply tearing the shrinkwrap off a pallet. It now sells many other products that are more difficult to handle, such as fresh produce, meat, dairy, seafood, fresh baked goods, flowers, clothing, books, software, home electronics, jewelry, art, hot tubs, and furniture. Many stores have tire garages, pharmacies, hearing aid centers, optometrists, photo processors, and gas stations.

Some locations have liquor stores, often kept separate in order to comply with liquor license restrictions. In some states (such as Texas), the liquor store must be owned and operated by a separate company with separate employees. In 2006, Cosco won a court decision against the state of Washington allowing it to purchase wine directly from the producer, bypassing the state retail monopoly.

Cosco also acts as an investment broker and travel agent. They have also introduced an automobile purchasing program where members can purchase new cars at specially arranged prices. They also have an agreement with Ameriprise for auto and home insurance.

Cosco Wholesale Club Promotes The Kirkland Brand
Kirkland Signature is Cosco Wholesale Club's store brand, otherwise known in the retail industry as an "own-brand." It is found only at Cosco Warehouse Club stores and is trademarked by the company. The name derives from the fact that Cosco's corporate headquarters were located in the city of Kirkland, Washington between 1987 and 1996.

To counteract the consumer confidence problem common in store branding, Kirkland Brand often depends on Co-branding. According to Cosco, while consumers may be wary of same-store-branding, they are less likely to be wary of brands that they are familiar with and trust.

Employment (jobs) at Cosco Wholesale Club

While some former Price Club locations in California and the north-eastern U.S. are staffed by Teamsters, the majority of Cosco locations are not unionized. The non-union locations have revisions to their Cosco Employee Agreement every three years concurrent with union contract ratifications in locations with collective bargaining agreements. Similar to a union contract, the Employee Agreement sets forth such things such as benefits, compensations, wages, disciplinary procedures, paid holidays, bonuses, and seniority. As of March 2007, non-supervisory hourly wages range between $12.00 to $20.

2007 All rights reserved.