Ask CMAR About Costco

[Cry Me A River]

There've been a number of Costco related threads in the past while, the most recent one prompted me to start this thread.

I worked for a Costco warehouse for less than a year but got to know the company pretty well (A good friend of mine has worked for Costco for close to ten years and his raving about working there played a big part in my decided to go there). I left on excellent terms to pursue other opportunities in a career that gets discussed a lot on 2+2 but not in OOT. I would have likely stayed indefinately otherwise.

So, if you have questions about Costco, ask away. I left Costgo about 6 months ago so the job is still pretty fresh in my mind. I no longer have my employee handbook or any other work related materials so I may have problems with very specific policy related questions, however I do still have friends who work there I can call if there's any significant questions I can't handle.

Again, I no longer work there so I won't be shilling for the company and I have no vested interest in promoting the place. There are a few factoids that I believe every Costco shopper should know and I'll be sprinkling them in the thread. Don't want to turn this intro a TLDR.

[edfurlong]

How many hotdogs did you eat while you worked there.

[Cry Me A River]

[ QUOTE ]
How many hotdogs did you eat while you worked there.

[/ QUOTE ]

Approx 60,000. Also pizza slices. I never would have thought it would be possible to get sick of pizza.

The best though was to go in with a buddy on a platter of bar-b-q chicken wings from the deli department (some people would buy salads, feh). You'd get a platter for $9.99, have enough for both of you to stuff your face and still have a bunch left over to split up and take home at the end of the day.

[7ontheline]

How much profit are they making on a lot of the bulk stuff? The per unit prices are a lot cheaper than regular stores - are the items still making a lot of money or is it squeezing little edges out of everything?

[szw]

What percentage of products are regional only items?

[szw]

Will costco pricematch other shops? How about if the other shop is having a sale?

[Cry Me A River]

[ QUOTE ]
What percentage of products are regional only items?

[/ QUOTE ]

Pretty much all Costco's will have most/all the Kirkland brands (it's the "house brand"). And then most of the store would be very similar. Besides that, products can very from warehouse to warehouse within the same region. There are 3 warehouse in my city and there were products we had the other warehouses didn't have and products they had that we didn't. Sometimes it would just be box size - We'd have 18 packs, they'd have 24 packs.

This could be a real pain when reshelving unopened returns if you didn't know a department and didn't realise we didn't cary a product

From a purchasing standpoint, regions are pretty big. Canada is basically three regions (East, West and Quebec). I'm not sure the division in the US but it's probably pretty similar.

[Cry Me A River]

[ QUOTE ]
How much profit are they making on a lot of the bulk stuff? The per unit prices are a lot cheaper than regular stores - are the items still making a lot of money or is it squeezing little edges out of everything?

[/ QUOTE ]

Costco margin is very small but it varies by product. For example, the Kirkland products are the "house brand" and Costco is the "manufacturer" (I never really got into whether these were 100% manufactured by Costco owned companies/factories or subcontracted and rebranded by Costco) and the margin is generally better on those since Costco makes money on both ends, retailing and manufacturing.

Costco's stated business model is to ideally have ZERO margin and make 100% of their profits through memberships. This is probably (IMHO) impossible since I expect it would only happen if all warehouses were operating at 100% capacity. As it stands now, Costco tries to have the margin cover operating costs (salaries, building construction, real estate, etc) and have all profits come from memberships.

That's why cashiers are so militant about not letting anyone buy anything without a membership (some cashiers will let expired membership slide but they could theoretically catch trouble for it (really unlikely unless someone was looking for an excuse to jam you up)) and why management are psychopaths when it comes to pushing membership sales and upgrades.

[Kneel B4 Zod]

[ QUOTE ]
For example, the Kirkland products are the "house brand" and Costco is the "manufacturer" (I never really got into whether these were 100% manufactured by Costco owned companies/factories or subcontracted and rebranded by Costco) and the margin is generally better on those since Costco makes money on both ends, retailing and manufacturing.


[/ QUOTE ]

"Costco" doesn't make any of this stuff. It's all made by Private Label manufacturers (the same guys who make the house brand for all kinds of retailers) or it's made by branded manufacturers with excess production capacity (ie Reynolds will make Kirkland Aluminium Foil if they have capacity)

it makes higher margins for Costco b/c the cost is much smaller, and the retail price somewhat smaller, than traditional branded products.

Costco is in charge of the design, advertising, and promotion of these products, but not the production (after the initial spec phase)

[tuq]

Well, you asked me in that other thread to post but I'm headed to bed, so maybe I'll think of some while I sleep and bump it tomorrow.

Which city/location were you at? Is there a standard layout that you're aware of for all stores? The one that I go to is supposedly the smallest in all of AZ, and as such I guess they've had to make concessions.

Did you get to drive the forklift?

Did you grow to hate the customers?