Costco Wholesale: Company Overview

Costco Whoelsale, founded in 1983, is the largest wholesale club operator in the United States according to sales volume. Membership to Costco warehouse stores exceeds 55 million members. The main competitor of Costco is Sam’s Club, which has a higher number of warehouses (600+) yet a lower overall sales volume. Costco focuses on selling items with low-margins (resulting in lower costs than competitors) at high sales volumes. The company also sells its own brand “Kirkland Signature label” in its stores, generally at much lower prices than competitors. The company limits its markups on items to 15%, many of which are much lower than the maximum. Costco strives for customer satisfaction through their low prices, low membership fee ($50/year), and offering the same prices to Costco members online at Costco.com. With expanding to over 555 membership warehouse stores in the United States and 7 different countries, Costco has established a dominant place in the market.