VENDORCO Blog

Costco Wholesale is currently the top membership chain by sales in the United States, despite the fact that Sam’s Club has more physical locations. Costco also has a higher membership rate (approximately 55 million) and presumably a higher membership retention rate (around 87%)

Costco Wholesale is clearly the optimal retailer from a sales, distribution, and marketing standpoint. 

-          Founded in 1983

-          Acquired by Wal-Mart in 1993

-          Approximately 600+ clubs worldwide

-          Located in 47 US states

-          Approximately 47 million US members

-          Average club size = 133,000 square feet

-          Membership cost: $50/year

Ref: http://en.wikipedia.org/wiki/Sams_Club

BJ’s Wholesale operates mainly on the east coast (recently acquired by two private equity firms)

-          Founded in 1984

-          Approximately 185+ clubs nationwide

-          Located in 15 US states

-          Approximately 23,500 employees

-          The only warehouse club to accept Visa

-          Membership cost: $50/year

Ref: http://en.wikipedia.org/wiki/BJ%27s_Wholesale_Club

-          Founded by Jim Sinegal and Jeff Brotman in 1983

-          Approximately 55 million members

-          Nearly 600 warehouses worldwide

-          President and CEO is Craig Jelinek

• Craig Jelinek was the Store Manager for Costco 6thlocation, Tukwila, WA, and has worked for Costco for over 27 years

-          Costco is currently the largest warehouse membership chain

-          6^th largest US retailer, 7^th largest worldwide retailer

-          Membership cost: $55/year

Fun Fact: In 1991, Costco asked its employees to send in name suggestions for their private label products.  The winner was Kirkland Signatures, chosen to reflect the city in which Costco had their corporate offices. 

Ref: http://en.wikipedia.org/wiki/Costco

There are three main wholesale chains that are geared toward consumers:

BJ’s Wholesale (mainly operated on the east coast)

Sam’s Club

Costco Wholesale

What are the appeals of each? Read our next few blogs for facts about each wholesaler. 

Wholesale retail often refers to the sale of goods/services to other businesses or retailers. However, wholesale retailers can also target the consumer, as is the case with a select few big-box wholesale chains.

“Wholesale retail” in this context can refer to a membership based retailer that pushes mass quantities of product through their stores each day. These stores may be referred to as “warehouses”. These wholesalers can also be identified by their larger than average pack sizes. For example, a 36-pack of toilet paper.

What options do consumers and manufacturers have for these retail wholesale chains? Check out our next blog. 

For manufacturers/service providers, the retail world offers a myriad of options to house your product or service. The goal of the particular retailer of choice is not always the same. Some retailers provide excellent visibility and advertising, some retailers allow you to increase your margin, some retailers provide opportunities for long term relationships and company growth, and some retailers allow you to sell your product in mass quantities.

Every decision you make in retail should be calculated. So, before pitching your product/service to a particular retail venue, keep the many options that you have in mind:

• E-Commerce
  • Popular online stores can be an option for manufacturers with the ability to drop ship single product purchases to any address in the United States (including Alaska and Puerto Rico)
• Street Marketing
  • Street marketing may include Farmers Markets, fairs, co-op shops, etc.
• Boutique
  • Single location store fronts, often on main streets, boulevards, shopping malls, etc.
• Small Brick & Mortar
  • Small chain locations that may be regionally based
• Mid-Sized Brick & Mortar
  • Mid-sized retailers can be a gray area. As a rule, we refer to mid-sized retailers as those chains that cover at least 25% of the continental United States.
• Large Brick & Mortar
  • Large retailers that are highly recognized by most US shoppers
• Wholesale
  • Wholesale is often referred to the sale of goods/services to other businesses/retailers. This avenue of consumer retail is one exception. See our next post for more information about Wholesale.

Keep in mind, within each category there may be additional options (department stores, convenience stores, etc.). This list is categorized by distribution and relative size.  

In the retail market there is always competition – and the Wholesale realm is no exception! So before you decide to move forward with a particular wholesaler, read our blog posts this month that are all about Wholesale Clubs!

This month we will cover:

-          Defining Retail

-          Defining Wholesale Clubs

-          Wholesale options

-          Facts about BJ’s

-          Facts about Sam’s Club

-          Facts about Costco

-          Compare/contrast Wholesalers

Stay tuned!