What Does Costco offer?
Costco operate membership warehouses based on the concept that offering the members low prices on a limited selection of nationally branded and private-label products in a wide range of categories will produce high sales volumes and rapid inventory turnover.When combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self-service warehouse facilities, these volumes and turnover should enable them to operate profitably at significantly lower gross margins (net sales less merchandise costs) than most other retailers.
Has 4 Operating Segments:
Costco U.S. Revenues:
Costco US offers bulk display of a variety of merchandise discounted heavily and includes limited selection of both nationally branded and private-label branded goods. It charges its members an annual membership fee to give them an opportunity to buy these goods.
Costco International Revenues:
Similar to Costco US, Costco International offers bulk display of a variety of merchandise discounted heavily and includes a limited selection of both nationally branded and selected private-label branded goods. It charges its members an annual membership fee to give them an opportunity to buy these goods.
Ancillary Business Revenues:
Costco, besides selling core merchandise, also offers expanded products and services that encourage its customers to shop more frequently. These businesses include gas stations, pharmacies, optical dispensing centers, food courts, and hearing-aid centers.
Membership fee is an annual fee charged by Costco to its members to give them worldwide access to a wide variety of merchandise. Gold Star memberships are available to individuals; Business memberships are limited to businesses, including individuals with a business license, retail sales license or comparable evidence.
What Are The Alternatives?
Major competitors are companies like Best Buy, Bed Bath & Beyond, Target and Walmart.
What Is The Basis of Competition?
Retailers and warehouse club operators compete in a variety of ways, including merchandise pricing, selection and availability, services, location, convenience, store hours, and the attractiveness and ease of use of websites and mobile applications. The evolution of retailing in online and mobile channels has improved the ability of customers to comparison shop with digital devices, which has enhanced competition.