We’ve already considered how important variety is to Cosco but now lets turn to cost as this is often the most cited reason for individuals shopping at cosco wholesale.
Price is so central to people’s thoughts of cosco wholesale as this is what draws them to the store. Cosco wholesale doesn’t aim to offer their customers something fancy, just a lot of things very cheap. The business model revolves around low margins but massive sales and naturally this leads to low prices across the board.
Low costs are also a huge draw for retailers who get their product via cosco wholesale club. It means that they can buy from a local warehouse without having to worry about importing items and the tax concerns which revolve around that. Also, many retailers are not large enough to deal directly with top level producers and so require an intermediary of such size that they can actually get the product from the manufacturer or importer at a decent price.
Indeed it isn’t going too far to say that the low costs are the single most important part of the cosco wholesale strategy because many supermarkets and online retailers offer a wide variety of choice, many producers will ship to small companies and international trade is much easier in the modern world but people love the price at cosco wholesale. They could get everything they get at cosco wholesale somewhere else but choose to go to cosco because they know it will be sold at a low price and in bulk if that is required.
Cosco wholesale club is such a hit with customers and retailers as it offers a wide range of products at really low costs. The variety of product is so important as it means that people can offer have a one-stop shop for all of their needs, there is no need to go around a large number of stores to find all of the products they wanted - cosco wholesale has them all under one roof. This array of products is also really important as it can draw in a very diverse shopping base to the store and thus maximise profits through not limiting itself to one demographic. Indeed young, old or somewhere in between; everyone can find something they want at cosco wholesale even if it isn’t what they need!
For retail customers of cosco wholesale this minimises complexity in their logisitical set up as they receive their product from only one supplier and will often receive discounts if larger amounts are purchased. However, some retailers are afraid of relying so heavily upon one company for if there is a strike or financial hardship in the company then the retailer stands to be without product and unable to continue buisiness. Against this cosco wholesale offer a fantastic infrastructure that has been copied throughout the world with redundancy after redundancy being built into the system to maximize customer satisfaction. However, there is always a chance something will go wrong and in that case the retailer is still left with a product to sell. Therefore whilst cosco wholesale club does the best it can to draw in retail customers it can never hope to be a retailers sole solution and retailers continue to order directly from top level producers and other sourcers to protect themselves.
The idea of cosco wholesale club is that it bridges the gap between consumer and manufacturer or importer. How? Simple – the wholesale companies buy products in bulk from the highest level producer in the country which typically means an importer or the company that actually makes the product. Buying in such large quantities leads to huge reductions for people using the cosco wholesale business model as it means guaranteed sales for the top level producer and encourages more purchases from companies like cosco wholesale.
Cosco wholesale then sell on the product to the consumer or lower level retailer at a cost not drastically above that at which they bought the product from the high level producer. These low margins are made possible by the size of the company and the simple volume of sales they make alongside minimal outlays in store with an emphasis on the product instead of a user experience. The end user or retailer are more than happy however to buy from cosco wholesale as when shopping there they are not wanting to be wowed by service they are simply trying to buy a particular product at a good price.
Another pillar of cosco wholesale is it’s reputation. By selling such a wide variety of products at such great prices, cosco generates great free word of mouth marketing and from that becomes an internationally well known name who people want to buy from. Therefore their success coupled with low prices and variety becomes a self-fulfilling prophecy with each reliant upon the others and indeed influencing them and preventing variation from the original plan.
