How to Get Your Products Into Costco (What Most Founders Get Wrong)
Getting into Costco is one of those milestones founders talk about in passing.
“Once we get into Costco…”
“If Costco ever picked us up…”
“That’s the dream.”
But Costco isn’t just another big retailer. It doesn’t work like Walmart. It doesn’t work like Target. And if you approach it the same way, you’ll waste a lot of time — or worse, land a deal that hurts your business.
Costco is less about brand and more about trust, economics, and discipline. If your product fits their model, it can be transformative. If it doesn’t, Costco will expose weaknesses in your operation very quickly.
This post breaks down how Costco actually thinks, what they look for, and what needs to be true before you even try to get in.
First: Understand What Costco Really Is
Costco is not a traditional retailer.
They don’t make most of their money on product margins. They make it on membership fees. That changes everything.
Because of that:
They care deeply about customer trust
They keep margins extremely tight
They protect their brand fiercely
They say “no” far more than “yes”
When Costco carries a product, they are effectively telling their members:
“This is a good deal. We’ve vetted it.”
That endorsement matters more than shelf space.
Costco Is a “Yes or No” Retailer
Most retailers give you room to iterate. Costco doesn’t.
They usually:
carry one SKU per category
bring in products for limited runs
cut fast if something doesn’t move
don’t tolerate operational issues
This means Costco isn’t a place to “test” a product. It’s a place to prove one.
Your Product Must Work as a Costco SKU
A common mistake founders make is pitching their existing retail product as-is.
Costco SKUs are different.
They are usually:
larger pack sizes
bundles
exclusive formats
obvious value propositions
Costco customers expect to look at a product and immediately think:
“That’s a good deal.”
If your pricing needs explanation, it won’t work.
Pricing: Where Most Pitches Die
Costco is ruthless on pricing — and they should be.
They expect:
aggressive wholesale pricing
room for promotions
room for returns
room for freight and shrink
You need to understand your numbers cold.
Before you ever talk to Costco, you should know:
true landed cost
margin at scale
cash required to fulfill a large PO
how long you can float inventory
If you need the Costco order to save your business, it’s probably too early.
Operational Readiness Matters More Than Brand
Costco buyers are operators first.
They care about:
consistent supply
clean labeling
reliable manufacturing
packaging durability
compliance documentation
They are not impressed by:
social media following
PR coverage
influencer campaigns
If your supply chain breaks under pressure, Costco will feel it immediately.
The Buyer Relationship Is Quiet (and Long)
Costco buyers are not flashy.
You don’t “pitch” them the way you pitch Target or Walmart. Often:
conversations start informally
samples matter more than decks
follow-ups take months
timing matters more than enthusiasm
Sometimes the best thing you can hear is:
“Not right now.”
That often means:
“Stay in touch.”
Regional Tests Come First
Most products don’t launch nationally at Costco.
They start with:
regional warehouses
limited-time roadshows
seasonal runs
This is where founders get caught off guard.
A “small” Costco test can still mean:
tens of thousands of units
major upfront production
real financial exposure
Make sure you can survive success.
Returns Are Part of the Model
Costco’s return policy is legendary.
That generosity is part of why customers trust Costco — and it’s non-negotiable.
You need to plan for:
higher return rates
damaged packaging
inventory write-downs
If returns break your margins, the model doesn’t work.
When Costco Makes Sense (and When It Doesn’t)
Costco makes sense when:
your margins improve with scale
your product is simple to understand
your supply chain is stable
your brand can handle tight pricing
you want velocity over variety
Costco does not make sense when:
your product needs explanation
your margins are fragile
your operations are still manual
your business depends on premium positioning
Costco is not a branding exercise. It’s an efficiency test.
A Realistic Founder Scenario (Composite)
A food brand doing strong DTC numbers landed a Costco regional test.
Sales were incredible.
Margins were thin.
Cash flow was strained.
Returns were higher than expected.
They didn’t lose money — but they learned fast.
The second run was better.
The third run was profitable.
The fourth run became predictable.
Costco rewards operators who learn quickly and stay disciplined.
Final Thought
Getting into Costco isn’t about being impressive.
It’s about being reliable.
Costco doesn’t need innovation for its own sake. It needs products it can stand behind without hesitation.
If your product fits that model, Costco can change your business.
If it doesn’t, Costco will make that clear quickly — and that clarity, while painful, is valuable too.