In 1983 Costco and its subsidiaries started as the brain child of Jim Sinegal and Jeff Brotman in Seattle, Washington. Sinegal and Brotman developed Costco to better the operation of club warehouses and was designed to serve the business community. Costco is now the largest wholesale club and the third largest retail chain in America and is designed for the discount driven consumer. Costco is not only in the U.S. but is also operates successfully in Canada, the United Kingdom, Mexico, Japan, Australia, and Spain. Costco also has subsidiaries in Taiwan and Korea. Costco employs approximately 200,000 employees and now has their headquarters in Issaquah, Washington. Costco’s goal is to supply its members low cost on a narrow selection of nationally branded high quality products. These members are typically college educated suburban baby boomers. Costco also offers their private label Kirkland Signature merchandise in a huge variety of products and categories and has perfected the method of high-income volumes and fast inventory turnover which appeals to these baby boomers. By using efficient distribution and the decreased handling of products in a simple warehouse Costco is able to not only perform profitably but they are able to do it with small gross margins than other conventional wholesalers. …show more content…
By controlling who enters and exits the warehouse Costco is able to have lower product losses than those of different retailers. Another way that Costco is able to control product loss is by carrying a verity of products that include dry and packaged meals, sundries, tobacco, cleaning materials, home equipment, electronics, health aids, fresh food, clothing, furniture, gasoline, and even pharmacy, but not carrying several different brands of each product. Costco’s philosophy is to offer its members with the highest quality items at the most competitive