Working with Costco is an important milestone for a CPG brand. Costco suppliers have access to critical distribution channels and an opportunity to grow brand recognition while increasing their sales footprint.
However, as with many other key incumbents in the industry, Costco has specific delivery requirements that its suppliers must meet to create a mutually beneficial partnership. Brands should know the ins and outs before working with the retailer.
Costco often sells its products in bulk and requires that suppliers send orders immediately ready to hit the shelf. That means the pallets in your order must be configured to Costco’s specifications so they can go directly from the truck to the floor for sale and not be rejected.
We will look at what this configuration entails and a few other things to know when working with Costco.
Proper Pallet Configuration for Costco Suppliers
Costco orders go directly from the truck to the sales floor without any unpackaging, which means that all pallets must arrive in good, sale-ready condition. The distribution center will reject product that arrives in any other form.
The retailer requires different pallet configurations based on each specific customer and will provide you with detailed requirements. All Costco shipments must comply with the retail store’s non-negotiable pallet requirements.
If your pallet does not meet these stringent guidelines, it will be rejected and will need to be reworked before you can redeliver it. Your carrier can sometimes complete this process for an additional fee. But other times, you will need to complete the reconfiguration in-house or send it to a third-party rework facility. Most Costco depots have preferred rework facilities nearby that understand how the product needs to be adjusted, and sometimes they can even redeliver the product for you. However, those can be costly for brands.
Appointment Scheduling for Costco Suppliers
Costco requires its suppliers to deliver orders to a distribution center facility and does not typically arrange direct-to-store shipping arrangements. Brands can schedule an appointment through the retailer’s online portal. Here, you can also reschedule and cancel appointments if need be.
If you want to arrange a specific time, you must request it far in advance. The retailer is busier than ever, and schedules tend to fill up fast. Once you’ve secured an appointment, your carrier needs to arrive within 30-minutes of your time to be received by the facility. Any order that shows up outside this window can be rejected.
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Additionally, Costco will specify a due date for your product. This is a strict timeline by which to have your order to a distribution center. Your due date is not the same as your appointment time. As a result, you must keep your due date in mind when scheduling an appointment. The distribution center will allow you to schedule an appointment well before or past your due date. The lack of appointment availability around your due date will not shield you from late delivery penalties or the cancellation of your order.
How a Retail Specialized Logistics Provider Can Help Your Organization with Costco
There is plenty to consider when you begin working with Costco. Without a retail-optimized supply chain, the relationship can unfortunately not be a success. Meeting pre-arranged order due dates takes time and operational bandwidth, which can be too short in supply to work with the retailer correctly.
Scheduling and rescheduling appointment times and working with your buyer to set up optimal delivery schedules can be a complex undertaking without a fully staffed and dedicated logistics department.
Additionally, even if you can handle the influx of communication to set appointment times that can be met, these might not be optimal for the disparate pieces of your organization. A retail-focused logistics provider can assist you in creating production and transportation schedules that work in sync. This synergistic supply chain approach can help you lower costs, increase efficiency, and better your Costco relationship.
A true logistics partner can provide expert consultation on your logistics network, making suggestions for optimal warehousing placement, consolidation opportunities, and implementing pool distribution strategies that are integral in acing your retail relationships.
Zipline Helps CPG Brands Succeed at Their Retail Relationships
Zipline is comprised entirely of retail logistics experts who work with suppliers on a consultative level to exceed the expectations of retail customers. Brands that have a retail optimized supply chain can leverage their successes to increase exposure and facilitate growth.
Since over 95 percent of our orders end up on a retail shelf, we understand what it takes to ensure your product arrives at its destination as intended and on time.
We work with customers to manage their retail orders to create cost-reduction and performance-enhancing supply chain strategies.
Want to see what Zipline can do for you? Reach out to discuss our retail-driven brand transportation strategies today.