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Costco

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Template:Infobox Company Costco Wholesale Corporation Template:Nasdaq is a membership warehouse club chain headquartered in Issaquah, Washington, United States, with its flagship warehouse #1 in nearby Seattle.

As of August 2004 it has 441 locations:

Costco employs about 103,000 full- and part-time employees and had 2003 revenue of $41.69 billion.

Costco tends to charge relatively low prices for bulk-packaged goods primarily sold to large families, small businesses and small business owners' families. As a warehouse club, Costco is open to only members and their guests. Memberships must be purchased in advance; the cheapest membership costs $45 for one year.

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Costcowholesalewarehouse.jpg
Patrons entering a typical Costco warehouse.

Costco is famous for keeping overhead low and returning savings to consumers in the form of lower prices. Some senior executives at corporate headquarters use the same office furniture as when they started the company. The company's warehouses are sparsely decorated, with the exception of colorful marketing banners. Most products are delivered to the store on shipping pallets, and the pallets are used to display products for sale on the retail floor. This contrasts with other retailers who take the additional trouble to break down pallets and stock individual products on shelves. Costco caps its profit margin on most products and allows itself higher margins only on its Kirkland Signature store brand.

Costco is also famous for its idiosyncratic inventory practices. Unlike many retailers, stores do not maintain a full range of every product type and every major brand within each product category. Rather, stores carry only a few very popular product categories and selected products within each category.

In some product categories, the company does not rotate products often, so customers can expect certain brands of snacks or beverages to be in stock indefinitely. In many other categories the company constantly seeks the best deals currently available, so products will appear and disappear over short periods of time. This encourages consumers to regularly visit their local warehouse for surprise deals.

Over the years, Costco has gradually expanded its range of products and services. Initially it preferred to sell only boxed products that could be dispensed by simply tearing the shrinkwrap off a pallet. It now sells many other products that are more difficult to handle, like fresh produce, meat, seafood, fresh baked goods, flowers, clothing, books, software, jewelry, art and furniture. Many stores have tire garages, pharmacies, optometrists and gas stations.

Costco has a very generous product return policy that allows customers to return most products indefinitely. Unlike other stores, Costco allows returns of opened media. Many people take advantage of this with DVDs, software and other media. Buyers effectively "rent" the product temporarily by buying and later returning it for a refund. Computers, which most retailers loathe to accept for a refund, have a six-month return period.

Finally, Costco is well known for its hot dog stands. These began as stand-alone impromptu arrangements outside of warehouses but are now built directly into current warehouses as actual mini-restaurants. The company has added other types of food like pizza and ice cream.

Costco merged with competitor Price Club in 1993, becoming PriceCostco until 1997, when it changed its name back to Costco. Today, its largest competitor is Sam's Club.

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