NextStep CPG

Costco Playbook

Retailer Launch Coster

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NextStep CPG

Costco Playbook

Will your Costco launch make money?

A launch P&L built on how Costco actually works — depot freight, demo accruals, MVM funding, roadshows, free fill, and the 12-week rotation reality.

Step 1 of 3

Your product

The club-pack configuration you're pitching — not your everyday retail SKU.

SKU / product name

Fully loaded COGS per case ($)Your true cost to make and land one club-pack case. Units per caseUnits inside one club-pack case.

Your sell price to Costco, per case ($)What Costco pays you per case — before any programs or funding.

Step 2 of 3

The Costco program

How Costco's model touches your numbers — markup, depots, demos, and any funded programs.

Costco markup (%)Costco's capped club markup — usually 14%. Number of depots you'll ship to

Freight to depot, per case ($)Your cost to get a case into Costco's depot network.

In-warehouse demos

Costco expects demo support — typically funded as a % accrual on your sales.

% of revenue $ per year

Demo accrual (% of revenue)The standard Costco demo accrual is ~15%. Annual demo spend ($)

Roadshows (separate from demos)

You bring your own stock, Costco bills you for what sells. Travel, staff, and samples are on you.

Roadshow events per year Units sold per event

Your cost per event — travel, staff, samples ($)Everything you spend to show up, excluding product (that's in COGS).

MVM / coupon program

Multi-vendor mailer or in-warehouse coupon — you fund the discount and the program fee.

Events per year Program fee per event ($)

Discount you fund, per unit ($) Units sold per event

Free-fill casesCases given free to fill the pipeline — costed at your full COGS. Expected year-2 cost reduction (%)Costco will ask for a cost-down in year two. Plan for it now.

Step 3 of 3

Volume and hurdle

Costco thinks in dollars per warehouse per week — not cases. Hit the threshold or the rotation ends.

Rough rule of thumb: a warehouse needs to move about $2,000/week of your product to keep you on the shelf. Below that, you're at risk when the rotation is reviewed.

Expected sales per warehouse per week ($)We'll convert this to cases using your club-pack ring.

Warehouses listed Weeks listedNewer brands typically start with a 12-week rotation. Many only get one shot.

Your target net margin (%)We'll show the sell price you'd need to hit it.

Your launch

Net launch contribution · 0% net margin

Total cases (incl. roadshow)

Net per case

Sell price needed for target margin

Implied shelf price per unit

🏷️ Costco retail price (goal)

Per case on shelf$0

Per unit$0

Based on your sell price and Costco's markup.

Launch P&L

Year two

Sell price after 3% cost-down$0

Per-case margin at year-two pricing0%

Costco's EDLP model means recurring cost-down requests. If the year-two line doesn't work, negotiate the cost-down before you sign — not after.

⚠️ Costco reality checklist

No slotting — but the trade is brutal efficiency expectations and fast turns.
12-week rotations are the audition. Many brands get one rotation. If you don't move, you're out.
$2,000/warehouse/week is the rough survival threshold — track it weekly, not quarterly.
Demos accrue off your sales (~15%) — they're not optional and they're not free.
Roadshows are a separate bet — you fund the stock, staff, and travel; Costco bills what sells.
MVM/coupon funding is on you — the discount and the program fee both come out of your pocket.
Depot freight is yours. Club-pack configuration has to survive the depot-to-warehouse chain.
Returns come back to you. Costco's generous return policy is funded upstream.
They pay fast — one of the genuine upsides. Model your cash flow accordingly.

Want a second set of eyes before you sign?

Alex has negotiated Costco launches from the brand side. A 30-minute review of your P&L before you commit can save you a bad rotation.

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