Common Club Terms and Definitions
5 X 5 RULE
Member needs to know in 5 sec. from 5 feet what your product is, your value, and why they need to purchase
Synonym: thermoform, vac-form
Low cost plastic custom formed to hold product. Used as a Tray or captured in a Trap Card
Material of choice is (r)PET. Widely recyclable throughout the US.
PVC is a material which is allowed in Costco!!
Not a false bottom, this innovate design creates a billboard and raises product up to a shoppable height.
Be careful, there are multiple patents on its construction and attachment!
CARDBOARD (AKA PAPERBOARD)
Cardboard or paperboard refers to a thick paper stock. You can see this type of material used for cereal boxes or greeting cards.
Not to be confused with corrugated board.
Corrugated can be identified by the wavy "medium" in between 2 or more flat paper liners.
Corrugated is specified by the following:
1) Board style: Single wall, double wall are the most common.
2) Flute type: A, B, C, E and F specify the height of the medium. Flute choice depends on strength and printing requirements.
2) Strength: Specified as Burst or ECT (Edge Crush Test). Stack height, product weight and other handling requirements will determine the required strength.
Note: Costco doesn't specify corrugated material specs. It's up to the supplier to ensure the specs allow product to flow safely through Costco's supply chain.
Cross-docking involves unloading materials from an incoming truck at consolidation points and loading these materials directly into outbound trucks with little or no storage in between
Costco’s depots is the terminology used for distribution centers. Although these distribution centers hold very little inventory. The depots utilize cross-docking
for handling full pallets of merchandise from suppliers to warehouses.
Self contained, free standing product display on a 40" x 48" pallet. Used to ship and showcase product in Club
Regulatory compliance for heat treatment (HT) of pallets which is required when shipping product from overseas on solid wood pallets.
A unique seven digit number assigned to your item. This number must be listed above your UPC code (and often requested to be added to the font of your packaging)
Both filler and marketing billboard, use this when your product needs more real estate to communicate value to members
Costco refers to their customers as members. As of 11/22/20, there are 107.1 million (as of 11/22/20) Costco card holders.
CHEP / PICO / IGPS PALLETS
Blue (CHEP), Red (PECO) and Black (iGPS) are pallet rental services for 40" x 48" pallets. You are charged a daily rental rate until the pallet is delivered into retail and removed from your books.
Used for high value/ high theft items locked in cages behind the register.
A member will take this card with them to the register for payment and receive the product, and the Card is returned to the Feature Pallet Display.
Restocking of product. Often sent into depots and separated by layer or case during cross dock.
Here is a picture with a protective cover (HSC= half slotted container)
Fancy Costco jargon for placing items on the metal warehouse racking (shelves) opposed to feature pallet displays.
The network between Costco and its suppliers to produce and distribute products through Costco Depots and finally to Costco Warehouses.
Costco expects that all packaging component materials should be readily recyclable, compostable, or
biodegradable by consumers in the areas where the product will be sold.
Synonym: Blister Card, Trap Blister
Presentation packaging used as a billboard to showcase value, highlight features and reduce theft. A thermoformed blisterform is sandwiched between layers of corrugate or paperboard
Costco uses only 40" x 48" pallets. Design your pallet right from the start. Underhang (smaller footprint) leads to stability and shifting issues.
Overhang (larger footprint) is not allowed in Costco
Costco Specifications state: Unitload footprint must not exceed 48"x40", and cannot be smaller than 44"x37". Recommended footprint is 47.5"x39.5".
A compliment to the 5x5 rule
Its your products competitive advantage. Often placed on the front lip of a branded Tray.
Costco uses the term warehouse when describing their 803 retail locations worldwide (As of 11/22/20). Look around at the pallet racks on your next trip to Costco. You are actually shopping inside of a warehouse.