48x40
The standard North American pallet size — 48 inches deep by 40 inches wide. This is the pallet Costco's entire supply chain is built around.
Blister
A clear plastic formed packaging component heat-sealed to a printed card, used to display and protect individual product units. Common in Costco for hardware, health, and personal care items.
Butterfly Skirt
A four-panel corrugated skirt that wraps around the front and sides of a pallet display, folding down like wings after shipping. Provides branding surface while maintaining floor-ready accessibility.
Cardboard
A general term for paperboard or corrugated material used in packaging. In a Costco context, often refers to single-wall or double-wall corrugated used for cases, trays, and displays.
Club Tray
A corrugated tray specifically sized and configured for Costco's warehouse environment, designed to hold club-size quantities and integrate into a floor-stack or pallet display.
DDC (Direct to Depot/Distribution Center)
Costco's distribution center network that receives full pallet or layer shipments from vendors before distributing to warehouses.
Display Ready Tray Pack
A corrugated tray pre-loaded with product that ships inside a master case and is designed to be placed directly on the warehouse floor or shelf without repacking, reducing labor and handling at the warehouse level.
Floor-Ready Pallet
A pallet that can be moved directly from the truck to the warehouse floor and sold without additional handling. A core Costco supply chain requirement.
ITF-14
A 14-digit barcode used on corrugated shipping cases. Required by Costco on master cases for warehouse scanning and inventory management.
Kirkland Signature
Costco's private label brand, representing high quality at competitive prices. Some co-packing or packaging suppliers work directly with Costco to produce Kirkland Signature items.
Overhang
When product or packaging extends beyond the edge of the pallet. Costco typically prohibits overhang as it creates safety and handling issues.
POP Display (Point of Purchase)
A retail display placed at or near the point of sale to attract shopper attention and drive impulse purchases. At Costco, POP displays are typically floor-standing and pallet-based.
Pallet Skirt
A corrugated or printed wrap placed around the base of a pallet display to cover the pallet and enhance the visual presentation on the warehouse floor.
Road Show
A temporary in-store promotional event at Costco where a vendor sets up a demo or sampling station, often for new or seasonal items. A key sales driver for many brands.
Slip Sheet
A thin sheet of cardboard or plastic used in place of a wooden pallet. Costco uses slip sheets in some operations to save space and reduce weight.
Supply Chain
The end-to-end system of organizations, processes, and logistics involved in moving product from manufacturer to Costco warehouse floor, including vendor, co-packer, 3PL, DDC, and warehouse operations.
Tier / Layer
One horizontal level of cases or trays stacked on a pallet. The number of tiers multiplied by units per tier equals total pallet count.
Treasure Hunt
Costco's intentional merchandising strategy of rotating limited-time, unexpected items to create excitement and urgency. Packaging must stand out to succeed in this environment.
Value Statement
A printed claim on Costco packaging communicating the savings or value proposition to the Member.
5x5
A design philosophy stating that the Costco Member needs to know from 5 seconds at 5 feet what the item is and why they want it. It governs all design decisions we make!
Block Pallet
A pallet construction style using blocks of wood (rather than stringers) between the deck boards, creating four-way forklift entry. Required by Costco.
Buyer Presentation
A formal pitch to a Costco buyer, typically covering product, pricing, margin, logistics, and packaging. Packaging must be finalized or well-developed before this meeting.
Chargeback
A financial penalty assessed by a retailer against a supplier for failing to meet compliance requirements, such as incorrect labeling, late shipments, or improper pallet configuration.
Corrugated
The fluted cardboard material used for boxes, trays, and displays. Corrugated board comes in various flute sizes (A, B, C, E, F) affecting strength and thickness.
Depot
Costco's regional cross dock centers that receives vendor shipments and redistributes product to individual Costco warehouses. Broken into Dry and Wet.
Feature Pallet
A pallet display that flows though Costco's cross dock system that is shop ready the minute it hits the floor.
GFSI (Global Food Safety Initiative)
A benchmarking organization that recognizes food safety certification schemes. Costco requires GFSI certification (SQF, BRCGS, etc.) for food and food-adjacent suppliers.
Item Agreement
The formal contract between a vendor and Costco that outlines pricing, quantities, packaging specs, delivery terms, and compliance requirements for a specific item sold in Costco warehouses.
Layer Tray
A flat 40 x 48 corrugated tray used to separate layers of product on a pallet, providing structural support and preventing damage between tiers during transit and floor display.
PDQ (Pretty Darn Quick)
A small, ready-to-use display tray designed to be placed quickly on shelves or endcaps. Used in Costco for smaller items where a full pallet display isn't appropriate.
Pallet Configuration
The specific arrangement of cases or trays on a pallet, including how many units per layer and how many layers high. Costco requires precise configs for each item.
Pull Cards
Printed cards the Member takes to the register. Requires a specialty display standard.
SQF (Safe Quality Food)
A GFSI-recognized food safety and quality certification. One of the most common certifications required for Costco food vendors.
Stadium Tray
A stepped or tiered tray configuration that elevates product at the back and steps down toward the front, creating a stadium-seating effect that improves product visibility from the shopper's eye level.
Sustainability
All packaging component materials should be readily recyclable, compostable, or biodegradable by consumers in the areas where the product will be sold. Costco actively evaluates vendor packaging for sustainability compliance.
Trap Cards
Printed cards inserted into a display tray that "traps" product in place when sealed together. Typically used with a plastic blister, but plastic free options are available.
UPC (Universal Product Code)
The 12-digit barcode on consumer retail packaging. Every Costco item needs a valid UPC registered through GS1.
Vendor Compliance
The set of rules and specifications a supplier must meet to do business with a retailer. Violations at Costco can result in chargebacks or being dropped as a supplier.
6 Rights of Merchandising
Costco's internal merchandising philosophy: the right product, at the right price, in the right place, at the right time, in the right quantity, with the right information.
Block Style Pallet
A pallet with nine wood blocks supporting the deck, allowing four-way forklift entry. The preferred pallet style for Costco shipments due to stability and handling efficiency.
CHEP
A pallet pooling company whose blue pallets are widely used in the Costco supply chain. CHEP pallets are rented and returned rather than owned, reducing pallet waste and cost.
Club Pack
A larger multi-unit package specifically sized and designed for club store channels like Costco. Typically offers more units or larger sizes than standard retail formats.
Cross-Dock
A fulfillment method where product is transferred directly from inbound to outbound trucks with little or no storage time. Costco uses cross-docking extensively.
Die-Cut
A packaging manufacturing process that cuts corrugated or paperboard into custom shapes using a steel die. Used for display windows, tear-away panels, and custom trays.
Filler Box
An empty or lightly loaded corrugated box used to fill out a pallet layer when product count doesn't complete a full tier, maintaining pallet stability and height consistency.
GS1 Barcode
The global standards organization that defines barcode formats used in retail. Costco requires GS1-compliant barcodes on all products and cases.
Item Number
Costco's internal SKU assigned to each product sold in their warehouses.
Marketing Wedge
A triangular corrugated insert placed at the front of a tray or display to create an angled product presentation, improving shopper visibility and shoppability on the warehouse floor.
PICO
A pallet pooling company whose red pallets are widely used in the Costco supply chain. PICO pallets are rented and returned rather than owned, reducing pallet waste and cost.
Pallet Label
A standardized label affixed to a pallet containing shipment details including item number, quantity, lot, and barcode. Costco has specific pallet label format requirements.
RSC (Regular Slotted Container)
The most common corrugated box style where all flaps are the same length and meet in the center. The standard shipping case used across retail.
Shoppability
How easily a shopper can identify, understand, and pick up a product in the warehouse environment. Costco places heavy emphasis on shoppability in packaging reviews.
Steel
The large racking in warehouses used to merchandise goods.
Tie/High
Describes pallet configuration as number of cases per layer (tie) and number of layers high. For example, a 10x7 config means 10 cases per layer, 7 layers tall.
Tray
A shallow open-top corrugated container used to hold multiple units. Trays are often used as layers within a pallet display and can be display-ready.
Underhang
When the product or packaging does not extend to the edge of the pallet. Costco generally requires product to be flush with or extending to the pallet edge.
Warehouse
Costco's term for its retail store locations. Costco refers to each store as a "warehouse" rather than a store or club, reflecting its no-frills, bulk-format retail model.