Costco Is Two Businesses. Most Suppliers Bring One Plan.

Costco’s U.S. comps grew 9.0% in August. Digitally enabled comps grew 17.9%. Most suppliers will walk into their next Costco meeting with one plan for what has become two businesses.

The numbers, from Costco’s September 2 release: $23.70 billion in August sales, up 9.9%. U.S. comps up 9.0%, or 5.6% excluding gas and currency. Digital up 17.9%.

Digital is growing at twice the rate of total U.S. comps, and it carries different economics.

Delivery, damage, pack integrity, search behavior, and service expectations all land on someone’s P&L. Usually the supplier’s, through packaging and fulfillment requirements the account team never priced.

The buyer knows this, and Costco doesn’t present it as two businesses because it doesn’t have to.

It presents one item, one price, one commitment, and lets the supplier discover the digital cost after the fact.

The way this plays out in most CPG companies is that sales is trying to land the plan, e-commerce is measured on conversion, and supply chain is protecting service and cube.

Finance finds out the margin after the commitment has been made. Four functions, four views of one item, and the account manager in the room speaking for all of them with authority from none.

That’s how suppliers end up selling economics the rest of the business can’t support. They didn’t get outnegotiated, they just negotiated with one company while the supplier showed up as four.

Before the next Costco meeting, you need one view:

Which items make money in the warehouse, and which make money in the digital journey?

Which pack works in both and which needs a variant?

What the supply constraints are and which promotional rules hold?

What is the company willing to trade for the digital volume it wants?

Do you know the digital margin on your top Costco item today, or will finance tell you next quarter?

If your commercial and e-commerce teams are walking into the same account with different numbers, get aligned on the view above first.