Costco Makes Late Entry into B2B Market

While Costco Wholesale Corporation has always had a fair share of the office supply market for small businesses, with companies like Indoff and Office Depot making the most of the Internet, much of the medium-to-large business market has ignored the giant warehouses.

In what is a bit of a late entry to the online office supply market, Costco Wholesale Corporation today officially opened a B2B online shopping site to appeal to medium-to-large sized businesses.

“The decision to release now was not a marketing one,” says David Sinegal, Vice President of Costco Business Center Operations. “Costco has always been very intentional and cautious with what we do and we want to make sure we protect our corporate branding first and foremost by virtue of providing a very reliable, solid, grounded product offering to our members. It was more important to us to figure it out and make sure we got it right rather than being first in.”

The site allows businesses throughout the United States to shop Costco’s business supplies and services and have products delivered via common carrier.

Additionally, Costco members in the greater Seattle, Los Angeles and San Francisco areas can select the site’s local delivery option and receive next-business-day delivery directly from the warehouse.

While Costco has always provided business centers and office supplies, the locations have been somewhat burdensome, as most are located outside of cities’ central business districts.

“Previously, members either shopped the walk-in warehouse or placed orders for delivery via phone or fax,” said Sinegal. “We expect our online site to provide our members a faster and easier method of shopping for all their business products.”

The B2B site resides on the costco.com homepage along with the consumer portal, which Sinegal believes will bring in additional revenues.

“People who are using the business property, their gateway to the business property is through the Costco.com, or the consumer side,” said Sinegal. “There will be a lot of incidental or impulse purchases at costco.com as people are navigating to do their business shopping and vice-versa.”

Costco entered into the e-commerce space in 1998 with the launch of their consumer online catalog.