More than 20 years after Costco opened its first warehouse club store in Seattle, Washington, the company’s philosophy can still be summed up as “pile ’em high, price ’em low.” Costco stores are anything but fancy; in fact, the first store was located inside a warehouse. Yet nearly 50 million consumers and small-business owners pay $50 (fee may vary) annually so they can save on everything from mayonnaise, wine, and prescription medicines to handheld computers, truck-size snow tires, and fine art. In fact, customers never really know what products they will find each time they visit one of the 529 Costco warehouse stores around the world.

1. How would you classify Costco as an in-store retailer? Why?
2. How is Costco’s strategy different from that of Sam’s Club?
3. Evaluate Costco’s objective of achieving a 14 percent profit. Justify your answer.