Why Costco uses curiously large packaging for tiny products

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"10 inches wide by 11 inches high," Carrier said."If you walk through health and beauty, you will see a lot of [items] in that kind of envelope, so that is the very ideal Costco size."

There are three key reasons a supplier would not send a tightly packed pallet of two-inch jars of a fancy cosmetic: it's less stable on display, it would contain too many units for Costco to sell quickly, and it would be too expensive to put one in every store. Big packaging lets suppliers ship a more manageable number of items to a Costco warehouse using the requisite pallet system., even specializes in helping Costco suppliers break a single tightly-packed container of imported goods into as many as ten trucks loaded with dozens of presentable palletized displays.

 

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