Costco has a shopping service most members don’t know about

Costco did not even sell merchandise on its website until 1998, and, in those days, the selection was very limited.

As a long-time member, I used the website for things like Costco Travel and some of the ancillary services the warehouse club sells, like TurboTax access, but rarely bought anything there until much more recently.

Now, Costco has a greatly expanded selection, and it allows members to use Instacart and Shipt to order select items directly from its warehouses. It's also building on that with its digital-only program, Costco Next that gives members access to items the warehouse club does not stock.

It's not a new service; it has technically been around since 2017, but Costco does not promote the offering, and it's something that many other members and I did not know about.

In fact, I only learned about it because the chain started mentioning it during earnings calls, which most members do not listen to or read transcripts of.

A third-party marketplace, a model pioneered by Amazon, Costco Next offers an expanded selection of items that never make it into a Costco warehouse. The program, however, does differ from what Amazon does in some important ways.

Costco's website timeline

• April 17, 2001: Costco expands online with a B2B e‑commerce site aimed at business customers, accessible through the main Costco.com site, according to a 2001 Costco earnings release.
• 2017: Costco partners with Shipt for grocery delivery in select U.S. markets and expands same‑day and two‑day delivery options for members, reported SuperMarket News.
• During the COVID-19 pandemic (2020 to 2021): Online sales surge dramatically as consumer demand for non‑contact shopping grows. Costco’s ecommerce growth in 2020 surpassed the prior five years combined, according to the retailer's fourth-quarter 2021 earnings release.
• Costco's deal with Shipt ended in 2025, according to Costco's website, as the relationship was replaced with a partnership with Instacart.

"Our digital vision at Costco is to deliver a seamless experience that builds trust and loyalty with our members both in warehouse and online. We aim to make shopping at Costco easier, faster, and more personal, no matter where or how our members choose to shop. This isn't about technology for technology's sake," Costco CEO Ron Vachris said during the company's first quarter 2025 earnings call.

Costco Next is part of the chain's digital evolution

Costco Next allows the retailer to offer more merchandise, but having it shipped directly from partners. The warehouse club, however, is still careful with its merchandise, and its buyers work with the partner retailers.

It's a more carefully selected selection that the Amazon offers because Costco remains focused on offering value to members. The retailer has grown Costco Next from its modest beginnings.

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"Costco Next, our curated marketplace, also continues to show healthy year-over-year growth. In Q3 fiscal year 2025, our sales on Costco Next equaled our total sales for all of fiscal year 2022, and we are excited about the pipeline of new vendors and development for future rollout," CFO Gary Millerchip said during the company'sthird quarter 2025 earnings call.

• Costco Next is a curated third‑party marketplace that lets Costco members buy directly from select brands and manufacturers at discounted prices, without Costco holding all the inventory itself.
• Products are offered from hand‑selected suppliers chosen for the quality of their merchandise and strong customer service, expanding the variety beyond typical warehouse inventory:
• The platform helps Costco offer higher‑margin discretionary items (e.g., electronics, appliances, goods sold directly from vendors) while leveraging member pricing perks.
• According to strategic reports, Costco Next has become a scalable engine for high‑margin products, with estimated sales in Q3 2025 equal to Costco’s entire fiscal 2022 performance in that channel, AInvest reported.
• The impetus for Costco Next is to strengthen e‑commerce and mobile growth by offering discounted deals from trusted brands that complement warehouse inventory.
  Source: Costco's website

“Separate from what members will find in the warehouses or at Costco.com, Costco Next showcases products from some of Costco’s suppliers that have been selected for the quality of their merchandise and their exceptional customer service,” Costco General Merchandise Manager Cheryl Smeby said on Costco's website. “By shopping at Costco Next, you have access to a variety of products from these vendors, and you’ll get a discount that is available only to Costco members."

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Online marketplaces are growing

Costco is not alone in adding an online marketplace.

"Marketplaces are a relatively simple, low-capital way of expanding choice and widening audiences," GlobalData Managing Director Neil Saunders shared on RetailWire.

He believes, however, that it's not as simple as tacking on an online marketplace to an existing business.

"If they work, they can generate incremental revenue. But they are not surefire winners. Retailers need to make sure they don’t just cannibalize existing sales, and they cannot be used as an excuse to neglect the core proposition. And of course, there are now so many marketplaces that the strategy is not really a big differentiator," he added.

His Retailwire Brain Trust colleague, Jeff Hall, believes that online marketplaces are table stakes, but must be run with intent.

"They allow you to expand assortment, enter new categories, and test demand without tying up capital or taking markdown risk. Just as important, they attract new customers who often convert into higher value buyers of owned inventory," he posted.

Costco Next has been around since 2017, but the brand has never promoted it.

"Costco instead relies on its memberships and rotating selection of deals to do the selling for it, often through social media and word of mouth. Costco Next benefits similarly from this fear of missing out," CustomerThink.com shared.

The services launched with about 15 suppliers.

"There are currently over 90 brands included in the Costco Next universe. Some are familiar: Mikasa dinnerware, Dearfoams slippers and Thomas Kinkade Studios fine art. You’ll also find Artika lighting products, Baggallini accessories, Bench activewear, Cangshan handcrafted cutlery, Briggs & Riley luggage and Golden Arowana flooring, among others," Kiplinger reported.

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