Costco launches long-awaited e-commerce site with free shipping

Costco launches e-commerce offering
Patrick Noone, country manager for Costco Australia

Costco Australia on Wednesday launched its long-awaited e-commerce site, nearly two-and-a-half years after the retail giant first revealed plans to do so.

Costco members can now buy a wide range of items online and have them delivered for free to their door.

The product categories available at launch include electronics, kitchen and laundry appliances, home and furniture, BBQs and outdoor living, home improvement, sports and fitness equipment, jewellery and watches, wine and spirits, clothing, luggage and handbags, and there are plans to add new categories going forward.

Patrick Noone, country manager for Costco Australia, said the company would introduce grocery, food and fresh products at a later date.

Most of the items available online are unique to the items stocked in Costco’s bricks-and-mortar warehouses. This is designed to give members additional value, Noone said.

“Online shopping is an additional benefit to a cardholder’s membership and should complement the warehouse offering,” he said.

Costco does not currently offer national delivery for every product it sells online. Medium and large items, such as large TVs, only ship to metropolitan areas on the East Coast. Small items can be shipped anywhere in the country.

“We will expand the delivery zones as we grow and will advise members as we open up delivery zones,” Noone said.

Costco Australia’s total revenue for the year ended September 1, 2019, was $2.2 billion, according to documents lodged with the corporate regulator, 18.5 per up on its $1.8 billion result in FY18.

Gross profit was $264.4 million in FY19, but operating profit – gross profit minus general and administrative costs – was $31.8 million, down from $33.4 million in FY18, due to the cost of sales increasing faster than revenue.

Profit after tax for the period was $25.5 million, down from $29.5 million in FY18.

Costco currently has 11 warehouses in Australia, with an additional two confirmed under construction and one underway in New Zealand. The company, which is based in the US, has 785 warehouses around the globe to date.

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