Why Kirkland Signature Matters for Suppliers
Kirkland Signature isn’t your typical private-label line, and its role within Costco’s ecosystem continues to grow.
On Costco’s most recent earnings call, the company shared Kirkland Signature (KS) continues to outpace overall sales growth, with over 45 new KS items introduced last quarter alone. In a limited SKU environment, that expansion is even more significant than it may seem. Costco also highlighted several examples of lowering prices on KS items, underscoring its commitment to value versus national brands and rest of the market.
With Kirkland Signature penetration now reaching roughly 35% of sales – among the highest in club – the brand remains a strategic lever for member loyalty, margin stability, and tariff mitigation.
For brands and manufacturers, that scale and performance create both opportunity and complexity. Becoming a Kirkland Signature supplier can unlock meaningful benefits:
- Large, stable, repeat volume
- Long-term contracts and operational predictability
- Favorability with Costco when choosing national brand products for club assortment
- Potential to expand into Costco international regions
But it’s not a universal fit. The economics, production requirements, and long-term brand implications must align for the partnership to create mutual value – even when Costco initiates the conversation.
For suppliers where the fit does make sense, earning a KS program is highly competitive. It’s often a multi-year journey that requires thoughtful preparation, operational excellence, and a clear understanding of Costco’s expectations.
Based on our experience helping suppliers consider partnering on Kirkland Signature across categories, here are four best practices to help brands win (and keep) a successful Kirkland Signature program.
01 | Lead with Quality to Deliver True Value for Costco
For Costco, value begins with quality, not price. Costco’s expectation is that Kirkland Signature products meet or exceed national brands in performance and consistency, then deliver that quality at a better value for members.
As prospective suppliers, manufacturers and brands must prove that their quality holds up at Costco scale. This means keeping value proposition rooted in superior quality rather than chasing a lower-cost, lower-spec product.
What Costco expects suppliers to demonstrate:
- Consistency at scale. Products should perform identically whether suppliers are producing 10,000 units or 10 million. Quality variance is a dealbreaker.
- Rigorous QC/QA processes. Audit results should be shared openly, demonstrating consistent, documented quality control.
- Historical quality metrics. Defect rates, return data, and audit outcomes should be available to prove a strong track record.
- Competitive benchmarking. Items should be compared directly to leading national brands on the attributes that matter most to Costco members.
- Raw material cost management. Suppliers should show how they handle price swings in raw materials during market spikes while protecting both product quality and Costco’s cost stability.
Key Takeaway: For Costco Kirkland Signature, a lower price doesn’t justify lower quality. Proposals should clearly tie superior quality to long-term member value.
02 | Build an Efficient and Transparent Cost Structure
For private label, Costco expects open-book costing and a joint-venture mindset. A supplier’s cost story should make it easy for Costco to understand how value is created and how that value will be protected over time.
What Costco expects:
- Open-book costing. Suppliers shouldn’t walk in with just an end quote; they should bring a full cost model that breaks down materials, labor, packaging, freight, and margin.
- Long-term price stability. Suppliers should be prepared to discuss the levers they can pull to maintain pricing over time: ingredient alternatives, production line efficiencies, freight optimization, and other strategies that showcase the suppliers experience and expertise in their field.
- Best price upfront. The first pitch should reflect the strongest sustainable offer; waiting for Costco to ask for a better cost risks losing to a competitor that led with their best position.
Key Takeaway: Transparent, efficient costing signals that a supplier is a long-term partner Costco can trust to deliver stable value for the member.
03 | Prove Operational Excellence and Reliability
Costco volume requirements are substantial. Before a pitch, suppliers should take an honest look at their operations to evaluate whether they can truly deliver what Costco needs, when Costco needs it, at the quality Costco expects.
Suppliers need confidence that they can meet Costco volume demands, maintain consistent packaging and pallet configurations at scale, and point to a clean, current audit history.
What to bring to the table:
- Production capacity plan. Maximum throughput, surge capacity, and contingency plans for downtime or production line issues should be clearly defined.
- Supply chain redundancies. Suppliers should be able to explain how they will ensure uninterrupted fulfillment even when disruptions occur.
- Complete documentation: COAs (Certificates of Analysis), spec sheets, safety certifications, traceability protocols, and current audits should all be ready to go before the first meeting.
Key Takeaway: Costco’s packaging standards, shipping requirements, or audit rigor aren’t to be underestimated. Falling short in operational areas can lead to major delays – or ultimately losing the opportunity altogether. Investing early in the certifications and documentation required is critical.
04 | Live Out Costco’s “Member-First” Philosophy
Kirkland Signature is built on Costco’s commitment to honesty, simplicity, reliability, and putting members first. As a prospective supplier, you need to show that your decisions start with what’s best for Costco members.
How to align with Costco’s philosophy:
- Act like a long-term partner, not an opportunist. A successful partnership can open doors to additional opportunities, including branded placement. Costco rewards partners who invest in the relationship.
- Be agile and collaborative. Teams should show willingness to co-create or adapt products based on feedback from the Costco buying team. Flexibility matters.
- Frame value around the member. Suppliers should clearly articulate how an item saves members money, improves the member experience, or beats national brands on metrics that matter.
Key Takeaway: The closer a supplier’s philosophy aligns to Costco’s member-first approach, the more credible they become as a Kirkland Signature partner.
What It Takes to Succeed as a Kirkland Signature Supplier
Becoming a Kirkland Signature supplier is difficult, but the rewards are significant. When Costco trusts a brand or manufacturer with the Kirkland Signature name, they gain access to large, stable volume, long-term predictability, and a powerful signal of quality across the market.
In summary, the suppliers who win and keep Kirkland Signature programs are the ones who:
- Deliver quality that consistently meets or exceeds national brands
- Build transparent, efficient cost structures
- Prove operational excellence and reliability
- Align tightly with Costco’s member-first philosophy
Key Takeaway: The suppliers that struggle usually underestimate the effort required to maintain the program and relationship – or treat Costco like a typical retail account.
Partner with a Team with Costco Experience
Harvest Group’s dedicated Costco team brings 200+ years of collective Costco expertise and direct relationships with key Costco stakeholders. We’ve helped both brands and manufacturers secure and support Kirkland Signature items across categories, and we understand what it takes to win and maintain these programs.
As an integrated commerce agency, we also connect your Costco strategy to the bigger picture—aligning in-store execution, digital commerce, and retail media to drive results across every touchpoint.
Whether you’re exploring what it would take to become a Kirkland Signature supplier or looking to scale an existing Costco business, we’re here to help. Visit our Costco page to learn more, explore our Kirkland Signature FAQ’s for a deeper look at supplier requirements, readiness, and expectations. Then fill out our Contact Us form to get the conversation started.
About the author: Steve Freeman is Vice President, Costco at Harvest Group, with 30+ years of experience partnering with Costco across regional and corporate programs. He has helped manufacturers grow both branded and Kirkland Signature businesses and brings a deep understanding of what it takes to win and sustain success in the club channel.