Costco has proven pretty popular in Japan. It’s so popular, in fact, that some stores have created an entire business out of reselling products purchased there.
However, according to some reports, it’s easier to start one of these stores than it is to keep it going. Here’s why these stores exist, why some resellers are struggling, and what others are doing to set themselves apart from the crowd.
The rise of Costco Japan
The Kirkland, WA-based Costco has made an international name for itself by selling bulk goods at discount prices. The chain is structured as a members-only warehouse, with individuals and businesses required to pay a small yearly fee for access. Frequent users can often earn this fee back via the store’s cashback rebate program or simply by saving money by purchasing items in bulk.
The chain arrived in Japan in 1999, with its first store in Kisaratsu City in Chiba Prefecture. It now has 36 stores across the country.
Costco has proven extremely popular here. It also ranks as one of Japan’s best hourly employers, paying higher wages than most home-grown Japanese businesses.
The chain is maybe a little too popular, though. As Nikkei reports, when the first-ever store in Okinawa opened last year, it was so busy that some customers had to wait four and a half hours to get in.
The birth of the Costco resale store
While popular, with only 36 stores, not everyone in Japan can easily get to a Costco. (For Tokyoites, the closest one is in Kawasaki, about a 30-minute drive from midtown.) Additionally, many regard the yearly membership fee as pricey.
Enter the Costco resale store.
Costco resale stores go back to at least 2019. One of the most successful is stockmart in Tokyo’s Shimokitazawa, which opened in 2020. stockmart opened a second Tokyo store in the city of Fuchuu in 2022 – which, according to Toyo Keizai, saw 300 people on its first day and had to close after it ran out of stock.
stockmart remains popular and currently boasts over 36,000 followers on Instagram. According to Costco tracking site Costco Johokan, there are currently 92 resale stores around Japan selling products featured at the store, particularly from the company’s well-regarded Kirkland Signature brand.
There are a few reasons these stores have become popular. First, they’re usually located in central urban locations that are easier to access for shoppers than a Costco warehouse. Second, they don’t require a Costco membership. The store has its own Costco membership and acts as a middleman between Costco and the public.
From a business standpoint, these stores are very easy to start. All they require is a Costco membership, a large vehicle, and retail space. Since nearly all the goods are sourced from a single location, new stores don’t have to spend months or years developing supply chain relationships.
You might be wondering: is this legal? Does Costco mind?
The answer is that Costco Japan is very much aware of the existence of the resale shops. As a wholesale warehouse, the company has no qualms about its goods being resold. The only stipulation is that the businesses don’t state or imply that Costco has an active business partnership with them.
The economics of Japan’s Costco resale stores
But how does this all work out economically? Are the stores a good deal for consumers? Do the stores actually make a profit off of this?
As to the first question, that might be in the eye of the consumer. Naturally, the items at a Costco resale store sell for more than you would pay for them at Costco. Some sites see an average 30% markup isn’t uncommon.
Take a 12-pack of Costco paper towels. These only go for about 2,698 yen (USD $17.82) from Costco itself. Given what you pay for paper towels at a Japanese supermarket, and given that said paper towels are usually garbage, that’s a screaming deal.
However, you’ll pay much more than that if you buy them from a resale store. E-Cost in Tokyo’s Hiroo, for example, is selling them for 4,280 yen. That’s a whopping 50% markup.
In this case, it still ends up being a good deal (IMO) given the product’s quantity and quality. And the plus side is you don’t have to buy a Costco membership and drive to go get it (which costs both time and gas). But there’s no denying it’s significantly more expensive than buying it direct.
The cost reflects the labor that goes into selling the product from a resale store. As Kyoto Shimbun reports, resale store operators have to drive to Costco— in the case of stockmark, this happens at least twice daily — to stock up on products. That’s a significant expenditure of both labor and gasoline. With gas costs climbing lately, resale stores have been forced to raise their prices even further.
It’s also not like the stores don’t have competition. On the one hand, they face competition from 3rd party resellers online, who can sell and ship Costco goods across the country.
On the other, they’re also competing against other wholesale stores in Japan. Chains such as Gyomu Super and Hanamasa also sell food and household items in bulk to both businesses and consumers – and without charging an annual fee. Both are also considerably cheaper than Costco resale stores.
So it’s not surprising that some stores are struggling to stay in business. Kyoto Shimbun reports that one local store closed in December 2024 after only one year. A quick search online of resale stores in Tokyo produces listings for some stores – such as Lés Costy in Jiyugaoka – that have since shuttered.
Some stores work to diversify
To beat the odds and stay afloat, some resale stores are offering unique services to set them apart.
Kyoto Shimbun highlights the store Cost9, run by liquor store Liquor Kitano. Cost9 uses its knowledge and connections with the alcohol industry to feature carefully-selected and hard-to-find brands of wine and Japanese sake—brands that buyers won’t find at Costco.
The store also offers a new service where it will buy items for customers by special request on one of its Costco runs. The service has apparently proven particularly popular with elderly residents.
Other stores, instead of selling items as is, break down the large Costco sizes into smaller packaging. This runs from selling individually wrapped portions of a large box of Ferrero Rocher chocolates to breaking down large bags of oatmeal into smaller and carefully-measured units.
Some stores say they already do good business due to their location. CoSmart, which offers over 600 items, says it’s also received feedback from senior citizens that they appreciate the service. Many seniors living alone don’t have family that can take them to Costco. Even if they did, walking around the huge warehouse would probably prove too demanding for them.
Yet another store, Re:STCO IWAKURA in Kyoto’s Sakyo Ward, says it does a brisk business because the nearest Costco is over an hour away. The store is also run by a real estate firm that owns the store’s building. That makes their rent zero, drastically reducing their overhead.
It sounds like some retailers get into the Costco resale business because they think it’s going to be easy. So it’s not surprising that some stores get weeded out pretty quickly. That aside, there’s obviously real demand for resale stores in the right locations that carry the right products. Given its appeal especially to elderly shoppers —and given that Japan’s population isn’t getting any younger—it sounds like that demand will continue into the near future.
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