Resources | Customer Success | February 22, 2021

Costco Wholesale Increases Investment Yields While Helping Suppliers

Costco finds a mutually beneficial solution for suppliers by using C2FO’s dynamic discounting solutions.

As the world’s third-largest retailer and a Fortune 500 company, Costco Wholesale is a multi-billion-dollar organization that operates warehouse club operations across the globe, and maintains a rich and diverse global supply base.

In recent years, Costco recognized a challenging working capital environment. Specifically:

  • The loan environment for SMBs had been difficult since the financial crisis
  • Sources of cash and other alternatives were expensive for Costco suppliers
  • Costco’s investment yields on treasuries, commercial paper and bonds were at all-time lows 

This case study illustrates Costco’s strategy in providing a working capital solution for its suppliers, the criteria Costco used to choose C2FO and the overall results generated.

The challenge

In seeking a new finance program for its suppliers, Costco had the following goals:

  • Improve supplier relationships while reducing costs and risks throughout the supply chain
  • Use working capital in a more efficient manner
  • Reduce internal costs and improve returns on short-term investments 
  • Minimize the use of internal resources and generate a fair return on cash
  • Provide a program that appeals to most suppliers and meets their funding needs

After exploring options that included invoice factoring and creating an internal program, Costco chose to move forward with a dynamic discounting solution with C2FO.

The solution

The Costco Early Payment Program through C2FO enabled suppliers to accelerate payment on invoices that they selected, at discounts that worked for them. With the goal of creating a win-win for Costco and its suppliers, the C2FO digital platform allowed suppliers to easily participate and take greater control of their cash flow. They could utilize C2FO to receive early payment from other customers as well. 

The results

  • Within five years, early payments to Costco suppliers through C2FO grew a cumulative 186%.
  • Costco suppliers that use C2FO receive early payment by an average of 22 days.
  • Supplier participation in the Costco Early Payment Program continues to increase, most recently growing by 141% year over year.
  • The program has generated billions of dollars in capital flows for Costco suppliers while providing Costco with significant income generation, increased gross margin and a 400 to 500 bps increase in treasury yield.

Success Snapshot


With C2FO, Costco is able to strengthen its supply chain and put its cash on hand to better use.

Case Study PDF

Why C2FO?

C2FO delivered quick results while making it easy for suppliers to use the service.