CommerceHub, Costco Extend Relationship for Supply Chain Support

Retailer uses Drop-Ship Master suite to streamline fulfillment of online orders

Retailer uses Drop-Ship Master suite to streamline fulfillment of online orders

Albany, NY — August 2, 2005 — Costco, a leading international operator of membership warehouses, said it will expand its contract with fulfillment and integration solutions provider CommerceHub to continue support of the company's United States and operations.

The extension is a result of the successes Costco has achieved to date through use of CommerceHub's drop-ship supplier integration and fulfillment solutions.

Under the terms of the agreement, Costco will continue to use CommerceHub's Drop-Ship Master application suite to integrate new suppliers and streamline the fulfillment process for online orders. By enabling suppliers to fulfill orders directly based on requirements established by Costco, Drop-Ship Master allows the company to expand its online product selection and revenues without taking on any new inventory or risk. CommerceHub provides Costco with a single point of integration with all of its suppliers and complete visibility into online orders through the delivery process.

By extending our relationship with CommerceHub, Costco will continue to move forward with aggressive plans for expansion of our dot-com offering in the United States, Canada and overseas, as well as stay true to our commitment of providing exceptional service to our customers, said Mike Pollard, vice president of CommerceHub is one of the most forward-thinking companies in the retail supply chain arena, and, based on the outstanding results we have achieved with the DropShip Master product to date, we are excited to extend this partnership to further grow our business.

We are thrilled to continue our work with Costco, said Frank Poore, president and CEO of CommerceHub. Over the years, we have had an extremely successful relationship with Costco and will continue to provide enhanced capabilities and tools that will help the company accomplish their business objectives, meet customer demand and achieve a competitive advantage in the marketplace.

Costco Wholesale Corp. operates an international chain of membership warehouses, mainly under the "Costco Wholesale" name, that carry brand name merchandise at lower prices than are typically found at conventional wholesale or retail sources.

Costco currently operates 456 warehouses, including 336 in the United States and Puerto Rico, 65 in Canada, 16 in the United Kingdom, five in Korea, four in Taiwan, five in Japan and 25 in Mexico. The Company also operates, an electronic commerce Web site.

The warehouses are designed to help small-to-medium-sized businesses reduce costs in purchasing for resale and for everyday business use. Individuals may also purchase for their personal needs.

For more information on the latest trends in the fulfillment space, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.