3. Quality at the lowest possible price means value. Costco aims to sell quality merchandise at the lowest possible price, and "we call that value," Elliott says. "The way we do that is we buy in bulk and keep overhead low." In the marketplace, food items, for example, are typically marked up 20 to 30 percent, Elliott explains. "On average, our typical markup is 10 percent." The way Costco marks up less than others is because they have lower overhead using the warehouse model to sell their goods from the shipping pallets rather than unloading items, opening boxes and stacking items on shelves. "We drop a pallet on the floor," Elliott says, and it's typically a concrete floor. "The whole concept is based on volume. The more volume we can do the more we can save our customers.