Who Founded Costco Wholesale Corporation?

Sol Price had a rule: never let the customer feel stupid for shopping with you. James Sinegal learned that rule working the floor at FedMart in San Diego as a teenager in the 1950s, then watched Price refine it into a business model at Price Club in the 1970s. By the time Sinegal was ready to start his own company, he'd spent nearly three decades absorbing a single idea — that retail could be built on trust instead of trickery.

Jeff Brotman was a different animal entirely. A Seattle attorney from a family with retail roots, he understood leases, zoning boards, capital formation, and the particular challenge of convincing landlords to rent 150,000-square-foot boxes to an unproven concept. Where Sinegal knew how to buy, display, and price merchandise, Brotman knew how to make the whole thing financeable.

They met in the early 1980s and recognized the complementarity immediately. Seattle in 1983 was a mid-sized city with a growing professional class, decent household incomes, and no warehouse club within easy driving distance. The first Costco opened on September 15, 1983, in a converted warehouse on Fourth Avenue South. It was not glamorous. Concrete floors. Fluorescent lighting. Products stacked on industrial shelving. No bags at checkout.

The bet was audacious in a way that's easy to forget now. Asking households to pay $25 per year (the original fee) just to walk through the door was bizarre in 1983. Grocery stores didn't charge admission. Department stores didn't charge admission. The only precedent was Price Club, which targeted small businesses rather than consumers. Sinegal and Brotman were asking suburban families to pay for the privilege of buying toilet paper.

It worked because the savings were immediate and visible. Members could see — on their very first trip — that a case of Coca-Cola cost 30% less than at Safeway. That a television was $200 below the department store price. The fee paid for itself in a single shopping trip, and after that, every subsequent visit felt free. By the end of 1984, Costco had nine warehouses and over 200,000 members.