The best part is Costco’s annual membership fee is lower than the price of Amazon Prime. But what if that fee went up, as Costco hinted at in a recent call with analysts? The answer relies on Costco’s clever operational strategy, through which the fees support its lower prices. And Costco counts lots of fees — about 34 million individual members pay $55 a year, and 10.6 million business members pay $110. But the real story behind Costco’s success is its operating model and commitment to understanding how behavioral economics, or simple psychology, influence its members to buy more.

Source: Forbes January 12, 2017 21:38 UTC