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> Costco comes to mind

That isn't a coincidence. According to[0] "The Everything Store"[1], the latest biography of Amazon, Bezos picked up the model for Amazon retail from Costco founder James Sinegal.

The first aspect was "value trumps everything" - where prices would be slashed and net margins thin. The second was the subscription model - Bezos learned that 70%+ of Costco's profit was from the membership fees. It was easier to charge a membership fee once and offer lower prices than it was to attempt to spread your profit margin across products and into the pricing.

Amazon slashed its prices and adopted the thin margin model in the future and then implemented Amazon Prime.

"The Everything Store" is a decent read, easy to flick through and some interesting cases and anecdotes within it. Ignore the negative reviews and give it a read if you haven't already.

[0] http://bobmorris.biz/what-jeff-bezos-learned-from-jim-sinega...

[1] http://www.amazon.com/The-Everything-Store-Bezos-Amazon-eboo...




Amazon Prime isn't an idea inspired by Costco's membership model, AFAIK. The idea came during Company's annual "Up the River" conference where Amazonians gather for a two-day brain-storming sessions.




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