How Starbucks Makes 1 000% Profit

And how you can implement their methods in your business

Altaaf Aboo
7 min readApr 6, 2021
Shutterstock

Coffee is a highly commoditized product. It can easily be made almost anywhere in the world with widely available ingredients at a very low cost.

Coffee has been around for hundreds of years. Like salt, sugar, and rice, once these products started being mass-produced, it was a race to the bottom for prices.

In business school, they’ll teach you not to enter industries like this because it would be difficult to make a profit. This was true for a long time until Starbucks changed the rules.

So how did they convince the world to pay $3 for a cup of coffee that costs less than 30c?

Starbucks employs a scientific method of selling their product. This science is called behavioural economics.

Behavioural economics is the study of how people make less than perfect decisions.

Let’s examine a few ways that they use this science and see whether we can apply it in our businesses.

The cups names are ingenious

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Altaaf Aboo

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