The razor and blades business model[1] is a business model in which one item is sold at a low price (or given away) in order to increase sales of a complementary good, such as consumable supplies. It is different from loss leader marketing and product sample marketing, which do not depend on complementary products or services. Common examples of the razor and blades model include inkjet printers whose ink cartridges are significantly marked up in price, coffee machines that use single-use coffee pods, electric toothbrushes, and video game consoles which require additional purchases to obtain accessories and software not included in the original package.[1]
Although the concept and the catchphrase "Give 'em the razor; sell 'em the blades" are widely credited to King Camp Gillette, the inventor of the safety razor, Gillette did not in fact follow this model.[1][2]
- ^ a b c Martin, Richard (2001-08-06). "The Razor's Edge". The Industry Standard. Archived from the original on 2008-09-12. Retrieved 2008-08-01.
- ^ Picker, Randal C., The Razors-and-Blades Myth(s) Archived 2017-06-22 at the Wayback Machine (September 13, 2010). U of Chicago Law & Economics, Olin Working Paper No. 532. Available at SSRN: https://ssrn.com/abstract=1676444 or https://dx.doi.org/10.2139/ssrn.1676444