Business Models
Razor-and-Blades Model
Also Known As Freebie Marketing
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The razor-and-blades model is a pricing strategy in which a durable base product is sold cheaply, or even given away, to lock customers into repeat purchases of a proprietary complementary consumable at a higher margin. Classic modern examples include inkjet printers and their cartridges and single-serve coffee machines and their pods. The model is popularly, but inaccurately, attributed to King Camp Gillette and the safety razor: Gillette's own razors were expensive when first introduced, and it was his competitors who invented the razor-and-blades pricing pattern after his patents expired.
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Origin YearOften miscredited to King Camp Gillette's safety razor, patented 1904; Gillette's own pricing did not in fact follow this pattern, and it was competitors who began the razor-and-blades pricing pattern after his patents expired in the 1920s. Core MechanismThe base product is priced at or below cost to drive adoption, while the ongoing proprietary complementary good is priced with a high margin to capture profit over the lifetime of the customer relationship. 1 Cross-Tradition Connections
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The razor-and-blades pricing pattern is popularly, though inaccurately, attributed to Gillette and its safety razor; Gillette's own early razors were priced at a premium, and competitors invented the loss-leader-razor, profit-margin-blade pattern only after his patents expired around 1921.
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