Razor and blades

By Isaiah O’Connor

Today I discuss the basics of the razor and blades business model. This is the model where you give away or sell at a low price point even at or below cost to create a demand for a high margin item that you need to make it work. The model is from Gillette and is about selling relatively low priced razors, in order to hook the customer on buying the expensive blades. There are good and bad points to this model, and it is worth examining.

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