Razor and blades model

razor and blades business modelfreebie marketingfree giftrazor/razorbladeat a lossfreebiesGillette modelrazor and bladesrazor and blades strategyrazor and blades" business model
The razor and blades business model is a business model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good, such as consumable supplies.wikipedia
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Business model

business modelsmodeloperating model
The razor and blades business model is a business model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good, such as consumable supplies.
The bait and hook business model (also referred to as the "razor and blades business model" or the "tied products business model") was introduced in the early 20th century.

King C. Gillette

King GilletteGilletteGillette−Brown Ranch
Although the concept and its proverbial example "Give 'em the razor; sell 'em the blades" are widely credited to King Camp Gillette, the inventor of the disposable safety razor and founder of Gillette Safety Razor Company, Gillette did not originate this model.
Gillette is widely credited with inventing the so-called razor and blades business model, where razors are sold cheaply to increase the market for blades, but in fact he only adopted this model after his competitors did.

Kodak

Eastman KodakEastman Kodak CompanyEastman
In its decades as the dominant photographic film producer in the United States, Kodak sold its cameras at low prices and enjoyed large profit margins on the consumables of the trade, such as film, printing supplies, and processing chemicals.
From the company's founding by George Eastman in 1888, Kodak followed the razor and blades strategy of selling inexpensive cameras and making large margins from consumables – film, chemicals, and paper.

Inkjet printing

inkjet printerinkjetink jet
For example, inkjet printers require ink cartridges, and game consoles require accessories and software.
A common business model for inkjet printers involves selling the actual printer at or below production cost, while dramatically marking up the price of the (proprietary) ink cartridges (a profit model called "Freebie marketing").

Consumables

consumablesoft goodsnon-repairable
The razor and blades business model is a business model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good, such as consumable supplies.
Printers and ink cartridges are an example, as are razors and blades, which gave this business model its usual name (the razor and blades model).

Loss leader

loss-leaderloss leadersat a loss
It is distinct from loss leader marketing and free sample marketing, which do not depend on complementary products or services.
Freebie marketing

Safety razor

razorsButterfly Safety RazorsDisposable Razor
Although the concept and its proverbial example "Give 'em the razor; sell 'em the blades" are widely credited to King Camp Gillette, the inventor of the disposable safety razor and founder of Gillette Safety Razor Company, Gillette did not originate this model.
Double-edge (DE) safety razors remain a popular alternative to proprietary cartridge razors, and usually offer significantly lower total cost of ownership since they are not marketed under the "razor and blades business model".

Vendor lock-in

lock-inproprietarylocked into
Methods of vendor lock-in include designing the cartridges in a way that makes it possible to patent certain parts or aspects, or invoking the Digital Millennium Copyright Act to prohibit reverse engineering by third-party ink manufacturers.
Razor and blades model

Aftermarket (merchandise)

aftermarketafter-marketafter market
Aftermarket (merchandise)
The most well-known aftermarket strategy model is "Gillette’s razor and blades business model" also known as "freebie marketing" whereby a product is largely discounted or even free as a loss leader in order to increase the sales of its complementary goods.

Product churning

churnproduct churn
Product churning, selling more product than is beneficial to the consumer
Product churning is similar to the razor and blades business model.

Product demonstration

Demodemonstratordemos
Demo, an event in which free samples of a product are distributed
Freebie marketing

Product bundling

compilationbundledbundle
Product bundling, offering several products for sale as one combined product
Freebie marketing

Complementary good

complementary goodscomplementscomplementary
The razor and blades business model is a business model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good, such as consumable supplies.

Product sample

free samplesfree samplefreebie
It is distinct from loss leader marketing and free sample marketing, which do not depend on complementary products or services.

Urban legend

urban mythurban legendsurban myths
The urban legend about Gillette is that he realized that a disposable razor blade would not only be convenient, but also generate a continuous revenue stream.

Standard Oil

Standard Oil CompanyStandard Oil TrustStandard Oil of New Jersey
With a monopoly in the American domestic market, Standard Oil and its owner, John D. Rockefeller, looked to China to expand their business.

John D. Rockefeller

RockefellerJohn Davison RockefellerJohn Davison Rockefeller Sr.
With a monopoly in the American domestic market, Standard Oil and its owner, John D. Rockefeller, looked to China to expand their business.

Kerosene lamp

paraffin lampkerosene lampskerosene lantern
Representatives of Standard Oil gave away eight million kerosene lamps for free or sold them at greatly reduced prices to increase the demand for kerosene.

Kerosene

paraffinparaffin oilkerosine
Representatives of Standard Oil gave away eight million kerosene lamps for free or sold them at greatly reduced prices to increase the demand for kerosene.

Catchphrase

catch phrasecatchphrasessignature phrase
Among American businessmen, this gave rise to the catchphrase "Oil for the lamps of China."

Alice Tisdale Hobart

Alice Nourse
Alice Tisdale Hobart's novel Oil for the Lamps of China was a fictional treatment of the phenomenon.

Oil for the Lamps of China

novel of the same name
Alice Tisdale Hobart's novel Oil for the Lamps of China was a fictional treatment of the phenomenon.

Comcast

Comcast XfinityComcast CorporationXfinity
Comcast often gives away DVRs to its subscribing customers.

Digital video recorder

DVRPVRpersonal video recorder
Comcast often gives away DVRs to its subscribing customers.