Razor and Blades

Razor and Blades

Razor and Blades Jonathan Poland

The razor and blades model, also known as the bait and hook model, is a business strategy that involves selling a product or service at a low price or at a loss, with the goal of making profits from the sale of supplies or accessories that are required to use the product or service. The idea behind this model is that the initial product, such as a razor or printer, can be sold cheaply in order to attract customers, while the supplies, such as razor blades or ink cartridges, can be sold at a higher price.

The razor and blades model is often used in industries where supplies are highly specialized and customers are reliant on the original product in order to use them. For example, a printer manufacturer may sell printers at a low price, but make profits from the sale of ink cartridges that are specifically designed to work with their printers. This model can be effective when there are high barriers to entry and when customers are unable or unwilling to switch to alternative products. However, it can also raise concerns about competition and pricing practices.

Here are some examples:

  1. Printer and ink cartridges: Printer manufacturers sell printers at a low price or at a loss, with the goal of making profits from the sale of ink cartridges that are specifically designed to work with their printers.
  2. Razor and razor blades: Razor manufacturers sell razors at a low price or at a loss, with the goal of making profits from the sale of razor blades that are specifically designed to work with their razors.
  3. Gaming console and video games: Gaming console manufacturers sell consoles at a low price or at a loss, with the goal of making profits from the sale of video games that are specifically designed to work with their consoles.
  4. Mobile phone and phone service: Mobile phone manufacturers sell phones at a low price or at a loss, with the goal of making profits from the sale of phone service plans that are specifically designed to work with their phones.
  5. E-reader and e-books: E-reader manufacturers sell e-readers at a low price or at a loss, with the goal of making profits from the sale of e-books that are specifically designed to be read on their e-readers.
  6. Digital music player and digital music: Digital music player manufacturers sell players at a low price or at a loss, with the goal of making profits from the sale of digital music that is specifically designed to be played on their players.
  7. Toothbrush and toothbrush heads: Toothbrush manufacturers sell toothbrushes at a low price or at a loss, with the goal of making profits from the sale of toothbrush heads that are specifically designed to work with their toothbrushes.
Learn More
Innovation Metrics Jonathan Poland

Innovation Metrics

Innovation metrics are tools used to assess the innovation efforts of a company. It can be challenging to accurately measure…

Human Behavior Jonathan Poland

Human Behavior

Behavior is a pattern of actions or reactions that varies depending on factors such as context and mood. It is…

Business Scale Jonathan Poland

Business Scale

Business scale refers to the impact that a company’s size has on its competitive advantage. A scalable business is one…

Risk 101 Jonathan Poland

Risk 101

Risk evaluation is a crucial component of the risk management process. It involves assessing the potential impact and likelihood of…

Competitive Advantage Jonathan Poland

Competitive Advantage

Competitive advantage refers to the unique advantages that a firm possesses over its competitors. In a highly competitive industry, firms…

Work Quality Jonathan Poland

Work Quality

Work quality refers to the value or merit of the work that is being performed by an individual, team, or…

Real Estate Investing Jonathan Poland

Real Estate Investing

Real estate investing refers to the process of buying, owning, managing, and selling real estate properties for the purpose of…

Servant Leadership Jonathan Poland

Servant Leadership

Servant leadership is a leadership style in which the leader puts the needs of the team or organization above their…

Performance Objectives Jonathan Poland

Performance Objectives

Performance objectives are goals that individuals set for themselves on a regular basis, such as quarterly, semi-annually, or annually. These…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Brand Objectives Jonathan Poland

Brand Objectives

Brand objectives refer to the specific goals that a brand is working towards. These goals can be both long-term end-goals,…

Sales Management Jonathan Poland

Sales Management

Sales management is the process of overseeing and directing an organization’s sales team. It involves setting sales goals, analyzing data,…

Decision Trees Jonathan Poland

Decision Trees

Decision Trees are a popular machine learning algorithm used for both classification and regression tasks. They are part of a…

Eye Contact as a Skill Jonathan Poland

Eye Contact as a Skill

Eye contact is a fundamental component of communication and a crucial social signal in human interactions. This is why it…

Volatility Risk Jonathan Poland

Volatility Risk

Volatility risk is the possibility that changes in the volatility of a risk factor will lead to losses. Volatility is…

Risk Management Techniques Jonathan Poland

Risk Management Techniques

Risk management is the process of identifying, assessing, and prioritizing risks in order to minimize their potential impact on an…

What’s a GSA Contract? 150 150 Jonathan Poland

What’s a GSA Contract?

A GSA (General Services Administration) Contract, also known as a GSA Schedule or a Federal Supply Schedule, is a long-term,…

Prospecting Jonathan Poland

Prospecting

Sales prospecting is the process of identifying and researching potential customers for a business’s products or services. This typically involves…

Social Capital Jonathan Poland

Social Capital

Social capital refers to the networks, norms, and trust within a society that facilitate cooperation and coordination. It is the…