Razor/Blade business model design choices
Apple makes more money on the handle. HP makes more on blades (they even LOSE money on the “handle” – the printer). P&G’s Swiffer seems to make some money on both the handle and the blades. Gillette has TWO blades…the blade, and the battery….the list goes on
There are over twenty variations of the razor – razor blade business model. They’ve evolved over the 130 or so years since the original model was born.
So why do even the companies with most razor razor blade business model experience use only one or two of the 20+ variations?
Here’s a way to practice designing razor razor blade business models:
1. Think of a product that does not use a razor/blade model today. Can you redesign it so it has a reusable part (one that can be reused for a long time without failing, like a razor handle) and a consumable (a part that is essential but fails after some uses)?
2. Decide how many razor razor blade variations you can design to monetize your new product.
3. Design a razor/blade business model for a SERVICE