Razor and Blades
Featuring King Gillette
Gillette practically gives away the handle, then sells you blades for the rest of your life. King Gillette invented the safety razor in 1901 and the model that came with it: sell the hardware cheap, sometimes at a loss, and profit on the proprietary refills that only fit it. The pattern spread everywhere. Inkjet printers ship at or below cost while the ink prints money at luxury-goods margins. Nespresso pods, priced per ounce, creep toward the cost of fine wine. The lock-in is the entire point: once you own the handle, walking away means throwing it out and starting over.
For founders and operators, this model looks like a license to print recurring revenue until someone figures out how to sell a compatible refill. Dollar Shave Club undercut Gillette on generic blades, grew fast, and sold to Unilever for around $1 billion. Right-to-repair movements and third-party cartridges have chewed at printer margins for years. The strength of the entire model rests on exactly one thing, and there is also an inverse version of it that runs the opposite direction. Which one you are actually running, and what protects the consumable, is what the app holds back.
Frequently asked questions
What is the razor and blades model?
The razor and blades model sells the core hardware cheap, sometimes at a loss, and makes its profit on the proprietary refills or consumables that only work with it. King Gillette pioneered it in 1901 by nearly giving away the razor handle and profiting on the blades for the rest of a customer's life. The lock-in is the entire point: once you own the handle, walking away means throwing it out and starting over.
What are examples of the razor and blades model?
Gillette is the original, selling cheap handles and profitable blades. Inkjet printers ship at or below cost while the ink prints money at luxury-goods margins, and Nespresso and Keurig sell machines cheaply to lock buyers into proprietary pods. Each pairs an inexpensive durable device with a recurring high-margin consumable that only fits it.
What are the risks of the razor and blades model?
The model looks like a license to print recurring revenue until someone sells a compatible refill. Dollar Shave Club undercut Gillette with generic blades, grew fast, and sold to Unilever for around $1 billion, while right-to-repair movements and third-party cartridges have chewed at printer margins for years. The whole model rests on protecting the consumable from cheaper substitutes.
How can founders apply the razor and blades model?
Founders should make sure the consumable is genuinely protected, whether through patents, design, or ecosystem lock-in, because the entire model's strength rests on that one thing. It is also worth checking whether you are running the classic version or its inverse, where the recurring item is cheap and the durable good carries the margin. CaseBook helps you decide whether this model fits your business, with an AI coach that reads your answer.