Razor and blades model

Imagine you have a toy race car. You got it as a gift and you love playing with it. But, after a few days of playing, you realized that the batteries are running out. Your parents tell you that they need to replace the batteries to make the car work again. This is where the razor and blades model comes in.

The toy car is like the razor, and the batteries are like the blades. The razor and blades model is a business strategy where a company sells a product at a low cost, or even gives it away for free, to attract customers. Once the customers have the product, they need to keep buying additional products or services that support the first item.

The company that makes the toy car wants you to keep playing with it, so they give it to you at a very low price. However, they make money by selling you the batteries you need to keep the car running. You keep coming back to buy more batteries and the company continues to make money.

This model works best when the initial product has a long life, or when it requires constant replacement of a consumable item. Companies like Gillette use this model for their razors and blades. They sell their razors at a low cost or give them away for free, but make their money by selling the blades that need constant replacement.

In summary, the razor and blades model is a business strategy where a company sells a product at a low cost, or even gives it away for free, to attract customers. Once the customers have the product, they need to keep buying additional products or services that support the first item, creating a constant stream of revenue for the company.