Razor-Razorblade Model

What is the ‘Razor-Razorblade Model’

The razor-razorblade model is a business tactic involving the sale of dependent goods for different prices – one good is sold at a discount, while the second dependent good is sold at a considerably higher price.

Explaining ‘Razor-Razorblade Model’

If you’ve ever purchased razors and their replacement blades, you know this business method well. The razors are practically free, but the replacement blades are extremely expensive.

The video game industry is another user of this pricing strategy. They sell the game consoles at a relatively low price, recouping the lost profits on the high-priced games.

Further Reading

  • Merger Control in Times of Financial Crisis: An Expedient Instrument to Heal the Fledgling Economy or an Object of Abuse? – papers.ssrn.com [PDF]
  • Emerging business models for the open data industry: characterization and analysis – dl.acm.org [PDF]
  • Economic and Legal Aspects – www.sciencedirect.com [PDF]
  • The new break-even analysis: it's time to expand the scope and assumptions of the traditional break-even analysis – go.gale.com [PDF]
  • Chance or burden? A study of sustainable business models within the automotive industry: An empirical analysis of BMW Group and Volvo Cars Group – www.diva-portal.org [PDF]
  • Tempest in a K-Cup: Red Flags on Green Mountain – meridian.allenpress.com [PDF]
  • Метафорическое моделирование финансово-экономических терминов METAPH ORICAL MODEL ING OF EN GLISH BUS INES TERMS – elibrary.ru [PDF]