If you sell the razor, don’t forget the blades

17May11

Anyone who has studied business or marketing is probably familiar with the razor-and-blade business model: you sell the durable item together with a starter supply of refills for a very low price, and then enjoy high margins on the subsequent refills once customers are hooked.

Yet despite the success of countless variants of this sales strategy, some retailers are doing it all wrong. For instance, I’ve seen both online and traditional retailers who sell popular dental care tools, yet don’t carry the refills that every buyer of those products will need sooner or later.

This oversight truly leaves money on the table. Just think about what a customer does when they need refills for a product: the first place most people would look is the retailer that they bought the product from to begin with. By failing to carry the refills, you’re throwing that loyalty back in their face, and forcing them to buy the refills from a competitor.

So if your retail inventory includes anything that resembles a razor in the razor-and-blade model, be sure to carry the consumables or refills, too. It’s good for customers, good for revenues, and especially good when it comes to maintaining the loyalty and brand equity that you’ve worked so hard to create.



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