Razor-Razorblade Model


DEFINITION of 'Razor-Razorblade Model'

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.

BREAKING DOWN '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.

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  1. What is the Razor/Razorblade model?

    The Razor/Razorblade business model owes its name to one King Gillette, founder of the eponymous razorblade company. The ... Read Full Answer >>
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    The difference between product bundling and product lines is a product line is a group of related products manufactured by ... Read Full Answer >>
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