Michael GirdleyGirdley Enterprises, Girdley Enterprises, Inc. · Business builder and investor

The Rise of Gillette

Name: The Rise of Gillette
Uploaded: 2024-07-02T15:47:07+00:00
Duration: 52 s
Channel: Michael Girdley
Description: In this concise explanatory video, the narrator outlines the origin of King C. Gillette's razor-and-blades business model, where cheap or free handles…

2 Jul 2024 · 1 min

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In this concise explanatory video, the narrator outlines the origin of King C. Gillette's razor-and-blades business model, where cheap or free handles are sold while profit is made from proprietary, consumable blades. The speaker then draws parallels to modern companies that employ the same strategy: Microsoft sells Xbox consoles at a loss but profits from game sales; Amazon subsidizes Kindle hardware to drive ebook and subscription revenue; and Kodak historically sold cameras cheaply while making money on film. The video emphasizes that many businesses succeed by offering a loss-leading primary product to lock customers into a recurring, higher‑margin consumable, a concept pioneered by Gillette.

Chapters

Microsoft, Amazon, and Kodak stole their business from Gillette's razors? Well, here's how. So in the olden days, people only had this crazy thing to shave with, so they went to the barber 2 to 3 times a week. But that's super expensive and, well, it takes a ton of time. So a traveling salesman, a Mr. Gillette, invents the disposable razor blade, and he sells the handles virtually for free. But the handles only work with the blades he makes, Gillette razor blades, which is where he decides to make his money. Invest a small amount of money. So today, tons of companies copy Gillette's razor blade business model. Microsoft Microsoft loses money on Xbox consoles but rakes it in when they sell games. Amazon loses money on Kindles but sells people ebooks and subscriptions. Kodak did the same with the camera back in the day, making their money selling film. Sometimes businesses get rich selling one product at a loss to get you to buy a more valuable and profitable product from them. And it's all thanks to Mr. Gillette.