You’ve probably paid more for razor blade refills than you ever spent on the razor itself. That’s not a mistake. It’s the razor and blade business model designed to work exactly that way.
The razor and blades model is simple. A company sells you the base product cheap, sometimes even at a loss. Then it locks you into buying proprietary replacements that cost a fraction to make but a premium to buy. It sounds harmless until you do the math. The global razor blade market alone was valued at USD 2.37 billion in 2026, and shaving is just one piece of it.
What started with King C. Gillette over a century ago has quietly spread into dozens of industries: from printers to coffee machines to gaming consoles. The products changed. The playbook didn’t. And chances are, you’re feeding into it right now.
What Is Razor And Blades Model?
Razor and blades is a business model where a company sells the durable base product (Razor) at a low-profit margin or even losses and then sells the paired proprietary consumable goods (Blades) at a higher profit margin.
This pricing strategy is used to get customers to buy the initial product and then keep buying the consumables from the same company to keep using the initial product.
The idea is that once a customer has bought into the razor and blade model, they’re more likely to keep buying from the same company rather than switching to a competitor, as it will involve them repurchasing the base product.
Moreover, it is essential to note that the paired consumable goods (blades) are proprietary to the company and cannot be substituted with a generic good. This is important as it stops customers from switching to a cheaper alternative and keeps them locked into the company’s ecosystem.
Several large companies use this pricing strategy, including companies dealing in:
- Razor and blades like Gillette
- Playstation and video games by Sony
- Printers and Ink cartridges like HP
- Coffee machines like Nespresso
The History Of The Razor And Blades Model
A century ago, around 1895, King C. Gillette was turning to a frustrated inventor. After years of tinkering, he had failed to find a way to make a decent name for himself.
But one day, while shaving, he realised that the Star razor he was using was so worn it could no longer be sharpened. This gave him an idea. What if he could separate the blade from the handle and sell them as two separate items?
After a few years of development and with the inputs from William Emery Nickerson (who was the genius behind the idea of adding a protective strip to the blade), King C. Gillette finally launched his razor in 1901.
But the company didn’t see success immediately. In the first year, Gillette sold only 51 razors and 168 blades.
Gillette tried different marketing strategies like selling razors to the army at a discount, hoping soldiers’ habits will lead to razors becoming common household items. He also offered razors in bulk to banks, which they provided for free to their customers for every new deposit (“shave and save” campaign). These efforts proved helpful; by 1903, sales reached 91,000 razors, and the company sold more than 12 million blades.
The initial sales were heavily profitable as the razor was sold for $5 per piece and a dozen blades for $1. This was all because of the patent Gillette held. But once the patent expired, Gillette shifted to the razor and blade business model we know today: selling razors at a lower price and making up for it with blade sales.
How Does The Razor And Blades Model Work For Other Niches
Gillette pioneered it, but the razor and blades playbook didn’t stay in the shaving aisle. It spread: quietly, then everywhere. Today, some of the biggest brands you interact with use the exact same razor and blade logic: sell the base product cheap, profit from what keeps it running.
PlayStation
Sony didn’t make money when you bought a PS5. The console sat priced below cost, a loss leader play. Same bet Gillette made a century ago: price the razor low, then profit from the blades. Your games, subscriptions, and microtransactions kept the business running.
Then AI changed the math. Memory prices jumped 80-90% quarter-over-quarter in early 2026 as AI data centers consumed 70% of global memory output. Sony couldn’t absorb the hit. In March 2026, it hiked PS5 to $649.99, the Digital Edition to $599.99, and the Pro to $899.99. PlayStation’s president stated plainly: “we do not intend to sell hardware at significant losses.”
The console is now the profit center. PS5 sales fell 58% by May 2026. Sony is ending physical disc production in January 2028, pushing you to digital. The razor isn’t cheap anymore, and the blades are going digital-only.
HP Printers
You’ve probably seen a printer priced so low it felt like a steal. That’s the point. HP sells printers at or below cost and makes its real money from ink cartridges, which cost a tiny fraction of what you pay for them.
But in 2026, HP pushed the lock-in further. Multiple lawsuits accused HP of pushing firmware updates that silently block third-party cartridges from working, even when they function fine. A Canadian class action investigation is also underway. This isn’t just expensive ink anymore. It’s software updates making sure you can’t use anything else.
And yet, the cracks are showing. HP’s Q2 2026 print revenues were flat at $4.2 billion, and consumer printer sales dropped 10%. The company is cutting between 4,000 and 6,000 employees through fiscal 2028. HP still holds 39.7% of the ink cartridge printer market with $11.3 billion in supplies revenue. That’s a $22.94 billion market, and HP has spent 2026 making sure it doesn’t let go.
Nespresso
Nespresso took the same approach and wrapped it in luxury. You buy a sleek coffee machine at a reasonable price, but the machine is really just a gateway. The profit comes from the pods you keep buying.
The global Nespresso capsules market was valued at USD 8.25 billion in 2025. It is expected to reach USD 14.42 billion by 2035. But the lock-in depends on which machine you picked. Original machines have been an open ecosystem since 2012, with more than 50 compatible brands in the UK. Vertuo is different. Every capsule carries a barcode only Nespresso prints. No third-party pods.
Lavazza is pushing this further with Tablì, launching in the US in August 2026. It ditches capsules for compressed coffee tabs made entirely from coffee, backed by 15+ patents. The system targets Nespresso and Keurig while building its own proprietary lock-in. The razor-and-blades model keeps reinventing itself.
Razor And Blades vs Freemium Model
The offline “razor and blade model” can be considered the predecessor of the freemium business model, which is now commonly used by startups operating in the online space.
Developing on the razor and blade model, the freemium model offers a basic product or service for free in order to hook users and get them locked in. Once users are invested in the product or service, the company upsells them on premium features or plans offering more value.
The key difference between the two models is that with the razor and blade model, users need to keep buying the blades (or refills) in order to keep using the base product. However, with the freemium model, users can continue using the product for free, even if they don’t upgrade to the paid version.
The main benefit of the freemium model is that it allows companies to acquire a large number of users quickly. And because the users are already invested in the product, they’re more likely to convert to paid customers when presented with the opportunity.
The Reverse Razor Blade Model
You might think the razor and blade model only works one way: sell the base product cheap, then profit from the refills. But there’s a flip side, and it’s just as powerful.
The reverse razor and blade model flips the script. Companies charge a premium for the base product and make their margin there. Then they keep the ongoing costs, the consumables or services, low. It seems counterintuitive, but it creates a different kind of lock-in.
Apple is the prime example. You pay a high price for an iPhone. The hardware carries a significant margin. But the real stickiness comes from the ecosystem you buy into: App Store, Apple Music, iCloud, Apple TV+. The upfront cost gets you in; the services keep you there.
In Q2 2026, Apple’s Services revenue hit $30.98 billion, up 16.3% year-over-year: the highest March quarter ever for Services. Total revenue was $111.2 billion, up 17%. The hardware gets your attention, but the ecosystem is what keeps you paying month after month.
How To Use Razer And Blades Model In Your Business?
If you’re considering using the razor and blades model in your business, there are a few things to keep in mind.
First, understand that it’s not just a pricing strategy. Razor and blade is an entire ecosystem that you’re creating. This means that you need to have a strong understanding of your target audience and what they’re looking for.
Second, find your base product and dependent product. The business model (usual or reverse razor and blade) you’ll use will depend on which product is more essential to your customers.
Use the usual razor and blade business model if your base product is useless without the dependent product. It’s similar to a printer and ink or PlayStation and games.
However, if the dependent product is useless without the base product, use the reverse razor and blade model. An example would be iTunes without iPhone.
Third, you need marketing. The razor and blade model requires an extensive marketing campaign to attract customers and get them to buy your products. You need to give them a reason to buy your product over others.
The Benefits Of Razor And Blades Model
There are several benefits to using the razor and blade business model. Some are
- Recurring profit: Once the customer buys the base product, they need to keep buying the consumable goods, which means recurring profit for the company.
- Loyalty: Customers who use the razor and blade system tend to be more loyal to the company since they’re locked into the system.
- Higher margins: The base product is usually sold at a loss, while the consumables have higher margins. And since customers need to buy the consumables regularly, companies can generate higher profits.
- High customer retention: The razor and blades model also has a high customer retention rate since customers are locked into the system.
- Good upselling and cross-selling opportunities: Since customers are locked into the system, companies have good upselling and cross-selling opportunities. For example, a company selling razors can sell a premium range of blades or other products like shaving cream, aftershave, etc.
The Drawbacks Of Razer And Blades Model
The razor and blades model isn’t a guaranteed win. It comes with real risks. And in 2026, some of those risks are getting harder to ignore.
High Initial Investment
Building the base product and setting up distribution channels takes serious money upfront. You’re essentially paying to acquire customers before seeing any profit from blade sales.
System Reliability Risks
If the razor doesn’t perform well, nobody’s buying blades. One bad product launch can collapse the entire revenue engine you’ve built around it.
Constant Innovation Pressure
Customers get bored fast. Without regular upgrades, they drift toward competitors. And you keep spending on R&D just to hold your ground.
Subscription Fatigue
The subscription model that funds all that R&D is cracking. US adults spend an average of $111 per month on subscriptions, up from $90 in 2025. They waste $21 per month on subscriptions they don’t use. The average household juggles 11.2 active subscriptions and pays $219 per month. Yet 63% of consumers can’t estimate their own spending. When customers start trimming bills, razor services become easy targets. Active cancellation rates climbed to 47% in 2026, up from 31% in 2024. 52% of cancellers blame having too many subscriptions. The FTC restarted negative-option rulemaking in March 2026, adding regulatory risk to hard-to-cancel subscriptions.
DTC Competition Eroding Lock-In
Dollar Shave Club and Harry’s proved you don’t need a massive retail footprint to sell razors. Gillette’s market share dropped from 70% to 54% between 2010 and 2016. Lock-in that once seemed bulletproof started to crack. But Gillette fought back. P&G’s latest SEC filing shows Gillette still holds over 60% of the blades and razors market. The grooming segment lost 0.4 points of market share and volume dipped 1%. In March 2026, P&G committed roughly $1 billion to a new Gillette headquarters and R&D center in South Boston. Gillette’s grip is tighter than a decade ago, but the pressure keeps building.
Sustainability Pressure
Disposable plastic razors are falling out of favor. The sustainable personal care market is growing at 8.07% CAGR, far outpacing the razor market’s 2.6% growth. Consumers increasingly want eco-friendly alternatives. And the razor and blades model, built on disposable refills, struggles to keep up.
Bottom-Line?
The razor and blades model is over 125 years old. And it’s still very much alive. The logic King C. Gillette pioneered in 1901 now powers gaming consoles, coffee machines, printers, and entire digital ecosystems. Sell the base product cheap, profit from what keeps it running.
But the pressure is real. P&G’s full-year FY2026 grooming segment posted $6.9 billion in net sales. But volume fell 1%, organic sales were flat, and market share dropped 0.4 points. Volume grew in just one quarter all year. Still, P&G committed roughly $1 billion to a new Gillette headquarters and R&D center in South Boston. The company isn’t running from this model. It’s doubling down.
Sony is shifting PlayStation away from loss-leader pricing. HP faces lawsuits over firmware lock-in. Nespresso splits into open and closed ecosystems while Lavazza invents new proprietary formats. The razor and blades model isn’t dying. It’s evolving. The companies that reshape it around what you actually want will keep their edge.
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