King Camp Gillette did not invent disposable razor blades because he wanted to make shaving more convenient. He invented them because he wanted to make money continuously, from the same customer, indefinitely. The distinction matters. What Gillette understood, sometime around 1904, was that the real commercial asset was not the product a consumer purchased once — the handle, the device, the machine — but the consumable they would need to purchase again and again to make that product useful. He sold the handle cheaply. He made his fortune on the blades. Over the following century, this insight would be rediscovered, refined, and applied across industries so different from shaving that the connection to a safety razor is rarely obvious. The logic, however, is identical.
From Gillette to Inkjet: The Model Finds Its Natural Habitat
The razor-and-blade model achieved perhaps its most aggressive modern expression in the inkjet printer industry. The economics are, by now, reasonably well understood even by consumers who have never given them formal consideration: printers are sold at or near cost, sometimes below it, because the manufacturers’ margin lives almost entirely in the ink cartridges. A set of replacement cartridges for a mid-range home printer can cost more than the printer itself. This is not an accident of supply chain economics. It is the intended structure of the business.
Nespresso applied the same framework to coffee with considerable sophistication. The machines, designed with proprietary capsule formats, created a closed system in which continued use required continued purchasing from a single source. The capsules themselves were priced at a premium that bore little relationship to the cost of the coffee inside them. What consumers were paying for was not coffee — it was access to a system they had already invested in. Exit costs, in the form of an unusable machine, discouraged defection with quiet efficiency.
The Psychology of Lock-In
What makes the razor-and-blade model psychologically durable, beyond the obvious structural incentives, is the way it reframes the consumer’s relationship with cost. The initial purchase — the handle, the printer, the machine — feels like the significant financial commitment. It registers as a decision. The subsequent consumable purchases feel smaller and more routine, even when their cumulative total dwarfs the original outlay by a considerable margin.
Behavioural economists describe this as a form of mental accounting: consumers categorise expenses differently depending on their apparent nature. A one-time device purchase is evaluated against alternatives; a recurring small purchase becomes habitual expenditure, subject to much less scrutiny. Manufacturers who understand this dynamic price their entry products accordingly, accepting short-term margin compression in exchange for the long-term revenue stream that lock-in generates. The consumer who feels they got a good deal on the device rarely runs the calculation on what the device will ultimately cost them to operate.
The Model in the Age of Personal Devices
The same structure functions with predictable effectiveness in the segment of personal electronic devices. The device itself is priced accessibly; the ecosystem of dedicated refillable components generates consistent revenue for the manufacturer and sustained loyalty from the consumer. Switching costs are real: a user who has invested in a particular system, learned its operation, and developed preferences around its consumables faces a non-trivial barrier to adoption of a competing product. This is not accidental engineering — it is the deliberate architecture of a business model that has demonstrated its durability across more than a century of application.
What has changed in more recent iterations is the sophistication of the ecosystem itself. Modern razor-and-blade systems do not merely create dependency; they create community. Dedicated forums, compatibility guides, collective knowledge bases built around specific consumable formats — these generate social switching costs that compound the financial ones. Leaving the system means leaving the community that has accumulated around it. Gillette never managed that particular refinement.
What the Model Costs the Consumer
The razor-and-blade model is not inherently predatory, but it does require consumers to perform a calculation that its structure actively discourages.
“The question is not what the device costs — it is what the total cost of ownership looks like over two, three, or five years of regular consumable purchasing. That figure is rarely prominently displayed at the point of sale, and manufacturers have no structural incentive to make it easier to compute” – mentions Doctorvape.
Regulatory attention has increased in recent years, particularly around proprietary formats that prevent third-party consumable manufacturers from competing. The European Union’s push toward standardised charging ports is one expression of this concern; Right to Repair legislation addresses a related dimension. The underlying recognition driving both is the same: when a business model’s profitability depends on limiting consumer choice after the initial purchase, the interests of producers and consumers are not aligned in the way that functional markets are supposed to guarantee. Gillette’s insight was genuinely brilliant. Whether brilliance of that particular kind deserves a century of unchallenged application is a different question entirely.
