Skype: Gillette's Razor and Blade Business Model Telephonized
In this topsy-turvy world, Skype represents the competitive extreme, wielding a weapon that few others are willing or able to match: Using peer-to-peer architecture, it claims it can offer its software service for free to tens of millions of people, and still make boatloads of profits by persuading only a fraction of its users to upgrade to paid premium services.For those unfamiliar with Skype, it is a peer-to-peer software program that enables users to use existing landlines and computers to make phone calls for next to nothing, using Voice-over-IP technology.
Skype offers the software for free yet makes money off of additional services; just as King C. Gillette did by offering safety razor's at reduced prices and profit off of the replaceable blades (a 'loss-leader'). Note: Robert X. Cringely suggests that it may or may not be the same case for Apple and iPod/iTunes.
Comments (10)
Andrew
I always think that razor blades are a very poor example of the "razor-blade model". The thing about a safety razor handle is that it's just a small stick. It's sold cheap because it's cheap to manufacture. The blades are made of higher-quality materials and need finer manufacturing techniques, and are bound to be most of the expense.
Published: March 18, 2005 10:06 AM
Gary
I wish I could find a supplier of cheap Gillette mach 3 blades, someone out there in computer land has them cheap, I wish i could find this person, I would buy them by the truck load if the price was right, please help me with this if you can. Call me at 423-837-5527 or e-mail me at sniff96@charter.net
Published: June 10, 2005 3:19 PM
zaph
Just grow a beard, man.
Published: July 4, 2005 10:57 AM
Robert
I agree with Andrew. Also it is not accurate to say that Gillette sold the razor at a reduced price. The first Gillette razors were silver-plated and sold for $5.00 in 1904, equivalent to about $20 today. Not cheap. Of course, during the depression they did reduce the razor price, but they had lots of competition after their 1904 U.S. patents expired.
Published: November 27, 2005 8:11 PM
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Published: November 13, 2006 11:39 AM
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Published: February 28, 2008 5:39 AM
Tom&Dick
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Published: May 29, 2008 8:28 AM
Tom&Dick
We are JinJiang Forever Hardwear Craft Co., Ltd. in China. We supply Gillette Mach3; Gillettle Match3 Turbo; Gillette M3 Power ; Gillette Fushion and Gillette Fusion Power with good quality and competitive price. please kindly visit our website :
Please contact us to know details.
Contact: Tom&Dick
Tel: 86- 595-88125698
Fax: 86-595-88125798
E-mail: gilletteblades8@gmail.com
Published: May 29, 2008 8:28 AM
Tom&Dick
We are JinJiang Forever Hardwear Craft Co., Ltd. in China. We supply Gillette Mach3; Gillettle Match3 Turbo; Gillette M3 Power ; Gillette Fushion and Gillette Fusion Power with good quality and competitive price. please kindly visit our website :
Please contact us to know details.
Contact: Tom&Dick
Tel: 86- 595-88125698
Fax: 86-595-88125798
E-mail: gilletteblades8@gmail.com
Published: May 29, 2008 8:30 AM
newson
go against the flow - perfectly good antique straight razors can be bought cheap. a modest outlay for a stone and strop, and the best shave in the world is yours, forever. i only have had to pay for shave soap and aftershave for the last twenty years. once you get your eye in, the straight shave can be quick, too.
check out the very active straight razor community at badgerandblade.com or straightrazorplace.com
Published: May 29, 2008 10:33 AM