 |
Razors and Razor
Blades
A rip-off marketing technique? Decide for yourself!
Almost
100 years ago, brilliant industrialists and their marketers realized
that in many cases the "real" money didn't come from the
selling of the "big item" at a huge, one-time premium,
it came from the regular-as-clockwork sale of inexpensive, yet high-margin
support items necessary for the on-going operation or maintenance
of the "big" item. They learned first-hand that if you
practically give away the big item, the profit to be made on the
regular sales of the "little" support items can mean huge
profits.
No better example of this pricing strategy can be found than "Razors
and Razor Blades". Companies like Gillette, Wilkinson Sword
and Remington, to name but a few, made millions upon millions of
pounds (and continue to do so to this day), "giving away"
their razors (selling them at or below cost), so they could earn
the regular-as-clockwork profits on the sale of proprietary, patent-protected
razor blades.
This "give away the big item and just wait for the profits
to roll in on the proprietary support items" strategy is so
well known that it has come to be referred to as the “Razors
and Razor blade " pricing strategy. This pricing strategy works
better than ever with laser printers, plain-paper fax machines,
photocopiers and their toner cartridges. |
 |
| |
|
 |
 |
| |
 |
You would think that this
would have stopped companies using the "Razors and Razor Blades"
approach, but no! .. it is still a powerful technique and it still
works! On the whole companies rely on the natural inertia of their
customers. After all, consumables are purchased in relatively small
amounts, not like the initial capital investment. They therefore
are often subject to less control and it is easy for customers to
take the simple route and just order the branded supplies from the
original equipment manufacturer. (OEM) |
 |
| |
|
 |
 |
| |
|
Nowadays, the best example
of "Razors and Razor Blades" pricing takes place in the
laser printer, plain-paper fax and small office photocopier markets.
Industry estimates suggest that Hewlett Packard makes less than
£60 on the sale of a £600 to £1000 laser printer.
But the industry estimates also indicate HP looks forward to making
£600 to £1000 annually on the sale of toner cartridges
to that laser printer purchaser. Who wouldn't accept a small £60
profit on a big ticket item knowing that the chances of making another
£600 to £1000 in annual profit on that item are nearly
100%?
Actually in the UK about 85%! That is the current market share of
the OEM in the replacement cartridge market. Most of the rest of
the market is taken with remanufactured cartridges and compatibles
from other OEM’s. The use of TonerTopUps for customers to
refill their own cartridges with toner represents currently a tiny
part of the market. Of course neither the OEMs nor the remanufacturers
like the idea! Remanufactured cartridges are significantly cheaper
than OEM ones, and refilling a cartridge that is empty but still
good is significantly cheaper again. |
|
| |
|
|
|
| |
|
Cost is only a part of
the story though; the quality of printed output is of vital importance
to you. Fortunately that is firmly
in your own hands with the TonerTopUp approach. Every cartridge
will at some time fail and it is up to you to decide when the quality
becomes unacceptable. This will depend to some extent on the material
you print. A cartridge that is not up to a perfect standard for
pictures will often be quite acceptable for letters. At that stage
you can transfer any unused toner to another cartridge, if you wish
not to waste it. With remanufactured cartridges, you need to rely
on a decent guarantee from the supplier. Reputable ones will replace
any cartridges that fail to last for their full toner load.
The other part is convenience. For some cartridges a filler plug
is conveniently included in the design. Others require a screwdriver
or our special kit to melt a filler hole into the toner chamber
so you can pour in the toner. Once you have discovered how easy
it is to refill a cartridge you will probably never look back! You
have nothing to lose in trying it! If you would like more detailed
information you will find detail about your specific model of printer,
copier or fax machine on our product
selector page, and you can visit our refilling
instructions or Frequently
Asked Questions" page. |
|
| |
|
|
|
|
|
