Really Irritating Business Plans

Long time back, the Gillette Razor Company had a commercial suggesting one "change razor blades" frequently.  In fact, medicine cabinets often had a little slot in them where you could dump your old razor blades (into the wall???) so you wouldn't have to worry about cutting your arm off emptying the trash.  The razor itself was low cost.  The blades were the profit.

We ran into the "razor blade" business plan a lot in the 90s, first with faxes that required their special thermal paper and later with dot matrix printers with wildly expensive ribbons. Obviously your ink jet printer - the one on the shelf next to you - is an ink guzzler.

Now this coffee stuff. I can see some technological art in printers and ink (some!) and I once did a study of razor blades under electron microscopes (yes I did!) and it is a lot more difficult than you think let me tell you. Now we have a plastic coffee pod that costs 2 cents to make, 6 cents to fill, and a nickel to package up.  Add another $.15 to get it to the store and we are up to about $.25 each at the max.  The store price is about $.90/ea.

I think about that.  A lot.

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