That Makes Cents: Shave Clubs Making Gillette Bleed

RBJBrian By RBJBrian, 3rd Jun 2015 | Follow this author | RSS Feed
Posted in Wikinut>Money>Money Saving Tips

In his latest installment of That Makes Cents, Brian discusses possible money saving opportunities out there when it comes to buying disposable razors. He compares three recent start-ups that are putting a dent in Gillette's business model forcing them to make changes of their own.

That Makes Cents Series

In free market economics, businesses try to get you to purchase as many products and services as possible, and as a consumer, you try and keep as much as your hard earned money as possible. In this article series, Brian looks at helping you to not separate you from your money, and to provide you with the best products and services at the lowest opportunity cost.

That Makes Cents: Shave Clubs Making Gillette and Bleed

The two powerhouses in the shaving industry, Gillette and Schick have been around in the world since 1901 and 1926, respectively. These are companies that essentially have worked on a business model that they practically gave a way the handles, and charged rather high rates for their razors. This is a model has worked for these two for a long time - over a hundred years for Gillette, and just shy of ninety years for Schick. In addition to this model for razors, it has also been applied to other models, namely the printer industry. I can remember a couple of times where I had essentially got a free printer, upon the purchase of a computer.

As a consumer, there were a couple options - pay the very high prices or purchase the cheap multi pack of razors and handles, often seen as an eight to ten pack at the dollar stores. A third option, I heard about at first on the Clark Howard Show, discussed how you can get more life out of your razors, by drying out the blades. The idea was that what wears the razors the most wasn’t their use, but rather the chemical reaction of the water and the metal. There were stories of people getting well over a year using the same razor, in what previously could have been just a couple uses. The savings there could easily move into the hundreds of dollars annually for frequent shavers.

However, over the past few years, there have been some new contenders that have threatened the old guard and the standards that have been established for several generations.

Dollar Shave Club - The Dollar Shave Club has been around since 2011 and in just three short years, it was reported that they already have a ten percent market share of the hand-held razer market. They have a multiple monthly options for their product. They have packages starting at one dollar (plus two dollars for shipping), to plans that go to six and nine dollars (shipping included) per month. Lastly, they also have some add-on products such as shave butter, post shave moisturizer, and flushable moist wipes.

Harry’s Shave Club - Harry’s offers similar products to the Dollar Shave Club, but also has packages that include starter kits of shaving cream/gel, handle, blades, and blade cover. To order additional products, the company has divided people into three categories - Everyday Shavers, Occasional Shavers, and Infrequent Shavers, which ship every two, three, and five months, respectively. In addition, they also have a ‘build your own plan’ option that includes the ability to chose how many (including zero), blades, shaving creams/gels, and aftershaves you need at whatever frequency (one, two, three, four, five, or six months) you desire. A standard order (eight blades, two creams) comes out to thirty-one dollars per order, and like previously mentioned, you can change the frequency to your needs. If you custom build, the unit price slightly increases. - promotes their products a little differently - specifically targeting their competition with letting the consumer know which product it compares itself to. For example, their three-blade men’s razor compares itself to Gillette Mach 3, the five-blade men’s razor compares itself to the Gillette Fusion, and the five-blade women’s razor compares itself to the Gillette Venus. The cost of the handles are each four dollars, and you have some options when it comes to purchase amounts and frequencies of blades. You can place an order to occur just once, or have it auto-fill every four months. You can also choose between a twenty-six or fifty dollar price plan. With the three-blade men’s razor, you get fifteen cartridges for twenty-six dollars, and thirty cartridges for fifty dollars. If you up it to either the men’s or women’s five-blade razor, you pay the same amount but you get twelve and twenty-four cartridges respectively.

Gillette’s Subscription Model - Now on Gillette’s website, they too offer a subscription model. They offer several of their products at various price-points - to numerous to discuss here. However, looking at the prices, they seem slightly more expensive when compared to the shave-club prices. Also, in addition to selling the product themselves (from the Proctor and Gamble website) Gillette also utilizes its retail partners of Target, Amazon, Sam’s Club and others as the distributer of their products. Also interesting is the fact that the price varies depending on which retailer you choose. For example, buying it from P&G’s website, gets you six blades for $29.50. but buying from Target costs $31.34 for eight blades (save 5% if you subscribe to have it auto-delivered at the frequency of your choosing).

After the Facts - The bottom line is that, as in most industries, competition is good. To have similar quality products for a lesser price is a good thing for consumers. It has already made the behemoth, Gillette change their business model to include these options for customers. As of right now, I don’t see Schick making the same “shave club” option, but if their market share falls as well, then I believe they will probably jump aboard, too. Regarding what Gillette is offering in competition - it is a little confusing - different prices from different retailers. After someone orders the product from one site, if they found that they got the same product for a higher price, they may not only be upset with the retailer, but with Gillette as well.

Personally, I use the single-blade razors that come in a multi-pack at the dollar store - I have found that if you dry the blades (which also works with the multi-blade models as well), you can get a long life (at least a few months) out of them. I learned on Clark Howard’s Radio/Podcast show, that it is moisture that tends to destroy the quality of blades, not the use itself. So if you dry your blades thoroughly after each use, you ought to get a lot more life of each blade. For a guy like me that shaves about every other day, I spend about a dollar per year, that’s right year, on razors.
So, what do you think? Are you a person who shaves daily? What type of blade do you currently use? Would you be willing to or have you tried any of the alternative ways to purchase blades? Be sure to contact me, and let me know!



Clark Howard, Money, Razor, Razor Comparisons, Saving, Tips

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author avatar RBJBrian
Co-Founder of | Historian | Gamer | Treker | Consumer Economist

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author avatar Retired
3rd Jun 2015 (#)

My husband had an electric razor.

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