In 1901, King Camp Gillette changed shaving and marketing forever, when he began selling a safety razor with disposable blades. The shaving innovation is obvious, the double edged razor was far superior to the straight razors wielded by barbers and serial killers of the era.
But the marketing genius was in Gillette’s thinking that by selling the razor itself for very little, the profit would come in the years of blade purchases to follow. It was the creation of the concept commonly known in marketing textbooks as the “loss leader”. Sell a customer a first product at a loss, to keep them coming back for the replacement product or accessory that will provide years of profits.
Fast forward to 2010, when the general thinking is that the arrival of Apple’s much vaunted iPad media tablet device would mean the death of Amazon’s well received electronic book (e-book) reader, the Kindle. As a Kindle owner, I pretty much had resigned myself to the idea, and bought an iPad thinking I would like pass my Kindle on to a family member or sell it on Ebay.
Until I realized that King Gillette gave Amazon CEO Jeff Bezos his long term solution to being the winner in the e-book battle. Forget about making money with the razor (that would be the Kindle) and focus on the blades (which of course would be the books).
Because Amazon has quietly made it possible to use it’s e-books on all of my favorite digital tools. With Kindle “apps” on Apple and Windows computers, along with the iPhone and now iPad platforms themselves, I can read my Kindle books on almost any digital platform I might be using.
And on each device, the e-books are synchronized, so if I stop reading on page 99 on one device, my e-book will “remember” where my place is and open up to that when I move to another device running the Kindle application (or the Kindle itself.)
Jeff Bezos doesn’t need advice from me on how to make more millions from Amazon.com, but if he did, I would tell him to start selling Kindles for as cheaply as he can, or maybe even give them away with a commitment to buy say $100 bucks in e-books over the next year or two.
Because once you start buying the blades, you find that you like the convenience when those blades…I mean ebooks, work in almost any razor out there. And you’ll probably keep using those “blades” over the perhaps more aesthetically pleasing (though pricier) ebooks from Apple’s new iBooks store–which of course Apple hopes will do for the publishing business what it’s iTunes platform did for the music business.
Because you always like having those invisible books available in more places than just one device, no matter how futuristic it might be.
Of course, one would also wonder if how King Gillette would feel if he were around today to learn that the latest razor blades to bear his name (for Gillette’s “Fusion” razor) cost near four bucks each!
Talk about a loss leader that leads to a premium for a close and smooth shave.