An interesting piece of info I happened across on wikipedia

[Cygnus]

"an industry insider has claimed that the Fusion range of blades cost only $0.08 each to manufacture, yet sell for up to $3.52, a mark-up of more than 4,750%"

Now, it's a given that we'll never be able to prove the validity of this statement, but I want to hear your thoughts anyways.

 

[Loric]

I'd believe there is a giant mark up on them, I dont have a clue if its 4k or not though. Honestly, I'd rather give my mark up dollar to the wet shave community. We are lucky enough to have vendors/artisans with real quality products and amazing costumer service. After doing business with several wet shave businesses I'm more than happy to give back to this community.

 

[Cygnus]

agreed Even though I probably spend just as much as I do on wet shaving as I did when I used my fusion, it's for products that are high quality and well made.

 

[TheRuckus13]

Well saying the mark up is that high because the actual materials to make the cartridge is only eight cents is a little unfair. A lot of charges in anything that we buy comes from research and developement. Still a lousy product, however.

 

[xillion]

Here are links to the articles:

http://www.dailymail.co.uk/news/art...r-heads-cost-just-5p-make-sell-2-43-each.html

http://www.thisismoney.co.uk/bargains-and-rip-offs/article.html?in_article_id=487419&in_page_id=5

 

[Pinski]

It's absurd to think that a product mark up of 4,750% can exist anywhere.

But it's not absurd to think that a large company only pays $0.08 for a single piece of plastic that is mass produced.

And I now I've paid retail price for that item.

This only makes me think of one thing. I should get into the disposable razor business.

 

[honed]

Probably true.
But think of the massive amount of cash plowed down on marketing with big sport stars and so on. They must have an insane budget for marketing.
But it's needed, since they are selling a product far inferior to its alternatives, they really have to convince the masses good

And speaking of mark-ups, have you considered the mark-up on some of the colognes frequently discussed here?
Look at what Creed, Aqua di Parma et. al are charging for a small bottle of good-smelling alcohol.

Or what the "hyped" clothing brands charge for a shirt. A shirt made in the same Chinese factory that makes the shirt you can buy at Wal-Mart

 

[Eclectic]

I even have this in my signature here.

 

[dpm802]

Shipping, distribution, warehousing, marketing, packaging, taxes, tariffs, obamacare, and oh, some profit.
Price is probably fair.
Brent.

+1 ... despite the low cost to manufacture and the high cost to sell, its not all pure profit. The cartridge passes through several hands on its way to the consumer, and each stage of the channel has its own overhead and costs to contend with. And I don't blame anyone along the line for trying to make a profit.

If you were to break down the raw costs of just about anything you buy nowadays, in any industry, you'll find that 4,750% markup isn't that unusual.

 

[Drubbing]

Media loves to provide only part of the story to max out the headline.

But 4000% leaves plenty of room for a healthy profit. If they can afford a pre tainted Tiger and others, they're making plenty. They're selling what most men want; speed and convenience, and they deliver, for a price.

A local forum I visit has DE fanatics wanting to convert carts users, but they're just not interested in the main. They see people who put an effort in shaving as just plain freaky.

Gillette's market isn't going anywhere in a hurry, even though they're in a hurry...

 

[gsurko]

Why is it important what the profit margin is? You don't have to buy their stuff.

 

[DE Shaver]

Pricing has less to do with production cost and more to do with profit maximization. Its about what the market will bear

 

[Speedwell68]

As the article is from the Daily Mail I am going to have to take the information presented with a massive pinch of salt. The Daily Mail have never been known to let the truth get in the way of a good story. Although it doesn't take a rocket scientist to realise that P&G have a hell of a mark up on most of their products, that is why I try not to buy them.

 

[knlgskr]

Always buy what u need, sometimes buy what u want, don't buy what u don't want or need.

When products compete which improves; the products or the advertising?



"Great place to live/picnic, all these insects couldn't b wrong."

 

[MASSDRIVER]

Just to stir it up some, think how bad we are getting ripped off on regular blades.
If it only costs .08 cents to make an assembly consisting of many highly machined, high tolerance cutting edges, with expensive platinum and polymer coated surfaces, mounted precisely in a plastic holder with stainless metal clamps, micro urethane rubber strips, and a reverse-mounted blade encased in a locking device that has to precisely accept a handle everytime, it must cost almost zero cents to just stamp a blade, sharpen it(which is easier since it is larger) wrap it in paper, put it in a cheap cardboard box with minimal printing and send it off.
If the same ratio were used for cost-to-profit, I suspect a DE blade should only cost about 13 cents for a 10 pack.
Remember too, we are talking about their premium product. The cost of the mach 3 keeps going down and is available. I saw packs of green and grey version for 2 dollars and a value outlet last week. Some product just doesn't sell well even though it is the same basic thing.
Brent.

 

[Saturn]

And speaking of mark-ups, have you considered the mark-up on some of the colognes frequently discussed here?
Look at what Creed, Aqua di Parma et. al are charging for a small bottle of good-smelling alcohol.

Or what the "hyped" clothing brands charge for a shirt. A shirt made in the same Chinese factory that makes the shirt you can buy at Wal-Mart

That's true, in a way. A lot of industries have high markups to maximize their profits. But the markup on razor cartridges can make a person feel especially ripped off, far more than for colognes or designer clothing, for a couple of reasons: 1) colognes and designer clothing are luxuries, whereas shaving is fairly universal; 2) a bottle of cologne or an item of clothing is a one-time investment (which will typically last quite a while), whereas razor blades have to be changed constantly, so that using a cartridge razor feels a lot like subscribing to a Gillette service with a monthly fee.

I don't really blame them for the high markup, though. The market obeys its own rules and companies will always try to maximize profits, and getting upset over it or expecting/demanding that they ought to price their products more "reasonably" is the most useless kind of thinking.

 

[DavyRay]

As a consumer, I don't really care what their material cost is. I will look at the retail offer. If I don't like it, I just may look for an alternative.

I am preaching to the choir here, I know.

 

[sodajerk]

Reading this causes me to think what I've read for years about the markup on eyeglasses and what wedding photographers charge. On paper, the markup makes them look like folks are rolling in money but the truth is most are closer to starving! )

It's like they say - if it was that easy, everybody would be doing it!

 

[ditothegreat]

Gillette is now owned by Proctor and Gamble, which is really well known for superior products.

Only recently has Schick popped up as actual, close competition.

Marketing is all about positioning as well....Gillette can't really position itself as "the best a man can get" if they don't sell their product for more money...buyers actually respond to price increases, thinking they automatically mean an increase in quality. That being said, they give out free razors, have weekly coupons in the paper, and even have coupons you can print online, so they make it easy to decrease cost.

Also, P&G allows 5% of their budget strictly for advertising and marketing. That is a huge number.

 

[Slash McCoy]

A LOT of what you are paying goes into making those great commercials that talk you into buying the product. So you pay for the commercial. The commecial convinces you to buy and to keep buying. Gillette makes more commercials with what you paid after watching the last commercials. You watch the new commercials, buy more carts. After a few months they play some newer commercials touting the new improved version with the scienifically designed hyper-exfoliating strip and long-chain polycarbonate space-age stabilizing bar and chirpractor-inspired ergodynamic handle and gyroscope quality ball bearing pivot and not a mere 7, but 8 high-tech laser micro-etched hypervelocity air polished blades for the smoothest shave in the galaxy, sold in new environmentally friendly hypoallergenic packaging because "We care about our planet just like we care about our families and our customers". Of course, the new carts don't fit on your old handle, but you want the new, improved one anyway. Wow! What a business model! What will they think of next!