Why are Gillette and Schick cartridge blades so expensive ?

[Drubbing]

I am trying to reconcile these two replies :

(1) One reply said Gillette has little if any competition because it has about 75 percent of the market.

(2) Another reply said "price collusion is actually very difficult with a commodity such as a razor -- there are far too many producers out there to compete."

Way I see it, Gillette can set its own prices due to its dominance. Schick follow suit with pricing because it's easier than trying to compete on price - they may as well just max out the profits on their current market share.

Yes, there are lots of competing products, but hardly anyone outside these two is selling mutibladed carts. If people choose the most expensive product available, then more fool them. There's a cheaper one right next to it.

There is no collusion as such, and as shown around the world, it's hard to prove even when it does happen. The UK Office of Fair Trade and the Aus Competition Council and Consumer Affairs - these are all just government quangos that hold as much fear for corporations as being savaged by a dead sheep.

Here in Aus, we have clear price gauging and collusion from oil companies and banks, and the govt wastes million in setting up specific departments to investigate them, only to show it's like trying nailing jelly to a wall.

The difference here is we all have to use fuel and banks, and choices are limited to a handful of players in the market.

 

[Sydney Guy]

I am trying to reconcile these two replies :

(1) One reply said Gillette has little if any competition because it has about 75 percent of the market.

(2) Another reply said "price collusion is actually very difficult with a commodity such as a razor -- there are far too many producers out there to compete."

That's because the second statement is only true for the DE blade segment and not true at all for the much larger cartridge segment of the shaving market. Did you notice that DE blades are cheap and carts are expensive? That's why.

In the US you've had 2 major players in Gillette and Schick, with ASR as #3 a long way in the rear, and soon it's only going to be 2. In many other countries it's only been 2 since Energizer/Schick were allowed to buy Wilkinson Sword. When you have 2 competitors in a market they quickly realize that it doesn't pay either of them to compete on price. For the market leader (Gillette) to drop its price means massive losses on all its sales for relatively small volume gains, while the #2 player realises he can't win an out-and-out price war against #1's deep pockets and also that he doesn't need to. All he has to do is price at a slight discount to the market leader, but not enough to rile them into retaliating. That's certainly what Schick is doing here in Australia. For real price competition you need a smaller 3rd or 4th competitor for whom the gains in market share are worth discounting the price. That would be Wilkinson Sword - oh wait, Gillette & Schick bought them out.

 

[Go West Young Man]

I am trying to reconcile these two replies :

(1) One reply said Gillette has little if any competition because it has about 75 percent of the market.

(2) Another reply said "price collusion is actually very difficult with a commodity such as a razor -- there are far too many producers out there to compete."

Gillette dominates cartridges, so can set the price for them. However, there are many other shaving systems out there (electric, de, disposable, etc) so the consumer isn't forced to use only Gillette products. They can CHOSE to do so, but that's due to marketing, not collusion.

 

[Sledgehammer39]

That's because the second statement is only true for the DE blade segment and not true at all for the much larger cartridge segment of the shaving market. Did you notice that DE blades are cheap and carts are expensive? That's why.

In the US you've had 2 major players in Gillette and Schick, with ASR as #3 a long way in the rear, and soon it's only going to be 2. In many other countries it's only been 2 since Energizer/Schick were allowed to buy Wilkinson Sword. When you have 2 competitors in a market they quickly realize that it doesn't pay either of them to compete on price. For the market leader (Gillette) to drop its price means massive losses on all its sales for relatively small volume gains, while the #2 player realises he can't win an out-and-out price war against #1's deep pockets and also that he doesn't need to. All he has to do is price at a slight discount to the market leader, but not enough to rile them into retaliating. That's certainly what Schick is doing here in Australia. For real price competition you need a smaller 3rd or 4th competitor for whom the gains in market share are worth discounting the price. That would be Wilkinson Sword - oh wait, Gillette & Schick bought them out.

I would not be at shocked all that there is somekind of price collusion going on between the major players.

 

[BigFoot]

Gillette dominates cartridges, so can set the price for them. However, there are many other shaving systems out there (electric, de, disposable, etc) so the consumer isn't forced to use only Gillette products. They can CHOSE to do so, but that's due to marketing, not collusion.

Just to add to this. Gillette is a marketing machine. Have you ever noticed Schick always seems to be a bit behind them introducing new products and then never have the marketing blitz to support it. But Schick is usually a $1.00 or so cheaper on their cartridges. A consumer pays for that marketing and as long as they choose to do so you will see Gillette a bit higher priced than the competition.

 

[mharris127]

Thanks for replies so far.

I wonder how much the total production cost of a double edged blade is and how much the total production cost of a two blade plastic cartridge is ?

Patent protection likely expired years ago for the two blade plastic cartridges (Atra, Trac Two, etc) but generic brands for some reason are still hard to find.

If Gillette , Schick, and others are keeping the prices intentionally or unintentionally high it's a form of collusion which should be investigated by the Justice Department for potential anti-trust violations. Seems like it would have gotten attention by now because nearly every man and woman (including Supreme Court justices and high powered lawyers) shaves on a regular basis and must have asked themselves this same question about the high price of blades.

Both Dollar General and my local grocery sell generic blades for the Atra and Trac Two as well as their own handles. They are still $2 to $6 for five, though. It is DE blades that are sporadically hard to find!

 

[DunEdinRanger]

Everyone should see the operations of Gillette to understand where the money goes...the robotic operation is an engineering marvel at the Boston manufacturing plant. From start with raw materials to finish there is no human guidance

No human workers, means no salary, wages, or benefits. That means it should be cheaper to produce.

 

[marktyers]

In general, the DE's seem to be popular in countries not considered first world, I have read. Easier and cheaper to make. I don't think patents still apply to them, but I dont' know that for sure.

I have also read that as countries become more affluent, the preference for cartridge blades grows.

Here in the UK I can pick up DE blades at almost any supermarket, price £2 for 10 blades (not the best but quite adequate) as well as shaving soap and King of Shaves oil. The Wilko chain sells it’s own brand shaving oil for £1.25 a bottle which is just as good as KoS stuff.

Perhaps the UK is more into DE shaving than the US.

 

[djh]

Here in the UK I can pick up DE blades at almost any supermarket, price £2 for 10 blades (not the best but quite adequate) as well as shaving soap and King of Shaves oil. The Wilko chain sells it’s own brand shaving oil for £1.25 a bottle which is just as good as KoS stuff.

Perhaps the UK is more into DE shaving than the US.

Lots of chemists/drugstores/supermarkets in many parts of the world still stock DE blades and if one is caught in an emergency, they will suffice. Most of us here tend to buy DE blades in bulk with the price being considerably reduced by purchasing by the hundred from an appropriate Vendor.

 

[marktyers]

Lots of chemists/drugstores/supermarkets in many parts of the world still stock DE blades and if one is caught in an emergency, they will suffice. Most of us here tend to buy DE blades in bulk with the price being considerably reduced by purchasing by the hundred from an appropriate Vendor.

Completely agree. I bulk buy Astra and Derby at around 9p per blade, just pointing out in response to the OP it is possible to find DE blades pretty much anywhere in the UK.

 

[Twelvefret]

Okay, an 8 year old thread....but I just recently found out how much shaving costs from speaking with my children. My eldest said she's using generic disposables because they are cheap. She has a 1966 light blue Lady Gillette coming this week and an Astra blade. If it works out she will have a very efficient, mild experience for pennies. Yes, I'll share my supply of Astras....

 

[Canadian Mountain Man]

Lots of chemists/drugstores/supermarkets in many parts of the world still stock DE blades and if one is caught in an emergency

Of the three big chain drugstore's in Western Canada London Drugs is the only one I can recall seeing DE blades and all they stock are Wilkinson Sword German's at mini-bar prices. Can't ever recall seeing DE blades at a Shoppers & Rexall in these parts.

As to the original question....not to be flippant but its because they can. And just like any product that follows that pricing model they seem to be successful. Inkjet printers, glucose meters, smartphones, etc....anything where part of the package is a consumable the manufacture is often happy to sell the base technology at a loss but get the recurring revenue stream knowing you're tied to their platform.

 

[Twelvefret]

Of the three big chain drugstore's in Western Canada London Drugs is the only one I can recall seeing DE blades and all they stock are Wilkinson Sword German's at mini-bar prices. Can't ever recall seeing DE blades at a Shoppers & Rexall in these parts.

As to the original question....not to be flippant but its because they can. And just like any product that follows that pricing model they seem to be successful. Inkjet printers, glucose meters, smartphones, etc....anything where part of the package is a consumable the manufacture is often happy to sell the base technology at a loss but get the recurring revenue stream knowing you're tied to their platform.

Before coming here I bought my DE blades and my grocery store. The package only says stainless steel blades.

 

[ctspyvet]

Why are plastic cartridge blades so expensive compared to double edge razor blades ?

For instance two cutting edges are present on a double edged blade and also in a two blade plastic cartridge, but the double edged blade often is far less than half the price of the plastic cartridge blade. A popular double edged Derby blade is far less than one fifth the price of most two blade plastic cartridges.

A high price for a five blade plastic cartridge would be understandable compared to a double edged blade.

With Gillette and Schick competing for the plastic cartridge market , prices should be naturally falling to grab market share but are not.

Are plastic cartridges expensive to produce compared to a double edged blade ? Why such a wide difference in price ?

Reasons:
1 - Greed (Profits)
2 - Advertising


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[Twelvefret]

Reasons:
1 - Greed (Profits)
2 - Advertising


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I never consider profit greed. Prices are established not based on that the manufacturer decides, but what the market information and competition tells them to charge.

 

[Canadian Mountain Man]

I never consider profit greed.

Gordon Gekko approves

 

[Swedish Steel]

As I stated in another thread, when Gillette introduced the DE blades in 1903 they did cost, in today's value, USD 10 per blade. If I were to speculate, I would say (going from the concept of mental accounts etc.) that the human being is prepared to spend about a dollar per shave for blades. And that is something which they want to catch.

 

[Sabre]

Completely agree. I bulk buy Astra and Derby at around 9p per blade, just pointing out in response to the OP it is possible to find DE blades pretty much anywhere in the UK.

Where was that in the opening post?

 

[Twelvefret]

When you consider that the new modern makers use a Gillette New template and that they gave some of these razors away in order to sell blades, I think we all benefitted.


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[Deltaboy]

It the biggest Con Job in our Nation!