Good Question: Why Are Razor Blades So Expensive?
MINNEAPOLIS (WCCO) -- It can cost us anywhere between $20 and $30 dollars just to shave the hair from our faces or legs. Sometimes, the price of the razor blades is more expensive than the razors themselves.
So, why are razor blades so expensive? Good Question.
Justin Keating can tell a difference between a razor with three blades and another with five.
"But, I don't know if it's worth what I'm paying for it," he said.
When you break it down, he pays almost twenty dollars for three weeks' worth of blades. That equals out to approximately $1 per shave with the Gillette Fusion ProGlide Power razor.
"It's pretty stiff," he said. "I just do it out of habit at this point."
Erin Lash is a senior equity analyst at Morningstar, an independent investment research firm. She covers Gillette (owned by Proctor & Gamble), one of the the two dominant players in the razor market. Schick (owned by Energizer Holdings, Inc.) is the other company.
Lash says part of the reason razor blades are so expensive is because consumers are loyal to the brand.
"Once you buy a particular razor, there's no substitution for the razor blade," she said. "Companies have a great ability to charge up for the blade once you're locked into the actual product," she said.
Despite controlling most of the razor blade market share, Lash believes Gillette and Schick still operate in a highly competitive market.
"I think there a degree to which they keep each other in check. You've seen that from the perspective that they're both looking to garner a large slice and they're both meaningful competitors," Lash said.
She also says there's always a threat from private-label competitors – two of which have appeared over the past year in the form of online start-ups offering less expensive alternatives.
Dollar Shave Club offers five basic razor blades for $1/month plus shipping and handling. Higher quality blades go for $9/month. Earlier this year, Dollar Shave Club made headlines with an online advertisement that went viral.
"Do you think razor blades need a vibrating handle flashlight, back scratcher and ten blades?" co-founder Michael Dubin in the ad said.
Dubin also pokes fun at some of the costs associated with the big brand-name companies.
"Do you like spending $20 a months on brand name razors? Nineteen go to Roger Federer," Dubin said.
Another razor online start-up is Harry's, which offers blades at about half the cost of what a person would find in the stores.
"It's very hard to make high-quality razor blades," Harry's co-founder Jeff Raider said.
Raider's company spent a year trying to figure out the best way to grind the steel to keep it strong at its base and sharp at the tip. They are now partnered with a company in Germany to produce razor blades.
"There are only a couple of companies out there who make high-quality razor blades that people would want to use and they've been able to charge a lot because there haven't been a lot of alternatives," Raider said.
WCCO reached out to both Gillette and Schick several times. Schick did not want to be a part of the story and Gillette never returned our calls and emails.
