Shaleen ShahDollar Shave Club, a direct-to-consumer business that sells men’s razor blades on a subscription plan, was just acquired by personal care giant Unilever for a reported $1 billion.
The largest player in the industry is Procter & Gamble’s Gillette unit. It works according to a tried-and-true industrial method of spending vast sums on R&D, marketing, and distribution in order to lock out competitors and command huge profit margins.
Dollar Shave Club, on the other hand, took advantage of the fact that razors don’t really need to be re-invented every few years—the basic commodity model works just fine. And when marketing (via YouTube, in one of the best product introduction videos of all time) and distribution (via Amazon’s AWS e-commerce servers) are incredibly cheap, then Dollar Shave Club could quickly and cheaply capture a huge portion of the market. Founded in 2011, it now sells about 15% of the razor cartridges in the United States.
[Source: qz.com]
