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Razor - Razorblade Model
What does it mean?
A business tactic involving the sale of dependant goods for different prices. One good is sold at a discount, while the second dependant good is sold at a considerably higher price.
In Other Words...
If you've ever purchased razors and their replacement blades, you know this business method well. The razors are practically free, but the replacement blades are extremely expensive.
The video game industry is another user of this pricing strategy. They sell the game consoles at a relatively low price, recouping the lost profits on the high priced games.
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Related Terms
Loss Leader
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