WhereIsAtlas · Consumer goods

Gillette

The company that gave you the free razor — so you'd buy the blades — and taught everyone the business

Transformed — The safety-razor pioneer — bought by P&G in 2005 — now faces razor-and-blade disruption from cheap shave clubs.

Gillette was founded in 1901 by King C. Gillette, a traveling salesman who had a now-famous idea: a safety razor with a cheap, disposable blade. The business model was the genius — sell the handle cheap or even give it away, and make the profit on the blades people had to keep replacing. It created an almost perfect recurring-revenue machine and built the 'razor and blades' model that businesses still copy a century later.

Through the 20th century Gillette grew into one of the world's great consumer brands, absorbing rivals and expanding into deodorants, toothbrushes and other grooming products, alongside a powerful advertising engine. Its razors — from the Trac II to the Mach3 to the Fusion — became icons, and its name a near-synonym for shaving.

In 2005 Procter & Gamble bought Gillette for about $57 billion, one of the largest consumer deals in history. But the model was already being challenged from below: Dollar Shave Club's 2012 'blades are expensive' video, and subscription services like Harry's, shaved the margins off the cartridge business by selling decent blades cheap online. P&G fought back with its own subscription, yet Gillette's domination is history. The name lives on under P&G, no longer the unassailable king of shaving it once was.

Quick facts

Founded
1901, by King C. Gillette
The model
'Razor and blades' recurring revenue
Acquired by P&G
2005 (≈ $57B)
Disruptors
Dollar Shave Club, Harry's
Today
A P&G brand, no longer dominant

Sources

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