Razor and blades model
Common examples of the razor and blades model include inkjet printers whose ink cartridges are significantly marked up in price, coffee machines that use single-use coffee pods, electric toothbrushes, and video game consoles which require additional purchases to obtain accessories and software not included in the original package.
[1][2] The legend about Gillette is that he realized that a disposable razor blade would not only be convenient, but also generate a continuous revenue stream.
[1][3] However, Gillette razors were expensive when they were first introduced, and the price only went down after his patents expired in the 1920s: it was his competitors who invented the razors-and-blades model.
With dominance in the American domestic market, Standard Oil and its owner, John D. Rockefeller, looked to China to expand their business.
While this strategy worked for many years, it was challenged in the late 20th century when a rival, Fujifilm, introduced more economical film and processing methods.
Methods of vendor lock-in include designing the cartridges in a way that makes it possible to patent certain parts or aspects, or invoking the Digital Millennium Copyright Act[8] to prohibit reverse engineering by third-party ink manufacturers.
On the other hand, in August 2005, Lexmark won a case in the United States that allowed them to sue certain large customers for violating their boxwrap license.
For this reason, console manufacturers aggressively purse legal action against carriers of modchips and jailbreaks due to a belief that the resulting possibility of unauthorized or prohibited copying causes a loss in profits.
[12][13][14] Ever since the beginning of the commercial nuclear power industry, the business model has centered on selling the reactor at cost (or at a loss) and making its profits off fuel-supply contracts by exploiting vendor lock-in.
This has happened to "free" personal computers with expensive proprietary Internet services and contributed to the failure of the CueCat barcode scanner.
Tying is a variation of razor and blades marketing that is often illegal when the products are not naturally related, such as requiring a bookstore to stock up on an unpopular title before allowing them to purchase a bestseller.
