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what's going to stop gilette from implementing this same program?
Nothing but what price do you think gilette is going to charge if they were to adopt the program? Its not going to be 1 dollar for sure, why sell a blade for even 5 dollars including shipping when they already sell blades for quadruple the price and they just have to send a crate to various retailers.
Nothing but what price do you think gilette is going to charge if they were to adopt the program? I
just saying, if they wanted a company like gilette could decide to produce the same quality razor with higher margins (or simply undercut DSC) to take advantage of this "new" distribution system if it is deemed to be feasible.
just saying, if they wanted a company like gilette could decide to produce the same quality razor with higher margins (or simply undercut DSC) to take advantage of this "new" distribution system if it is deemed to be feasible.
Mmm, but your "if they wanted" is just a weak standpoint. If anyone wanted sure they can do anything. If i wanted i could have thought of the same business structure and did it before this feller. But im sure thats not what you meant when you say and emphasize "if they wanted"
So why wouldnt they?
A new distribution system for a company as big a Gilette will take years to develop into something that would even resemble DSC. Compare how long blockbuster is in business (still is) for online subscription services to over take them (and not just over take but dominate). Then theres the issue of copying the system, the board room discussions to the pros and cons on selling their 35 dollar blades (no handle) for something that will compete with dollar shave club. Their distribution to stores, is the premium shelf space they pay for worth it if most their loyal customers will switch to the subscription service.
I answered you with because it seems a little silly you even ask the question in the first place so many companies have done what dollar shave club is doing (selling directly to customers), which has been a tactic for a long time. Maybe the better question is why did Gillette choose their current business model? Maybe because they make money? $43billion in fact.
The ad for $1 mail order razor blades from California's Dollar Shave Club has won a legion of fans online, with more than 1.6 million views on YouTube since March 5.
And for company founder Michael Dubin, who stars in the ad, his savvy marketing campaign has reportedly secured the fledgling business $1 million in venture capital to get it off the ground.
Dollar Shave Club's viral hit has already been compared to the Old Spice Man ad, which has had more than 40 million views on YouTube since it was uploaded two years ago.
In the 90-second clip, Dubin takes aim at the major razor blade brands for over-charging for their product, which he says cost up to $US20 per pack in the US.
His company promises to deliver 'f-----n great' razor blades with an aloe vera strip to a customer's door for $1 per razor.
Starting with what appears to be a simple sales pitch from behind a desk, the ad takes a comical turn as Dubin takes the viewer on a journey through what is supposed to be the company's drab facility.
The smooth-talking Dubin delivers irreverent lines laced with dead pan humour and accuses the major brands of over-engineering their expensive blades.
"Do you think your razor needs a vibrating handle, a flashlight, a backscratcher and 10 blades?" he says, leaning on a forklift. "Your handsome a--- grandfather had one blade."
In a stab at market leader Gillette, Dubin slams the use of highly paid athletes to promote their products.
"Do you like spending $20 a month on brand name razors? Nineteen go to Roger Federer," says Dubin.
Dubin told the Huffington Post users buying the twin-razor model at $US1 could save up to $US292 on their razor blades a year, compared with upper-end models in the Gillette range.
The company was founded in April last year in Santa Monica and imports its razors from Korea.
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