They spend a lot on marketing and free trials - see their ads all over the place.
These American type shave clubs are certainly being pushed in the UK
There must be a lot of profit in the them so makes me think the products are cheap
Yes and no.... I have spent a little while with a Private Equity company going through some of the numbers.
They make their money on the fact that once you're a subscriber you order more higher margin products from them and tend to renew your subscription (low churn). The initial mailing item (the razor) is either free or at cost.
The advantage of these services is that the supply to the customer is automatic (monthly or quarterly mailings etc) and it saves the customer having to visit a chemist. However, Amazon can do all of this pretty easily - so it's quite competitive.
Harrys are running at a loss to compete right now.
As above, Gillette are pricing themselves out. Gillette were one of the first companies to offer a very cheap, but high quality razor with more expensive consumable blades. Their razors from the 1940's - 1960's were superb... the Slim and Fatboys in particular. Their wartime 'Tech' razors were excellent too. I collect them.
