Tuesday, January 21, 2014

Shaving Dollars off of Razor Design and Distribution: Dollar Shave Club

Every time I buy a razor I think how ridiculous the prices are. Apparently, I’m not the only one—Dollar Shave Club has made a flying leap into the razor market by selling inexpensive razors delivered right to your door.

The biggest innovation in design this company offers is completely stripping down the frills and the gizmos that accompany other razor products. Their razors are simple: a reusable grip delivered along with fresh multi-bladed razors. The actual product itself looks very sleek and minimal, and the packaging of the product follows this design choice as well. A simple envelope with a small amount of packing foam gets the product from the supplier to the consumer. In contrast, other razor companies have plastic packages to better market them at the retail stores.

These bulky and expensive containers are not necessitated for Dollar Shave because the product is already sold once it ships. The product can also be shipped disassembled, allowing for smaller packaging, and also reduces the risk the product might be damaged en-route. The company currently only offers three different types of razors: The Humble Twin, The 4x, and The Executive. By keeping their designs simple, and their supply chain focused on the single item, they have been able to reduce cost and undercut competition.

This company is starting off to great success namely because of the perception of value. Whether the dollars and cents actually line up, the product seems to give the consumer a savings. Mach-3 razors, their closest competitor, cost a mere $6 on the market, and refills are fairly inexpensive as well. Yet, in bigger cities the in store mark-up on razors can be large, and the convenience of having a razor ship to your door seems to me to be a huge advantage. The design of the packaging makes the items feel classy, and also saves the consumer money. Harkening back to the barbershop, this product has a simplistic feel while retaining quality.

Yet, costs could be driven up in the future by diversifying the products they sell. The company has had a large infusion of cash into their operations to expand into shaving creams and wipes, and these goods will change the supply process and put a larger price tag on shipping.


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