June 13, 2010

Inflation in the Razor Blade Industry, and What This Can Teach the Glass Industry

By Paul Bieber

Roughly fifteen to twenty years ago I bought my last package of razor blades. I don’t shave too often, maybe once every other week, and then just at the edge of my face. I have had a full beard for over 30 years. I trim the beard and keep it neat, but that doesn’t wear out razor blades. The last time I bought the blades, there were two blades on each cartridge, and there were ten cartridges on the cardboard packaging. The price was still there on the sticker, very faded, but readable at $2.19 for ten blades. Twenty two cents each.

Yesterday I bought a new razor and razor blades. Talk about sticker shock. I could understand the new razor handle. But the blades were now on a four-pack card for $17.99. $4.50 a blade. There were now five blades on the cartridge and a gel strip that promised I would love my shave. Twenty times more expensive than before. When I shaved, it felt OK, but twenty times better than when I shaved last month? After the shave there were no Victoria Secret Models running their hands over my smooth cheeks and I still couldn’t throw a curve ball. Twenty times more?

I guess when Proctor & Gamble bought Gillette for $57 Billion in 2005 they knew they had a winner.

If we all say let’s double our prices tomorrow, that would be illegal. But we are selling glass cheaper today than we did fifteen years ago. Why? Because supply exceeds demand. Because we don’t fully promote the benefits of our new glass products. Glass today is different than fifteen years ago, but we don’t tell this to our customers.

OK glass industry…read up. We have to continue to improve what we do. We can’t fight technology and change. We can’t do things like it is a two-blade world when five blades rule the roost. We have to accept that coated glass, hard or soft-coat is the future. We have to accept that industry and/or government standards will apply to all windows and glazing. We have to accept looking through a window is not as important as the heat and light flow through that window.

If you are not able to tell a customer about ‘U’ values and solar transmission, you have two choices–learn or plan your retirement.

Fortunately for you, I know a little bit about both. Over the next couple of weeks I will write some posts about both of these topics. I used to know all about glass, and I now know about retirement. Both have valuable lessons.

Stay tuned.