Manufacturers of electric fragrance diffusers sell the electric outer device at an extremely low price, sometimes even at a loss.However, they make their money on the product by charging a premium on the perfume refills that have to be replaced regularly.Which of the following business models does this best illustrate?

Question

Quizplus · Accepted Answer

This scenario best illustrates the razor-razor-blade business model. In the razor-razor-blade business model, the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods. The company makes its money on the replacement part needed.

Manufacturers of Electric Fragrance Diffusers Sell the Electric Outer Device