Walk into any drugstore and find the shaving aisle.
A razor handle with two cartridges. Twelve dollars, give or take.
Now look one shelf over. A pack of four replacement cartridges for the same handle. Eighteen dollars.
The refills cost more than the entire product did.
You know the explanation. Everyone does. Gillette gives away the razor and makes its money on the blades. It is taught in business schools. It has a name, the razor and blades model, and King Gillette is the man who supposedly invented it by handing out free handles.
Here is the problem with that story.
It is mostly false.
Historians who went and looked at what Gillette actually did found something different. During the years his patent was in force, Gillette priced razors high, not low. A Gillette set cost real money, equivalent to a substantial sum today. He was not giving anything away.