Why Is Everyone Selling Razors Online? Are They a Deal?

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For all of the things I buy in life, razors seem like the last thing I'd want to buy online. I have a Gillette Mach 3 Turbo razor handle that I bought about 10 years ago, and I buy a 24-pack of razors at Costco (COST) that lasts for a year or more. Yet razors seem to be sold everywhere online.

And online sellers are about $1 cheaper per razor than most stores -- unless you find a heck of a sale (as I did at CVS (CVS)) or you shop at a warehouse store such as Costco. But the catch -- and I'm sure the shaving companies set it up this way -- is that you have to own the correct handle, which can cost up to $25.

Why does a site such as Dollar Shave Club, with its funny videos, or 800razors, with its plain website, or any other online store sell something that's as easy to get as an impulse buy at the supermarket? Two reasons: Razors aren't as inexpensive as they used to be. And they're locked up behind a theft-proof plexiglass case.

Locked Away

At the Safeway (SWY) and CVS stores I went to, razors were in case that a clerk must open. You can't just grab a package and head to the checkout. At Safeway, the Gillette razors were locked in a cabinet, behind a counter, along with cigarettes and the baby formula Similac. Apparently, all of these items were shoplifted so often that stores started keeping them under lock and key.

That's one less incentive to buy them at your local store. Try finding a store clerk on a busy afternoon to unlock a case of razors -- as if you were buying a tablet or e-book reader at Target (TGT) -- so you can shave.

Why Prices Are So High

But the bigger reason for the existence of razors online is the same as it is for most things: a lower price. Procter & Gamble's (PG) Gillette owns 76 percent of the shaving market, and Energizer's (ENR) Schick owns 16 percent, says Phil Masiello, founder and CEO of 800razors.com. With such a stranglehold, those companies can charge a premium. "We got into this because we were outraged at the prices we were paying for razors," Masiello says.

Another way to raise prices is to promote a shaving handle or blade that does things you never thought you needed before. Some have rolling balls or vibrate and are powered by a battery to provide a closer and easier shave.

Big companies also have big advertising budgets, which is something online sellers don't. Lower costs in advertising can result in lower costs for the product. The convenience of buying online is another major selling point for online businesses, says Michael Dubin, co-founder and CEO of Dollar Shave Club.

"The entire men's grooming and skin care market has exploded because American men are paying more attention to how they care for themselves behind the scenes," Dubin wrote in an email interview. "Our unique opportunity exists at the intersection of our ability to provide excellent products that make life better in the bathroom and a technical platform that makes life easier outside it."

Gillette almost has a monopoly in drugstores, for example, so going after its major competitor there didn't make sense. Online is a better place to shop by price.

We Compared Prices So You Don't Have to

To get prices down, competitors sell what are basically knockoffs of popular selling blades. Shaving is subjective, with some preferring five blades to three. For comparison purposes, we tried to find five-blade razors, though some of the most common razors sold in stores have three blades. We priced the most popular razors on the market.

It's also assumed that shoppers already own the handle for the blades they're buying, though the online blades may initially cost more overall because you'll need to buy a handle.

Razors are listed by store or website, razor name and number of blades, and cost per cartridge, going from most expensive to cheapest:
  • Safeway: Gillette Fusion Proglide, four blades, $4.50 per cartridge.
  • CVS: Gillette Fusion Proglide, four blades, $4.18.
  • CVS: Gillette Sensor, three blades, $3.18
  • Costco: Gillette Fusion Proglide Flexball, four blades, $3.99.
  • CVS: Schick Hydro 5, five blades, $3.15
  • Shave MOB, an online store: Caveman razor, six blades, $2.99, including handle.
  • Shave MOB: Average Joe razor, four blades, $2.74, including handle.
  • Costco: Schick Hydro 5, five blades, $2.26
  • Dollar Shave Club: The Executive, six blades, $2.25
  • 800razors: five-blade razor, $2.16. Price rises to $2.49 per cartridge when the $3.99 handle added.
  • Costco: Gillette Mach 3 Turbo, three blades, $2.08
  • Harry's, an online store: five or three blades, $1.88, but handle costs $10 to $25, increasing average cost to $3.12 to $5, depending on the one-time handle cost.
  • CVS: Gillette Fusion Proglide, four blades, $1.66 during a major sale.
  • Dollar Shave Club: The 4X, four blades, $1.50
The Verdict

Dollar Shave Club beats them all, at least in price. It's a subscription plan, which is easy enough to change if you remember to. Otherwise, your credit card will keep being charged $6 a month or whatever plan you choose.

As one Dollar Shave Club customer told me, the benefit was more than saving money, but in saved time and less hassle. "I would always forget to buy the blades and end up using a dull razor for weeks," says Bill Balderaz, president of Fathom Healthcare, of buying at a store. "I would buy a different handle each time because I would forget if I had the second or third or max or extreme version of the razor at home."

When my Costco supply runs out in a year, I'm going to have to give all of these online stores a try. A low price is good, but if I can find a better shaving experience at a comparable price online, I'll be able to avoid long lines at the store.
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