![]() Another method entails completely disabling the printer when a non-proprietary ink cartridge is placed into the machine, instead of merely issuing an ignorable message that a non-genuine (yet still fully functional) cartridge was installed. ![]() Methods of vendor lock-in include designing the cartridges in a way that makes it possible to patent certain parts or aspects, or invoking the Digital Millennium Copyright Act to prohibit reverse engineering by third-party ink manufacturers. In certain cases, the cost of replacing disposable ink or toner may even approach the cost of buying new equipment with included cartridges. This is because the printers are often sold at or below cost to generate sales of proprietary cartridges which will generate profits for the company over the life of the equipment. Specific examples Printers Ĭomputer printer manufacturers have gone through extensive efforts to make sure that their printers are incompatible with lower cost after-market ink cartridges and refilled cartridges. ( Predatory pricing to destroy a smaller competitor is not covered here.) This can make the practice illegal. For such a market to be successful the company must have an effective monopoly on the corresponding goods. The razor and blades model may be threatened if competition forces down the price of the consumable item. For example, Fujifilm's Instax cameras are sold at a low price while the film they use costs as much as $ 2.00 per photo. Instant cameras also follow the razor and blades business model. Finally, digital photography made the strategy obsolete, as it needs no consumables. While this strategy worked for many years, it was challenged in the late 20th century when a rival, Fujifilm, introduced more economical film and processing methods. In its decades as the dominant photographic film producer in the United States, Kodak sold its cameras at low prices and enjoyed large profit margins on the consumables of the trade, such as film, printing supplies, and processing chemicals. Īmong American businessmen, this gave rise to the catchphrase "Oil for the lamps of China." Alice Tisdale Hobart's novel Oil for the Lamps of China was a fictional treatment of the phenomenon. Representatives of Standard Oil gave away eight million kerosene lamps for free or sold them at greatly reduced prices to increase the demand for kerosene. Rockefeller, looked to China to expand their business. ![]() With a monopoly in the American domestic market, Standard Oil and its owner, John D. This model has been used in several businesses for many years. But Gillette razors were expensive when they were first introduced and the price only went down after his patents expired in the 1920s: it was his competitors who invented the razors-and-blades model. ![]() To foster that stream, he sold razors at an artificially low price to create the market for the blades. The legend about Gillette is that he realized that a disposable razor blade would not only be convenient, but also generate a continuous revenue stream. ![]()
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