People are buying more refills, replacements, pods, bags, and filters than ever. That's because they're buying products that require proprietary refills and parts to work.
Proprietary replacement parts are big business, and we're only about to see more of them as businesses tap into creating product ecosystems that create followup revenue. It's all part of a universal retail shift to a service and subscription economy: buy a product for a good price and low margin, then buy replacement parts at a high margin forever.
Like it or not, almost every household and office has a product that requires a very specific refill in order to work, and this phenomenon is becoming more prevalent.
Companies are increasingly releasing products that create ecosystems that keep consumers subscribing and replacing. Even Apple, the consumer electronics hardware monster of the 21st century, is focusing its future on subscription services through media plays that sit atop its hardware.
Coffee Pods
Consider this: of the top-selling coffee makers at Amazon ($AMZN), the Keurig ($KDP) K575 Single Serve K-Cup Pod Coffee Maker is the fourth most-popular. In order to work, the K575 requires specific K-Cup refills.
Coffee machine pods have become a massive market, with Keurig and Nespresso dominating. In fact, according to Amazon sales-rank data, they've become bigger sellers than coffee itself.
Of the top-10 sellers in the "Coffee Beverages" category at Amazon.com, 9 are K-Cups or Nespresso capsules.
Proprietary Cleaning
While coffee pods are a somewhat more obvious best-seller — people go through a lot of coffee — Keurig sells branded cleaning products that have graced Amazon's best-seller ranks for hundreds of days. Its Keurig Descaling Solution, for instance, has an average sales rank of 41, having ranked in the top-100 for all Home & Kitchen products for 384 days.
Water Filters
Brita was launched in the 1960s. It began simple enough: as a way for consumers to clean their water. But it wasn't until the company created the "ion exchange resin" replaceable filter that the company found a massive new market: selling proprietary replacement parts.
At Amazon, Brita replacement water filters are also massive sellers. The "Brita Standard Replacement Water Filter for Pitchers, 3 Count", averages a sales rank of just 1.5 in the entire Kitchen & Dining category.
Printer Ink & Toner
Printers remain big business for companies like HP ($HPQ), Epson ($TYO:6724), and Canon ($CAJ). But those companies aren't making their money on the printers themselves. Rather, they're selling millions of ink cartridges and laser toner. In fact, of the most-common sellers (those that ranked most often) in Amazon's Office Products category for printer-related items, 9 are inkjet cartridges and laser toner.
Meanwhile, the single actual printer in the top-10 is a Brother laser printer that comes with the ability to auto-order toner replacement via Amazon Dash.
|
Name |
Category Rank (Average) |
Days Ranked |
|---|---|---|
|
Epson DURABrite XL T127120 Ultra 127 Extra High-capacity Inkjet Cartridge-Black |
60.1 |
409 |
|
Canon PG-245 Black Cartridge, Compatible to MX492, MG3020, MG2920,MG2924, iP2820, MG2525 and MG2420 |
27.2 |
369 |
|
HP 63 Black Original Ink Cartridge (F6U62AN) |
44.6 |
312 |
|
Brother TN450 High Yield Black Toner - Retail Packaging |
17.1 |
299 |
|
HP 61 Black Original Ink Cartridge (CH561WN) |
12.2 |
287 |
|
Canon PG-240XL Black Ink Cartridge, Compatible to MG3620, MG3520, MG4220,MG3220 and MG2220 |
54.7 |
283 |
|
HP 564XL Black High Yield Original Ink Cartridge (CN684WN) |
51.4 |
258 |
|
HP 62XL Tri-color High Yield Original Ink Cartridge (C2P07AN) |
56.2 |
256 |
|
Brother HL-L2340DW Compact Laser Printer, Monochrome, Wireless, Duplex Printing, Amazon Dash Replenishment Enabled |
61.4 |
231 |
|
HP 63 Black & Tri-color Original Ink Cartridges, 2 Cartridges (F6U61AN, F6U62AN) |
6.3 |
220 |
Trash Bags
Until somewhat recently, trash bags were large, medium, or small. These days, however, because of a company called simplehuman ($PRIVATE:SIMPLEHUMAN), trash bags have become big business. simplehuman got its start selling well-designed stainless-steel trash cans. But it made its mint selling replacement trash bags that it prefers to call a more elegant "custom fit liners". It codes the liners by size, and as of today, sells them in a whopping 18 sizes.
And it works: across all of Amazon, the simplehuman Code Custom Fit Liners scored an impressive sales rank of just 3.2 for all of simplehuman's products sold.
|
Name |
Category Rank (Average) |
|---|---|
|
simplehuman Code |
3.2 |
|
simplehuman CW0161 Code B Custom Fit 6L Trash Can Liners, 30/Box |
14.0 |
|
simplehuman Tension Arm Paper Towel Holder, Stainless Steel |
33.3 |
|
simplehuman Wall Mount Grocery Bag Dispenser, Brushed Stainless Steel |
51.4 |
|
simplehuman Sink Caddy, Brushed Stainless Steel |
66.9 |
|
simplehuman Code H Custom Fit Liners, Drawstring Trash Bags, 30-35 Liter / 8-9 Gallon, 3 Refill Packs (60 Count) |
75.5 |
|
simplehuman Wall Mount Grocery Bag Dispenser, Stainless Steel |
81.0 |
|
simplehuman 6 Liter / 1.6 Gallon Stainless Steel Compact Semi-Round Bathroom Step Trash Can, Brushed Stainless Steel |
84.0 |
|
simplehuman Code H Custom Fit Liners, Drawstring Trash Bags, 30-35 Liter/8-9 Gallon, 3 Refill Packs (60 Count) |
87.8 |
|
simplehuman Slim Plastic Step Trash Can |
94.0 |
Razors
One of the originators of the proprietary refill economy, razors continue to churn massive capital for companies like Gillette, owned by Procter & Gamble, ($PG) and Schick ($EPC). Dollar Shave Club ($PRIVATE:DOLLARSHAVECLUB) tapped into the market with its own razor-replacement subscription service and ended up being sold to Unilever ($UN) for $1 billion in cash.
Meanwhile, brands like Braun, whose personal grooming products are also owned by P&G, are adding cleaning cartridges to their electric shavers that require regular replacement, which have an impressive 7.0 average sales rank in Amazon's Beauty & Personal Care category.
|
Name |
Category Rank (Average) |
|---|---|
|
Gillette Fusion Manual Men’s Razor Blade Refills, 12 Count, Mens Razors/Blades |
5.0 |
|
Braun Clean & Renew Refill Cartridges CCR, 5.7 Fl Oz, 4 Count |
7.0 |
|
Gillette Fusion ProGlide Bundle with 1 ProGlide Razor Handle with FlexBall Technology + 4 ProGlide Razor Blade Refills, Mens Razors / Blades |
18.0 |
|
Gillette Fusion Manual Men’s Razor Blade Refills, 12 Count, Mens Razors / Blades |
19.3 |
|
Gillette Mach3 Men's Razor Blades, 8 Blade Refills (Packaging May Vary) |
20.0 |
|
Gillette Venus Embrace Women's Razor Blade Refills, 4 Count, Womens Razors / Blades |
22.1 |
|
Gillette Venus Embrace Women's Razor Blade Refills, Purple, 4 Count, Womens Razors / Blades |
23.0 |
|
Gillette Mach3 Men’s Razor Blade Refills, 15 Count (Packaging May Vary), Mens Razors/Blades |
23.8 |
|
Gillette Fusion ProShield Men's Razor Blade Refills, 8 Count, Mens Razors / Blades |
24.7 |
|
Braun Clean & Renew Refill Cartridges CCR - 4 Count |
25.1 |
Alexa and the Dash Button
The refill economy isn't all razors and Brita filters. Companies are releasing new products seemingly daily that lock consumers into a replace and refill relationship. Consider how many of the following things you have ordered for your home or office: Philips Sonicare toothbrush heads, Swiffer Sweepers, cat litter pads, air filters, or even soap.
But what differentiates the past decade to present day is Amazon's Dash Buttons: adhesable devices that allow consumers to push-to-order specific products from certain brands. Rather than go to a brick-and-mortar store to buy more K-Cups, a Keurig owner can press a button and easily get some more pods.
And that may also incentivize buying these products with proprietary refill parts and capsules; why buy a regular coffee pot and lug home a tub of coffee grinds when ordering replacement K-Cup pods is as easy as tapping a button? Meanwhile, Amazon now has Alexa, its digital voice assistant that comes with its Dot, Dash, and Echo smart speakers.
Refreshing a supply of dwindling Brita filters is now as simple as saying, "Alexa, order more Brita filters."
It's also the reason why several of these products rank so high in their respective categories. Besides the aforementioned Keurig, Brita, Phillips, Swiffer, Schick, and dozens more companies have Dash buttons and Alexa skills that order replacements without a second thought.
Amazon's Dash Button has ushered in a new era of making money for companies with proprietary products, and while it's helped consumers out by way of convenience, it also leaves us questioning what this might mean for the future of the overall retail economy.
