A new twist on the “lose money on razors, make money on the blade refills” plan. You won’t believe this zero-inventory plan for selling electricity at an outrageous markup!

Background:

Some products, like printers, razors, and coffee machines, rely on a recurring purchase of input materials (ink, razor blades, and coffee, respectively).

Frequently, the company that sells the durable part of this system will sell it at cost (or even below!), with the hope of profiting from a hefty markup on the consumables (Figure 1).

***Fig. 1:*** *Inkjet printer ink and single-use coffee pods are frequently “locked” by the manufacturer, so a consumer can’t comparison shop: other brands simply won’t work!*

The Issue:

But the company has a problem: if Inkjet Printer Co. sells a printer at a loss, but sells exorbitantly priced ink, some other company might step in and sell ink at a more reasonable price.

The solution to this problem, of course, is “Digital Rights Management“—lock the printer in such a way that it can ONLY use branded ink from the same company (Figure 1).

Proposal:

Strangely, this “lock the product ” system has not spread to every aspect of consumer products. (For example, there is no such thing as a stove that only works with same-branded pots and pans.)

In order to create an inescapable “locked” product, we will try to brand-lock the most basic element of modern machinery: electricity!

By creating a new line of products that only work with a new type of plug, a company can sell “branded” electricity to consumers.

In order to make the concept more palatable, let’s call this system “Green Electricity” (Figure 2). Note: it isn’t ecologically friendly in any way, it’s just the color green.

***Fig. 2:*** *A consumer who wants to use this “Green Electricity”-branded computer will need to also get a five-pronged “green electricity” plug installed in their house.*

This would allow a company to sell heavily-marked-up electricity to consumers.

In order to prevent a user from simply buying an outlet adapter or transformer (and thereby using regular electricity in a Green Electricity product), the Green Electricity wiring could have an unusually-modulated voltage and amperage.

Perhaps the exact parameters of this electrical current, and the dimensions of the plug, could be trademarked in order to prevent competitors from selling adapters. (And trademarks, unlike patents and copyrights, can be renewed forever.)

***Fig. 3:*** *Sure, the “regular” plug (top) might have cheaper electricity, but it won’t be compatible with the great products that require Green Electricity.*

Conclusion:

This is the ultimate in selling consumable items: not only does it lock consumers into a particular resource that they have to keep buying, but the company can also just purchase electricity from the regular power company and re-sell it at a markup! No inventory or shipping required.

PROS: Brings new innovations in product development to the world.

CONS: People might get annoyed if they end up with six or seven different (and incompatible) outlets in their kitchen, but I’m sure they’ll get used to it.