I had never heard of DollarShaveClub.com before an Atlantic contributor sent me the 94-second advertisement below. But I'm pretty sure that it's funnier, more creative, and more all-around awesome than any single spot in the Super Bowl. Watch it. Utterly humorless economic analysis follows the video.
Here's the business pitch: Buy our razor because it's really cheap. If you spend hundreds of dollars a year on brand-name razors, you're not paying for the razor. You're paying for what the razor represents.
And here's the thing: The dude is right! Making razors is really cheap. Even quadruple-bladed, triple-aloe-stripped monstrosities don't cost Gillette anything close to the retail price. So when you buy one of these fancy razors, most of your money isn't going to production costs or shipping costs. It's going to marketing costs. It really is going to Roger Federer and an ad agency and a communications team and all trappings of marketing that exist to distinguish the Gillette brand.
Across the economy, even as the price of items like razors, toasters, clothes, and food have fallen compared to wages, the share of their price that goes to marketing has increased. The stuff that's getting cheap is actually getting even cheaper than we think it is, because we're paying for the costs of distinguishing similar products.