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Dollar Shave Club Turns Razor Subscriptions Into a $1 Billion Deal

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Dollar Shave Club just turned cheap razors into a lot of money. Unilever announced yesterday that it is acquiring the monthly subscription razor box start-up, reportedly for $1 billion in cash.

If so, this would be the third largest e-commerce deal in history, according to TechCrunch, beaten only by deals for Zulily and Wayfair. And although companies like Birchbox have run into trouble recently, this Dollar Shave Club deal is a big score for the subscription box movement.

The appeal of Dollar Shave Club is obvious: Why pay more for razors at the drug store if you could get them regularly in the mail at a much cheaper price? For as little as $1 a month and $2 shipping and handling, Dollar Shave customers get five cartridges a month.

Unlike traditional razor companies, the startup didn't have to pay for advertising initially, thanks to a viral video with 22 million views which grew into a social media fanbase of close to 3 million Facebook followers.

Member Mondy C gets thanks in this #UnBoxDSC. He gets a free DSC t-shirt. If we repost yours, you get a free shirt too.

A photo posted by Dollar Shave Club (@dollarshaveclub) on

No wonder Unilever wanted to get on board with the business that disrupted its own industry. Razors are a huge industry (according to Euromonitor, Gilette sold $2 billion in razors and blades in 2014 in the U.S.), and they're a regular, repeatable purchase — making them perfect for the subscription box model. Gilette even went and launched its own subscription service in 2015.

And while Birchbox and other subscription box businesses may be struggling, Dollar Shave Club is only on the rise — a sign, perhaps, that if companies can keep customer satisfaction high, the subscription model isn't going anywhere anytime soon.