Selecting Your Subscription Box Model, Part II of a Series

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February 23, 2017

 

In part I, Should You Start A Subscription Box Business?, we discussed the reasons why you might want to consider offering a subscription box (and those reasons are mighty compelling).

Once you’ve decided to offer subscription boxes, your first step is to decide what kinds of boxes to offer. We’ll cover three ways to determine that.

Create or add monthly boxes to your existing product offerings.

Think you have to choose between being a monthly subscription box company or just selling products? Nope. You can/should do both. In fact, it’s one of the easiest ways to add additional consistent monthly revenue to your existing business.

One example is ShipStation user Paleo Treats. The San Diego, CA-based company began offering Paleo desserts to customers online back in 2009. They’ve done a few great things since then.

“Our goal in the world of dessert is to make the finale to your meal as healthy as the appetizer and to make sure that your desserts taste as good or better than anything else you could make with ‘cheat’ ingredients,” says Nik Hawks, owner of Paleo Treats.

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Nik is continually looking to grow the business and in 2015, he began searching for ways to make it easier for customers to have a consistently healthy dessert.

Nik decided to offer monthly boxes, with the knowledge that they wouldn’t make up the primary portion of his business.

Today, Paleo Treats, in additional to individual assortments, offers monthly shipments of cases of goodies including Brownie Bombs, Mac Attacks!, Mustang Bars, Banditos, Rockets and Cacao Now! and even a Build-a-Box option (we can vouch for each and every one of these treats as a MUST TRY!).

“Our product has a very specific niche,” says Nik. “While our customers aren’t very price sensitive, only a subset of them are willing to subscribe monthly for a box of our products. It’s really a convenience service for them.”

While monthly box revenue makes up less than 10% of total sales, says Nik, any revenue that can be predicted is terrific.

Find an existing monthly subscription box company and create one that will do things better or differently.

There are thousands of monthly subscription box companies out there.

In the last post, we covered the top five most popular categories of subscription boxes:

  • Fashion
  • Beauty samples
  • Organic food
  • Eco products
  • Kids’ crafts & activities

The success of many subscription box companies proves that there is a market for the item. Can you do it better or differently than the competitors? With your own flair and branding, standing out is key.

That’s what the founders of Austin, TX-based ShipStation user Sock Club decided to do.

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Noah Lee and Dane Jensen had read a 2010 Forbes online article about a successful subscription box company, Blacksocks, based in Switzerland. With revenues of $5 million in 2009, Noah and Dane’s interest was piqued.

While the two were working in full-time jobs, they began researching the market in late 2011, primarily searching to see which companies ranked highly on Google. There were only a few competitors they could find.

In May 2012, while still working full-time, they decided to create a sock club that would offer not just black socks, but all kinds of fun socks. They both had a passion for cool socks, and with Noah’s finance background and Dane’s experience as a web developer, creating this type of company was a good fit (pun intended).

Today the company has over 15,000 subscribers, and the founders quit their jobs and began working full-time at Sock Club in 2015.

Create a new type of monthly subscription box.

With all of the subscription boxes out there, is it really possible to create a new type of box? The answer is yes, and Jonathan Beskin did it.

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He is the CEO of Singles Swag, a Boca Raton, FL-based monthly subscription box service that provides unique beauty, food, health and lifestyle items for single women.

Working full-time, Beskin launched Singles Swag as a sideline after finishing an MBA program and brainstorming business ideas. “Initially, I wanted to offer the box for men and women, but in my research I found that women were more likely to buy subscription boxes,” he says.

At launch time (May 2016), no other companies were offering subscription boxes for single women. A divorced dad, Beskin proves that you don’t need to be part of your target market to launch a successful business.

The company is growing rapidly. In less than a year, the company has over 6,000 monthly box subscribers.

Want to know more details about how these companies became so successful? Keep on the lookout for future articles in this series.





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