Subscription Box business (wholesale, sales, profit, failing)

[keraT]

Subscription box seem to have taken off. Now I can think of many things that would be nice if it just showed up. But is it profitable or just a phase. Ofcouse there are few subscription box that are established but there are many many that never made it.

How do you feel about it?
Do you have one?
Amy advice

[freemkt]

I never heard it called that before, had to look it up. Old idea, I wonder why it's so popular now.

[Hemlock140]

We actually have one from Amazon, a few items that we use on a regular basis that comes on a monthly basis. It's very convenient and better prices than at retail, with free shipping (Prime).

[keraT]

I was thinking about Birchbox type that became successful and of course those subscription from well established store like Amazon, Wal-Mart, Target will be successful.

The food type where they give you measured out ingredients for meal seem promising. recently on shark tank I saw few guys raising money for their sock subscription box business where they mail out new sock every month with cool/different prints on it. Then there is the advertisement i see for $1 shaving club.

I am curious what makes it successful and what makes it fail & how do these company manage to give cheaper than retail price. Some of the $30 box is worth $70. I understand they use wholesale price vs. retial but still

[keraT]

Originally Posted by freemkt

I never heard it called that before, had to look it up. Old idea, I wonder why it's so popular now.

I wondered the same, why such basic concept took off all of sudden. This thought process came after I was reading about Avon failing & wondered what is the future of Avon, Amway type company now that we can all order online. I am thinking, its because

1) people have less human interaction now a days. Less people are in touch with their family & less presents are being exchanged by eachother. Most people opt for gift cards instead of box of surprise goodie. Company like Birchbox are helping with this control surprise factor.

2) We are really bored and box of goodies give us excitement.

3) the convenient factor of everyday used item. I can see appeal for this. If I use the same item every month, wouldn't it be nice to automatically get refills instead of having to go shopping. I know I am terrible at getting basic needs because its just not fun to shop for toilet paper and soap

[Hemlock140]

On pricing, think about the cost of delivering a small, lightweight box from their warehouse to your home, with a good deal from Fedex or UPS. Compare that to the cost of having a rep visit local stores all over the country to take orders, and shipping large quantities by truck/rail to the retailer local warehouses. They can afford to sell for less, because their cost is less. The losers are the retailers that do not sell online, who will continue suffering from lower sales volume as these box sales pick up. Think about how often you see something you want at a store, but then order it online from your smart phone while standing there or when you get home at a lower price. We all do that now. The added advantage of the subscription box is convenience, not having to order every time, and that also gets the price down even lower.