“Man crates?” Bacon of the month? A curated box of makeup supplies delivered to your house? The idea behind those subscription box services you see advertised on Facebook all the time is nothing new. Book and music clubs used the same model for decades and made millions from it. But something about the combination of social media and the state of the U.S. consumer market has helped the most successful box club businesses grow at rates of as much as 100 percent per month.
If you’re thinking of starting a subscription box service, there’s never been a better time. If not, you can still use some of the concepts that drive this market to your advantage. Here are four characteristics of box club businesses that you can apply in your own business.
Box clubs don’t succeed by offering something for everybody — Amazon and eBay have already cornered that market. They succeed by offering something a small population really wants. Carnivore Club does not have a vegetarian option, and Bluum, a box club for moms with babies, doesn’t court the men-who-read-Maxim market. Even if your business is more general than focused, targeted ads for a subsection of your client base can also leverage this insight. A sporting goods store, for example, might get better results by specifically courting backpackers in one campaign rather than sending out a general flyer about all of its offerings.
Starting a subscription box company requires only some web presence and a little space in your garage: it’s the definition of a low-overhead model. Even better, expenses scale almost exactly to increased revenue so long as the owner doesn’t overbuy from bad estimates of growth and demand. “Cut expenses” isn’t exactly new advice, but comparing the radically lean model of subscription boxes to your own might help you find fat you didn’t previously know needed cutting. If they can make a million a year using only a spare room to store inventory, for instance, maybe you don’t need to rent thousands of square feet of warehouse space.
People Want Fewer Choices
Don’t let your local supermarket fool you — there’s a significant consumer base out there who are tired of having constant choices, as demonstrated by a study on consumer choice that found too many choices made a customer 10 times less likely to buy. They actively want an expert to recommend new experiences, give samples, and guide them. Keep this in mind when designing your next menu or presentation binder, or when placing your next order for stock.
“Belonging” Is Valuable
In an increasingly impersonal society, box clubs help create tribe. Simply joining the “Left Handed Men’s Underwear Club” reinforces that left-handed men’s underwear wearers are plentiful and important enough to have their own club, which breeds loyalty of its own. Seth Godin’s We Are All Weird explores this phenomenon in-depth, noting that even tiny interest niches have enough members online to propel a successful business. What can you do in your business to give your best customers a greater sense of ownership and belonging?