By Lily Leung
The Orange County Register.
Huntington Beach, Calif.
Resident Rachel Murphree never thought she’d spend $25 on a tube of mascara, no matter how well it could curl and lift her lashes.
After sampling products through Birchbox, a $10-a-month subscription for assorted makeup, she “could never go back to cheap mascara,” said the 32-year-old lifestyle blogger and adjunct English professor at California State University-Fullerton.
For deal-seekers like Murphree, subscription boxes are a relatively cheap way to try popular goods with little commitment. Businesses with featured products in turn garner exposure and potential clients, with a fairly low entry barrier.
These modern-day parcels are reminiscent of care packages sent to summer camp or college dorms. Curated boxes, a fairly new business model, typically contain a mix of items tailored to a theme or demographic. The containers are mailed out on a recurring basis and feature some element of surprise.
Boxes, with monthly to quarterly subscriptions, range from practical to zany. There are dog treats and goodies from BarkBox; the cooking-challenged can get weekly shipments from Plated, which packages food based on “chef-designed” recipes of the buyer’s choice. Those who want to add some spice to their love lives have BlushBox with its lingerie and massage lotion.
Subscription boxes have served as a new entry point into retail for smaller firms and independent artists who before relied heavily on the crafts marketplace Etsy to sell their wares.
Heather Myers, a Mission Viejo, Calif., graphic designer who runs an Etsy shop, saw her chance to dive into the subscription business less than a year ago. Through her freelance business River & Bridge, she began to offer “bridgeboxes,” monthly deliveries of personalized stationary and extras.
Recipients in January got a shipment of eight personalized cards with envelopes, a notepad and two Valentine’s Day cards, for $17, including shipping. All the cards are designed, cut and packaged by Myers, who works full time as a pre-press supervisor at Lester Lithograph in Anaheim, Calif.
Her subscriptions make up 15 percent to 20 percent of her freelance income with the balance generated mostly through contract work and Etsy sales.
What excites many subscribers is the prospect of finding a higher-priced item that far exceeds the price paid, said Liz Cadman, who runs My Subscription Addiction, a free review-based website. One example is San Francisco-based celeb site PopSugar, which charges $39.95 a month for its subscription. Cadman says it’s not uncommon to see a box feature $100 worth of items.
“You end up feeling like, ‘I hit the jackpot,’ ” Cadman said.
Curated bags of clothing from Los Angeles-based Golden Tote cost $49 or $149, but their values are pegged at $250 and $600, respectively, said company co-founders Sarah Becker and Sarah Sweeney. They’re best known for clothing line Puella, which is sold at Anthropologie and has been worn by celebs including Kate Hudson and Jennifer Garner.
At the start of every month, the fashion duo launches an online offering. akin to what’s become a flash sale, that features mostly shirts, dresses and skirts. Customers can go one of two ways: Pick one item and get surprised with an extra item or two for $49. Or for $149, pick two items and get a mix of up to five items.
So how is it possible for companies to offer such good deals and still turn a profit?
Companies like Birchbox, in addition to subscription services, also run online shops. Customers who were happy with their samples can buy the more expensive, full-sized versions as they please, said Cadman of My Subscription Addiction.
Companies like Golden Tote tap into wholesalers. Others get free samples from startups that want publicity. Some, like monthly snack provider NatureBox, make their own products, which can cut out the middleman and control supply, Cadman said.
It’s unclear exactly how many subscription services exist and how much they make. But there are some metrics.
Investors have infused $388 million into the subscription e-commerce business during the past two years, venture-capital tracker CB Insights reported in October, the most recent data available.
Deals and funding levels, however, have cooled overall since the fourth quarter of 2012, when subscription-box funding hit a high of more than $103 million, CB Insight data show.
Not all companies in this box-of-the-month market turn out to be winners.
Some boxes may lack big-ticket items, raising questions of value. Some may be missing the mark by matching clients with poorly suited items.
Reviews also can affect the chances of survival for a curated box. Cadman started My Subscription Addiction 18 months ago because, at the time, there were few places where consumers could find the pros and cons of a box.
“People want to see photos and get a sense of value before they subscribe,” said Cadman, who tracks 80 boxes.
Companies planning their own subscriptions need to be different, she advises. Successful services have bred a slew of copycats that may have trouble standing out.
“If it’s dog food, what’s your niche?” Cadman said. “How do you differentiate yourself from BarkBox? It’s hard to compete at that level.”
Myers, of River & Bridge, said personalized cards are an untapped market in the subscription world. But they can be challenging because it takes focus to make sure the right cards get to the right people, as orders grow. She also learned over time what her service was worth. She originally priced her monthly box at $10, but as she saw how much work went into one box, she increased the price to $14.
“Do something you’re passionate about,” said Myers, who’s taking a short break from bridgebox to have a baby. “It’s not just about the money. (For me) it’s the joy of getting it into people’s hands.”
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A SAMPLE OF SUBSCRIPTIONS
-Golden Tote: Personalized bags of clothing. Pick one item and get surprised with another item or two for $49. For $149, subscribers choose two items and get a mix of up to five additional items. The Los Angeles-based startup’s sales are held at the start of every month. Site: http://www.goldentote.com
-iHeartMD: Monthly box of five to eight health items, from coconut water to dehydrated fruit. The items are approved by a panel of 10 doctors. The business is based in Orange County, Calif. Plans range $24 a month with a yearlong commitment to $30 if doing month-to-month. Site: http://www.iheartmd.com
=River & Bridge: Typical orders are eight personalized cards with envelopes and stationary extras tied to a specific holiday. A monthly subscription costs $14 plus shipping, which is typically $3. Firm is based in Mission Viejo, Calif. Site: http://www.riverandbridge.com
-Quarterly Co.: Are you a fan of musician Pharrell Williams? Or “Project Runway” judge Nina Garcia? You can subscribe to themed packages with items picked by some of your favorite stars and influencers. Leading the Los Angeles-based startup is Mitch Lowe, a co-founder of Netflix and former Redbox executive. Plans range $50 to $100 per quarter. Site: http://www.quarterly.co
