Problem: How to start a subscription box service
After seeing what Birchbox did with subscription-based make-up products, Liam and two of his long time friends decided to do the same thing with dog treats and toys. They grew up together and they knew that they wanted to start a business together as well. So Liam took the knowledge he had gained from his previous entrepreneurial endeavors and started BusterBox.
I just knew that with BusterBox, it was going to work.
The Parts of a Subscription Box Business Model
Step 1: Product and Customization
One of the most difficult parts of having a subscription box service is the personalization and the customization of each box. There are so many different types of products out there, to narrow down an entire line of products by characteristics and unique specifications can be difficult depending on how much customization goes into each tier your subscription box company offers.
Even with dogs, you may need to personalize depending on allergies, breed, size, behavior, toy preferences–and that’s just for dogs. Consider the personalization needs of people.
The box contains healthy treats and fun things you won’t typically find at a petshop.
We like to keep it simple on the front end so […] and when you actually get the customer into your system and they’ve signed up, we can cater to them then.
Step 2: Customer Acquisition
BusterBox is a great example of how classic advertising and marketing techniques never go out of style, no matter what the trending marketing gimmicks are, especially word of mouth. Since people search for individual products (dog toys for example), it can be hard to sell or design Facebook or social media ads because the individual items in each box are different. That is why word of mouth was BusterBox’s most powerful tool. Satisfied customers would comment and like their products on their pages, interested customers would sign up for email lists and competitions, etc. With that as their foundation for a customer base, they were then able to utilize Facebook chatbots to gain a wider audience.
Step 3: Fulfillment
Fulfillment can be a unique problem for subscription boxes since they often offer such varied items within one “product”. For example, one month’s subscription box can contain seven or eight different items with a couple of different variations of each in order to personalize each box. Liam and his partners and the team at Buster Box have a giant warehouse that can accommodate their needs.
May outsource the fulfillment in the future but for right now it is actually more cost-effective to package it ourselves.
Step 4: Churn
When it comes to box subscription services, a higher churn rate (in comparison to a SaaS company) is to be expected. However, there are things you can do to slow that number down: offering the same products outside of the subscription, customization & personalization, offering specials & special products during the holidays, etc.
It’s not only the dog getting excited for the product but the owner as well.
This interview is part of the How We Solve podcast. To hear more from industry experts who are solving everyday business problems, check us out on Spotify, Apple Podcasts, and on our website.
About the guest
How people can people reach the guest:
Subscription Box Course: Subscription Box Experts