Are Subscription Box Services Worth The Investment For Indie Beauty Brands?

In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask eight founders and executives: Have you participated in a subscription box service and, if so, was your participation worthwhile?

Stevonne RatliffFounder & CEO, Beija-Flor Naturals

Yes, with Onyx Box. It was hard for me at the time because I was hand-making all of my products, and I needed thousands of units. I planned a production schedule for more than a month in advance to keep my goal of completing the products.

Overall, it was worth it. I obtained new customers and got a lot of visibility within my target demographic. A good way to go into this experience is by looking at it as a marketing opportunity and not bet on tons of sales. You will get some loyal customers from the experience if the subscription box you chose is a good fit, and you have a great product.

Stephanie KimCEO & Co-Founder, Moonlit Skincare

We have participated in Ricky's Cult Crushes Box and Bikini.com's Wanderlust Box, and there are a few others in the pipeline. Choosing to move forward with these two boxes was a very strategic decision. Both Ricky's and Bikini.com were already established Moonlit retailers, so it was about investing in that relationship and ensuring our brand would be seen by their audience.

These teams were wonderful to work with. We partnered to schedule social media giveaways to leverage their large social audiences, increase our own social following, and build brand buzz within their respective communities.

My advice for participating in subscription boxes: Test the waters. Start slow. Start small.  We've been invited to participate in the biggest subscription boxes. However, the quantity - 100,000 to 500,000 units - was too high for us. You're not just sending free product or product at cost, you also have to factor in shipping costs for bulk amounts, and glass is heavy.

Shilpi JainPresident and Founder, Skinveda

My experience was not that great. The subscription box service we signed up with was a small enterprise and needed 300 full-sized free units sent to them in order to avoid a marketing fee and be included on their website. Being new in this field, I took the risk.

Once all this was done, they sent out just one email blast and Instagram post about our brand to their customers. We got roughly 15 orders within a span of two years. We were disappointed as we spent a lot more than the exposure we received. That being said, there are some niche subscription boxes which can actually boost your conversion, and be a great marketing and brand awareness tool.

Nicholas KarnazeFounder, Stubble + 'Stache

We’ve sampled twice with the same subscription box service BirchboxMan, and both experiences were wonderful. The first time around the company didn’t pay us for the samples because it wasn’t part of their business model at the time. We provided the samples, they distributed to their subscribers who then, after trying – and loving – the product, would buy the full-sized product directly from the subscription service’s ecommerce website.

Ideally, we would have made our money back by selling our full-sized products wholesale to the subscription service. I expected to recoup our investment in a short period of time following the sampling, but we learned that subscription service conversion rates are similar to online conversion rates, so it took us closer to a year to make back the money we initially invested in the samples.

The second time we sampled, the subscription box service did pay us for our samples, though it was less than half of the samples actual cost. We produce in small batches and are very particular about the quality of our ingredients, so I never expected to make any money off the samples themselves given our high cost of production.

If anyone is interested in sampling, they shouldn’t go into it expecting to make a profit from the samples themselves unless, of course, their product costs are very low. We view sampling as a great way to test the market and gather feedback from discerning men who value quality grooming products. And, for us, that is worth the cost.

Kristen O'ConnellFounder, Flora•py Beauty

We have participated in several boxes over the years. The first box we did was one of the majors and, in hindsight, ended up costing us massively in terms of donated product. We did see a big peak in sales from the exposure, but not nearly enough to even come close to making up for the expense we incurred.

After learning from that lesson, we have chosen to partner with some other boxes with much smaller distribution that we really felt matched our target audience. They also contributed a small fee per product to help offset some of the product cost. In those instances, we felt the exposure and marketing expense were worth it.

I think the most important thing to consider when deciding to participate in a subscription box program is if you are willing to support the marketing expense. Don’t ever rely on these programs to make a positive contribution to your bottom line.

Katharine L’HeureuxFounder, Kahina Giving Beauty

We have participated in several subscription boxes, including Birchbox in the early days when the minimum quantities of samples required to participate were more doable. We have found success with more targeted boxes featuring full-size product that clearly communicate our brand and message through powerful imagery and detailed content in support of the product.

Subscription boxes such as Beauty Heroes, Petit Vour and Art of Organics have been wonderful to work with and have shown real respect for the brands they enlist. They understand that product is not free and contribute to the cost of production as well as following through with meaningful marketing support. What we have found particularly impactful in our participation with them is that each has a strong ambassadorship program, allowing us to engage with influencers and significantly increase our reach.

Melissa KimbellFounder, Awake Organics

Last year, we launched Aura Clean Deodorant, which is a cream deodorant in a glass cosmetic jar. It’s the kind of product that has to be tried because it’s very different from what most people are used to, and it has an incredible smell.

We decided to use product sampling to get Aura into people’s hands and working with subscription boxes was a shortcut to reaching thousands of potential customers. It was easy to approach partners with our natural deodorant because it’s on-trend, premium and isn’t too niche. A subscription box partnership is a two-way street, so you need to have an offering that their audience will be excited about and will generate new customers for them as well.

We chose one conventional box (You Magazine, 2,000 units), and nine or 10 smaller, indie box partners who shared our ethos, and would most likely have a following that would engage with our brand like The Cruelty Free Beauty Box, Merkababox, and Skin Organics Beauty Box.

Some partners paid for product at cost, and others expected it for free, including delivery. In the end, we gained exposure on social media, got valuable press coverage, and created lasting relationships with some of the partners.

I will say it’s hard to measure the success of subscription boxes in terms of sales because it’s difficult to track the orders they generate. I’m not sure I’d recommend this strategy if increasing sales is your number-one short-term goal, but it’s excellent PR.

Also, don’t make any assumptions that a partner will promote your brand beyond one tweet. Make sure you’re clear on exactly what type of promotion you will receive and when, from your partners, especially if you are providing free product. We learned this the hard way at first.

Susan WongFounder, Han Skin Care Cosmetics

We have done quite a few. We’ve done Birchbox, Boxycharm, Organic Bunny, Petit Vour and Vegan Cuts. I think they’re worth it. It’s a great way to build brand awareness, get your products into the hands of more people and acquire new customers.

To evaluate the success of beauty box participation, we look at our analytics the month we are featured and the following month. We look at the impact on sales and if there’s a spike in traffic. It can be difficult to figure out the ROI. People may be purchasing on Amazon after we are featured in a box, and we can’t exactly tie that back to being in the box.

If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, please send it to editor@beautyindependent.com.