Editor’s note: This article was first published in July 2013; the subscriber numbers, revenue figures and prices it gives for subscription services such as BirchBox, BarkBox and BlackBox are all from that time.
This isn’t the first time we’ve talked about the subscription business model, which basically means paying a monthly or yearly fee and receiving products every month. Many entrepreneurs dream of building this kind of business model because it gives us clear advantages as business owners: we know how many products we’ve sold and how many customers we have, and we also avoid cash problems. With a subscription service, the company collects the monthly or annual payment first and delivers the products afterwards. Want some ideas for subscription businesses?…
For a change, we’re heading to the United States and the United Kingdom, where this kind of business is booming. Consumers there are well aware of the advantages of buying this way. A while ago we talked about HallMadden, a company specialising in shirts for executives: for an annual fee, you receive three quality shirts every month. In clothing, a subscription service could prove quite innovative and lucrative in Spain.
In the cosmetics business, there’s BirchBox, which by the way is already in Spain: for €130 a year or €13 a month, you receive a box every month with beauty products matched to your preferences. BirchBox already has more than 60,000* subscribers and must already be passing 6 million in revenue.
* Update: I’ve been told that the current number of subscribers worldwide is over 400,000.
Pets also generate profitable businesses. Just ask Matt Meeker, founder of Barkbox, a subscription service for dog food and other “treats”. The company already has 50,000 subscribers and is billing 1 million dollars a month.
After that company’s success, the same entrepreneur (Matt Meeker) decided to create another, more innovative subscription model, also focused on pets, called Barkcare: for 199 dollars a year you get a 24/7 helpline for any question, query or emergency involving your pet. For example: what kind of insurance do I need for my dog, which vaccines are mandatory, and so on. This entrepreneur has set himself the goal of building a company worth 5 billion. Maybe one day we’ll see it listed on the stock market.
And finally, there’s a new company whose business idea thinks big: a VIP subscription service where, for 150,000 dollars, you’ll receive a mystery gift at your door or at the hotel where you’re staying.
Many of you will think you’d have to be crazy to sign up for this. Well, BlackBox is a UK company that aims to become the most exclusive subscription service in the world. It already has 30 subscribers.
Although it isn’t very clear what the VIP subscribers will receive, the company says the gifts are highly exclusive, some of them limited editions, for an exclusive customer profile.
Further reading
Featured image: PookieFugglestein, CC0 1.0, via Wikimedia Commons.
