3-6 how to start a subscription box...
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HOW TO START A SUBSCRIPTION BOX COMPANY
BY LORI PETERS
COPYRIGHT 2013
Congratulations on taking the first step to starting your own
subscription box company. This is a successful proven business
model that can be started for under $1,000.
What is a Subscription Box?
A subscription box is a box of goods that is sent out to customers
on a monthly basis. Customers sign up and pay by the month,
every three months or annually. Originally there was a fruit of the
month club. People would get a different box of fruit each month.
One month it could be apples; the next month a box of pears
would arrive at your door.
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Now monthly boxes have turned into a very popular and lucrative
web-‐based e-‐commerce business.
My company, Boxmonthly.com Copyright 2013
What Will Be in Your Box?
What are you passionate about? What fascinates you? What do
you know about or what field have you worked in before? Do
you have a job or connections to a certain industry? The more
you know about what you are selling, the more successful your
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subscription box company will be. Remember, you need to live
and breathe this 24 hours a day. Does that make you want to
start a food box or are you a beauty box person? Do you love
spending hours playing at the makeup counter and cutting a
friend’s hair? Then you might want a beauty box like Birchbox,
GlossyBox, NewBeauty Test Tube or Beauty Box 5. Are you a
candy connoisseur? Then you might want to sell old time ribbon
candy, fudge or saltwater taffy. I would highly suggest subscribing
to about ten subscription boxes to see what the competition
(other subscription brands) are doing.
This is 12 Society Subscription Box for Men at $39. It is a joint
venture with Nick Cannon and other celebrities.
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What are you primarily interested in? What is your passion?
Small niches are better to choose.
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How would you describe your box to customers to get them
excited about subscribing to it?
What makes your subscription box idea unique?
What products or images appear to you or can you see being part
of your subscription box?
SOME CURRENT SUBCRIPTION BOXES
There are many different kinds of box subscriptions.
Beauty Boxes like Birchbox and Glossy Box Food Boxes such as Foodzie or Love with Food Natural/Eco-Friendly Boxes like Conscious Box and
Klutchclub. Fashion and Accessory Boxes like Little Black Bag
and Style Mint Baby and Kids boxes such as Baba Box and Teethe
Me. Pet Boxes for Dogs and Cats like Best Friend Box and
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Barkbox. Men’s Boxes like 12 Society and My Platinum Box Craft Project Boxes like My Dream Box and Whimsey Box Specialty Boxes like Art in a Box or the Book Box
Picking Out a Name for Your Subscription
Choosing a name for your company is an extremely important
step. This will be your brand and the name of your website. Your
name will help your customers and Sponsors will find you
amongst the gigantic world wide web.
When you come up with a name for your subscription box, you
want it to be memorable. Try to describe what’s in your box with
your name. If you were selling golf clubs, you might want Golf
Club Box. If you are selling gadgets, you could call it Gadget Box
or Geek Gadget Box. If you were selling Italian pastries, you might
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want to use the name, “Cannoli box” since canollis are a type of
cream-‐filled Italian pastry. Quite yummy actually. Use familiar
words like Boxmonthly. This is the name of my subscription box
and website.
Familiar search words also makes your website easily searchable
by Google, then a lot of people land on your webpage and
hopefully buy your subscription box. Do a search on
Godaddy.com to make sure the domain you choose is available in
.com and .net. You don’t want to come up with a fabulous name
to find out somebody else already owns the website. You have to
be pretty creative. Lots of names are already taken. Do you want
to use real words or made up words? Existing words are easier to
remember. Zappos, means shoes in Spanish. That’s easy to
remember. Etsy sells crafts, but is not an English word just a
name somebody made up. Probably crafty wasn’t available and
they just played with words until they found one that wasn’t
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taken. For example, Sample Society explains what you are getting
in their box. This is the name of a beauty sample box sold by
Beauty Bar that comes with an Allure magazine subscription.
Allure promotes the box in their magazine.
Start Thinking about What You will Be Selling
When you have a subscription box company idea you have to
know what is going to be in your box. Know the sizes and weight
of your products.
Will they be samples or full size products?
Ask yourself who your subscribers will be and how are you going
to market to them?
Where will you locate subscribers or where will your customers
find out about your box? Is this your first e-‐commerce venture?
If you already have a mailing list from a previous website,
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announce your idea for your upcoming box. This is great
promotion.
Build Your Website
Look at other subscription box company website. See how they
are set up. There is a very specific pattern. See how others are
doing it. Have a Contact Page with your company name, email
and if you choose your phone number.
You need a “HOW IT WORKS” page to explain your process of
their subscription order.
You can also add an FAQ page to answer common questions. You
will need photos of a sample box to show them what they will be
getting from you if they subscribe.
They need to know the cost, the specialty, how often they will
receive a box and of course a price. You can also choose to sell
month by month, every 3 months or ever year. If they decide to
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subscribe for a year and pay up front, usually they get a nice sized
discount. The discount could be equal to two free months. For
example if you are selling your box for $20 a month, you could sell
three months for $50 and one year for $100. Of course this is up
to you. I am just offering you some numbers to work with.
Do you know anyone who you could hire to create your website?
Do you know anyone that would do a low cost website?
Make sure your website looks professional. It represents your
brand.
How Will You Collect Money and Get Paid for Your Box?
You need to have a “call to action” on your website. That is what
do you want them to do when they are on your website. You can
set up a Subscribe now button.
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I use Paypal to collect money. If you have ever used ebay, you
might already have a Paypal account. Paypal is an easy way to
keep track of whom you have sold your subscriptions to. This way
you know who paid for subscriptions and that they are due a box
for the month of January or February for example.
Paypal will directly withdraw the monthly fee from your clients’
credit card or debit card they have on file each month. You can
then transfer the funds to your connected bank account. You can
easily keep track of all the money you took in for the month
online.
You can apply for a Paypal debit card as well. Then you can take
your Paypal funds directly out of the bank if you choose. You can
access your money, customer e-‐mails and addresses right from
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Paypal’s site. They will even print shipping labels for you.
Customers also feel secure with Paypal. They know they are safe
giving their credit card information. Paypal does charge a small
percentage of the price for the transaction. You will need to open
a business account at Paypal. Also in the case that a subscriber
needs to cancel their account. They can do so directly through
Paypal.
You can investigate other companies to use that will take credit
cards for you and handle the subscriptions as well. Do some
research.
DO A BETA TEST
Make sure you do a test on your website by sending out some
free boxes to friends and associates or followers, groups. This will
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test out your website system of payments, addresses, shipping,
data collection etc.… are all working properly. You can also obtain
feedback regarding your box’s presentation. Find out how people
enjoyed the samples in your box and ask them to fill out a brief
survey and give feedback.
SOME QUESTIONS TO ASK FOR FEEDBACK IN THE BETA TESTING
STAGE
1 How did you like opening the box?
2 Did your package arrive in excellent condition?
3 Were you surprised?
4 Did you enjoy the contents of your subscription box and find
value?
5 Which product did you like the best?
6 Have you ever used any of these products before or did you
know of them?
7 Would they recommend your box to their friends?
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8 How did you feel about the value – the price you paid versus
what you received?
9 How did this box compare to other subscriptions you have
tried if any.
This step is called Research and Development. Remember, your
new subscribers will be so excited about receiving your fabulous
box in the mail; they will review it for their friends and followers.
You want the first impression to be a great one.
Money/Funding
You need to create a business plan and figure out how you are
going to fund your box company? Do you have your own money
to invest? Are there other family members or friends that want to
invest or be partners with you? Will you be getting a small
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business loan? Do you want to get a Venture Capitalist to invest
in your company? What contacts do you have in Internet
funding? You may be able to start your own subscription box
company for under $1000. That is called boot strapping.
Shipping Costs
How will you ship your boxes out? If you already have an account
with a shipping service like “Fed Ex Ground” you might get a
company discount. Fed Ex Ground is good for shipping larger
boxes. Shipping is a very important factor to add into your costs.
You don’t want to spend $10 on shipping and sell your box for
$12. Generally shipping fees are included in the price of your box.
Although you can charge separately. I find customers assume the
shipping fees are already included.
Birchbox. Beauty contains all small samples and weighs no more
than 3 oz so it costs less to ship then some weightier boxes.
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Business Plan and Proposal
You need a business plan and proposal to get started and show
other people what you need for your company. You will be a
start up. A startup is a new company that is starting up on the
Internet
What are your office costs? Will you work out of your home?
What are your supply costs and printing costs? Do you have
staffing costs?
Creating a business plan and putting numbers down is very
important for any business. This lets you know how you will make
money and what it will cost you to start. You may not come out
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in the red your first six months. Get some advice from a financial
adviser or accountant.
KEEP NOTES AND PLAN YOUR TIME AND STRATEGY
Congratulations on coming this far. You are working hard and can
soon have a successful subscription box company. I hope you are
highlighting and taking notes. Have a separate notebook where
you keep your Things to Do List. There are a number of steps you
must take to get started. Be brave and take one step at a time
and continue moving forward. Brainstorm with other people you
work with or your friends.
Note: I have not talked about whether you have another job or
not. This does take time and you have to be dedicated and
disciplined to run a Subscription Box company.
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WHERE WILL YOU OBTAIN YOUR PRODUCTS?
Where will you obtain your products?
What kinds of business are you passionate about?
Who do you have connections with? What businesses have you
already worked in?
It’s best to start with people and companies you already know.
If you have already been selling candy then you may already have
connections to Candy Companies like Nestles or Hershey’s.
There are a few ways to go about getting products for your box.
The best way is to get sponsors. A sponsor is a company who
works with you and supplies products for your subscription box at
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not cost to you. This can be a company such as a potato chip
company like Lays that has a new kind of chips they are
promoting. Maybe they are low fat or Gluten-‐free or Barbecue
Honey flavored. A brand that is promoting these chips probably
wants more people to try them out.
Do your research on companies that are in the same category as
your box. Follow them on Twitter and try to connect with them.
I found a number of sponsors from contacting them on Twitter.
Make sure you get your company name on Twitter @... The same
name as your website.
You can also search for companies on Facebook. You can directly
message a company through their Facebook page.
Another way is to contact a potential sponsor through their
website. Tell them about your subscription box company and
how you can help them by promoting their brand in your box and
on social media.
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This will be a Win-‐Win situation. You get free products and the
Sponsor gets new fans.
Make phone calls and write e-‐mails to brands. Ask for their
marketing department.
Tell them about your subscription box company and that you will
promote them on your website and get them feedback about
their products. You will bring them new customers who have
already enjoyed their products. You can even sell the sponsor’s
product or link to them on your website. I found several sponsors
on Twitter. Search for brand names of companies that are in your
box category. For example if your box had chocolates, you might
want to search for Nestles and Hershey’s.
Companies can include brochures, product descriptions,
instructions and coupons when they include their product in your
subscription box. I obtained a lot of sponsors on Twitter. Search
for brand names of companies that are in your box category. If
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you are selling a beauty box, you could follow L’Oreal and
Lancôme. If you want to offer cookies try Chips Ahoy or a smaller,
newer cookie company. Often companies have a new product
that they would be like to get exposure on. You could tell them
that by being included in your subscription box would give them a
great opportunity for new customers. A sponsor will ask you how
many samples do you need? Think about this. Do you need 50,
100, 500 products from a sponsor? Will you need full size or
sample sizes? What is the minimum amount you need for your
customers? How many can you have in your box? How big a box
do you have and how much can fit in it? Sponsors like feedback
from your customers in exchange for supplying you with products.
You also always want to know what your customers are thinking.
Just as in the Beta Test, after a customer has received your box,
send them a short survey to ask them about the samples they
received.
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SURVEY QUESTIONS
How did you enjoy your first box of …
(Let them rate it with multiple choice of 1-‐3)
1. I loved it. I enjoyed it thoroughly.
2. It was OK. I liked some products
3. I wasn’t too thrilled with it.
(if so ask them why.)
Could you tell us what you loved about our box and
what you would suggest we change? Are there other
products you would like to see included?
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Also ask questions for each brand in your box.
1. Is this the first time you tried Cherry Coated
Cinnamon Crunch?
2. Would you recommend it to a friend?
3. Would you buy it for yourself or your family?
This is great feedback for your sponsors. They will be
very pleased with all the information you provide and
may give you other products to include in your
subscription box in the future.
Often companies offer a point system for customers
filling out surveys. Birchbox does this. Later
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customers can use points to buy other products you
sell or towards gift boxes.
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USE BRAND NEW PERFECT PRODUCTS IN YOUR BOXES
Make sure all your products are brand new with all labels in place.
They need to be wrapped separately in bags that have not been
opened or used. No creases, no spots, no wrinkles. It can’t look
like somebody just took some Baggies and threw a few Oreos in
them. Your products should look appealing. Food needs to be
sterile. Products should be in its original packaging and
unopened. Think how you would like to present a birthday gift for
your best friend.
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Packaging and of Course Your Boxes
You need to have a pretty box or even your bag. (There are box
companies like Glambags that use bags to put their samples in.)
Your presentation should look like you got it from a fancy store
like Bloomingdales. Remember this is your brand. You want to
make a great first impression. If you can get a box color like pink
or blue that would be great. If you can get your company name
and logo printed on the box that is fabulous. You can use labels,
but be careful. They need to look perfect and very professional.
Inside a shipping box you could even have a gift bag. Frilly,
ribbons, the fancier, the better. Colored tissue paper or shredded
color paper is used for packing. An oversized-‐post card describing
all items in your box with instructions on how to use the products
needs to be included. You can ask your sponsors for brochures. If
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you use a sponsor’s name on a card, make sure you use their
image and logo.
Maybe try a theme box like winter sports or Halloween costumes
to sew, explain it on the cards. Cravebox is very popular for
theme boxes. They even hold Twitter parties to publicize their
new boxes. If you can come up with an idea that’s unique this can
be part of your branding. Subscribe to other box companies and
see how they send boxes out. Watch YouTube videos of
subscription box openings.
Element of Surprise
Customers want to be surprised. Try not to reveal the content of
your box in advance. The fun of subscription boxes is that it’s like
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every month is your birthday so when you receive your box it’s a
fun surprise, because you never know what you will receive.
Uniformity
It's better if most of your subscribers get the same thing in their
boxes. If you are sending Lancôme full size mascara than you
can't send another subscriber some no name sample size eyeliner.
Subscribers compare notes frequently and they don't want to feel
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gypped. It’s OK if you send an Estee Lauder Lipstick in one box
and an Estee Lauder mascara in another. If you can, make them
identical.
When a New Customer Signs Up, You ask them about
their Tastes, style or size if applicable.
In the age of the anonymous user in the Internet it’s nice to make
your customer feel special. Treat each customer as an individual.
Have them fill out a survey on their wants or needs.
Are you fair skinned or dark?
Do you prefer Pink or Green?
Do you like hot spicy foods or sweets?
When is your birthday? You could send them something extra that
month.
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Who is Your Subscriber?
Are you selling to men or women or children or mothers or cigar
smokers or people who play golf or girls who fish? There are so
many niche areas. If you start out selling a women’s box you can
always start a man's box later on. You can also sell related
products in your niche on your website to increase revenue. You
can link to sponsor’s products or sell them directly if they prefer.
Also you need to decide what countries you will sell to. This is
very important in terms of shipping costs. Set that up in Paypal or
whatever payment system you use. It can be expensive and time-‐
consuming sending to many countries. It is OK to refund money
to a customer if they are in France and signed up and you can’t
ship there.
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More on Box Contents
How are you going to get your products for your subscription box?
Are you going to buy them or maybe you had a store and sold
make up or owned a hair salon and just have a lot of hair products
in your house. Drop shipping (when you buy products on line
from another company and they send out your box) is not a good
option for a subscription box since there are too many details to
attend to for a professional subscription box service.
Originally subscription boxes started out that people all got
products from a sponsor or manufacturer’s brand for free. Now
E-‐ commerce business is growing and changing so fast. People
are selling lots of different things like ties or sunglasses. There's
Dollar Shave Club that sells razors, companies that sell diapers so
you have lots of choices. The most important thing is to know
your audience and their needs. What problem are you solving for
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them? Are you saving them a monthly trip to the drugstore or
getting them new socks to try out?
Pricing
Your first marketing source is your own website. Tell customers
how to sign up, how it works and what they can expect in their
box each month. If they are getting $60 worth of products and
you are selling them a box at $25 a month they are getting a great
deal.
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You can sell them a month for $25; if they sign up for 3 months up
front you can give them a break so it would be $65 instead of $75
saving them $10 per month. If they sign up a year in advance they
could get 12 months for $270, a savings of $30.
Make sure you are priced competitively for your market. If
everyone is selling dog subscription boxes for $25, you can’t sell
them at $45 a month. I worked PR and marketing at
Bestfriendbox and explained to the owner, Natalie that they were
losing customers, because they were $20 a month more than
their competitors. So they changed their price point. After they
lowered their prices their sales rocketed.
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MARKETING – SOCIAL MEDIA
Social media is great for selling subscription boxes. Make sure
you have your company name on Twitter, Tumblr and a Facebook
page. Search Twitter for subscription boxes. You can see all the
different subscription box companies and who is following them.
Then you can follow some of their followers. Also once you start
tweeting about your box and give discounts of promo codes, you
will get your own followers.
Facebook: You should get a Facebook Page with your
subscription box company name and logo. Post on it as often as
possible with pictures, events, promotions and user comments
and reviews. You can have contests and giveaways, especially
when people get their friends to “LIKE” your page.
Pinterest : Pinterest can be your best promotional site if you’re
smart. It is a bulletin board of pictures, website links (disguised as
pictures). It is 70% female. Start a page and repin fan’s pictures.
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Advertise your promotions, specials, themed boxes and products
or sponsors. Be creative. It’s changing all the time.
A word about the” Vine “ app. As I am writing this Vine has been
on the iPhone slightly more than a week. It is owned by Twitter
and I expect it to be extremely popular. Try putting up a few 6-‐
second videos. Use a hashtag # sign with a subject like #beauty
#subscriptionboxes, #spring. Also use these Hashtags on Twitter
and Google+. These are used for people searching. You will be
surprised how fast your company can grow with social media.
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Mailing List
It’s incredibly important to have a mailing list. Start
building one from friends, colleagues who might have
interest and people who sign up on your website. When
you sell on Paypal you will get your customer’s emails
automatically in the detail section of the sale. Keep track
of them on a list like http://mailchimp.com. You can
actually use their plugin on http://Wordpress.com to get
subscriber sign ups or set them up on whatever website
you are using. You should give readers a free, small gift to
encourage people to subscribe to your newsletter. It
should be something your niche would enjoy learning or
doing. It could be a how to guide or a gourmet jelly.
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Newsletter or E-‐mail Marketing
Once you have a mailing list set up, you can start a simple
newsletter. The newsletter is a terrific way to keep your
subscribers or potential customers up to date on what the
latest news is at your company. Give them some insider
secrets so they feel like they’re in a special club. You
could tell them if you have a special theme box coming up
like a New Year’s Resolution Box with a fancy journal and
some blue crystal pens to write their resolutions down or a
Winter Time Warm Me Up box filled with yummy hot
drinks for when it’s cold outside.
Ask your subscribers to feel free to forward the e-‐mail to a
friend or even tweet it if you give them a link. Make sure
you thank your customer a lot and treat them like they are
your cherished friend or family member. Gary Vaynerchuk
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wrote a book called The Thank You Economy that teaches
you how to reach out to your customers. I also studied
with Chris Brogan who says how helpful it is to remember
that you are always dealing with people not numbers.
Interesting story. The other day I was interviewing NY
Billionaire, Donald Trump. The new All Star Celebrity
Apprentice is coming on NBC this Sunday. Trump was on a
red carpet with other celebrities like Brett Michaels from
Poison and Billy Baldwin.
One of the other reporters was complimenting Trump a
lot. She loved his pink tie and told him he is so
knowledgeable about business. Donald Trump said, “I like
this girl. She knows what she’s talking about.” Even a
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billionaire businessman is susceptible to a little flattery. I
was just going to ask him to tell me, “You’re fired.”
Blog
You need to have some sort of blog for your subscription box
whether it be on Tumblr or on your own website. This keeps fans
abreast on all the latest news at your company and what they can
expect for future boxes. Always put links to Social Media sites so
they can send your blog to all their friends.
You can sell past boxes if you have extras of say January and
February or a special themed box. You can also give some to
bloggers to review.
Promotions /Affiliates/Brand Ambassadors
There are a number of ways you can bring in more
subscribers to your site. Tell your current subscribers if
they recommend a friend and the friend buys a box, you
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will give them $3 or a free product in their box. It is up to
you how much you want to give away. Remember though.
You are getting a new customer who will be buying from
you each month. If you give out a few dollars to bring
them in, you’re still ahead of the game.
Affiliates:
You may want to work with an affiliate company like
Linkshare or Shareasale or CommisionJunction. When
using them you create banners or links for other websites
to post to advertise your product. If somebody buys a
subscription or an item off your website the Affiliate gets a
small percentage. You have total approval of which
websites you allow to post your links and banners. You
want to make sure you are happy with what they are
doing on their site as they will be representing you. Some
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companies call them Brand Ambassadors and hire
individuals to spread the word on your company and give
them a percentage.
YouTube Videos
People love getting boxes and sharing their prizes with the world.
Subscribers enjoy reviewing boxes or as they call them “Box
Openings”. I suggest you watch some YouTube box video reviews.
A lot of fans are addicted to it. They try to be the first one to get
their latest box review on YouTube before anyone else. This is
fabulous publicity and promotion for your box brand and it’s free.
Encourage reviews. You can even reward fans with prizes or post
the best reviews on your blog or Facebook page.
You can also contact bloggers and give them a free box to try out
and review for their community. This will help expand your biz.
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Try reviewing a few subscription boxes yourself just for practice
and to get the hang of what’s included and presented. You will
see why it’s such a thrill to get a surprise in the mail each month.
This is great, because you don’t need advertising. This is a word
of mouth biz. At first you feel like you don’t have any subscribers
than it can explode and 1,000 people are ordering your boxes. I
know this sounds like a good problem to have. However, you
need to be prepared. Don’t sell more than you have. Start a
waiting list.
Reviews/Bloggers
Bloggers will start to contact you to review your box. Check out
their websites and/or their YouTube channel. Do they have a
large audience and comments on their blog? Another great thing
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to do is giveaways and contests. Giveaways can be on Social
Media or a reviewer’s website. This attracts new people
Press/Media/PR
It’s excellent to get press for your new subscription box. You can
get a press release written and send it out to newspapers,
magazines, TV shows, blogs, and websites. There is a company
called HARO – Help a Reporter Out, which is sometimes used to
gain an expert for a podcast, news show or magazine. Write to
them. Write to TV shows. Sell at gift shows. Become an expert in
your field. Do interviews, answer questions. Have an event in
your city and invite fans.
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Celebrity Endorsements
If you can get any celebrities to endorse your subscription box
that is great publicity. Try sending a few out to Celebs. Write to
them. Search their interests and see which one might be the
perfect customer for your subscription box. If you have a pet box
or a beauty box that’s pretty easy to do.
Later as you Grow Your Company
You can sell other items on your website. Full size products or
related products. You can also do special occasion boxes, themed
boxes, best of or Instant Boxes. These can be a wedding box or a
box of your customer’s favorites. Instant boxes have just been
started by Cravebox. They are a lifestyle box, one that basically
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can add anything fun, tasty, or useful to their product line. You
can add a men’s women’s or kids box to complement your other
boxes. Think of giving out points to customers that they can use
to buy from your store. Customers can obtain points or credit
from responding to surveys too. You do not need a price on your
samples in your box. In fact if there is one take it off.
SOME OTHER SUBSCRIPTION BOXES Health and Beauty Blissmobox New Beauty Test Tube Birchbox Loose Button Beauty Mint Trinkets Baby and Parenting Wittlebee - Kids Clothing Club - Wittlebee
Reviews
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Babbabox Citrus Lane Little Passports Bluum Food
Love with Food Joyous – (Previously Foodzie)
Healthy Surprise PaleoPax
Lifestyle Boxes Cravebox
Loot Crate And many more. Search Google for subscription boxes and sign up for a number of them. Usually you can find a discount code (a code to be put in when you check out kind of like a coupon). Test them out. See how often they e-mail you. It is really important to start a mailing list. Look at their websites. Review other subscription boxes. It’s fun getting a surprise in the mail each month. That is what you are selling when you sell your subscription box.
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Thank you for buying this e-book. Good luck in
your subscription box endeavor. Let me know of your progress and feel to write me at [email protected]