December 6, 2016

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Birchbox

birchbox_box

Selling free samples by subscription?

Coming up- how two young women cracked the conundrum of online beauty shopping.

Hayley Barna and Katia Beauchamp met at Harvard Business School. Entering their final semester in late 2009, the pair was eager to come up with a business idea.

In the past decade, the rise of ecommerce had affected everything from grocery shopping to high-fashion. But there was one niche they felt hadn’t met its true potential: Beauty products.

The beauty industry is so heavily dependent on customers trying and sampling new products that it didn’t seem particularly suited to the impersonal world of online retail. After some contemplation, the women had a breakthrough:  Take the product samples that high-end beauty companies were already making and combine it with a personalized subscription business model.

Voila. Birchbox was born.

The model works like this:  for $10 a month, subscribers receive a box in the mail every month, filled with product samples from top-name beauty brands. The “birchbox” can contain everything from eyeliner to hair ties.  Samples are tailored to each subscriber based on a “beauty profile” the user fills out.

Birchbox teamed up with big name beauty companies eager to get their latest and greatest products in the hands of new customers. And Birchbox offers all the products for sale on their website. For every additional purchase a user makes, they earn points which they can cash in for even more samples.

Subscriber love trying new products every month, and suppliers love finding new enthusiastic customers. It’s a win-win. And the word is spreading.

To date, Birchbox has raised 12 million dollars in venture capital. They now staff 60 full-time employees, and their Birchboxes go out to 100,000 subscribers every month.

Hayley Barna and Katia Beauchamp exemplify one of our business axioms for entrepreneursThink Niche within a Niche.

A subscription service for personalized beauty product samples.

Now Why Didn’t I Think of That?

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