0:01

So you want to launch a subscription

0:03

box and don't know where to start? Girl,

0:05

you are in the right place. I'm

0:07

Julie Ball, a subscription box coach and

0:10

your host here at Subscription Box Basics,

0:12

a podcast for new and aspiring subscription

0:14

box entrepreneurs that want to avoid

0:16

overwhelm. So grab a coffee,

0:18

some pen and paper and let's have some fun! Hey and

0:23

welcome back to Subscription Box Basics

0:26

with Julie Ball. That's me. I'm

0:28

your host. And this is episode 23

0:30

where we're talking to Mario Barrett from

0:33

Cratejoy. He's the Senior Director of

0:35

Seller Success and this is the second

0:37

episode of three where

0:39

he is kind of pulling back the curtain

0:42

and giving us some details on what

0:44

the data tells them and what he sees

0:46

as some of the most successful tactics. So we're

0:48

jumping right back into the conversation with Mario.

0:52

Okay, Mario. So what's one

0:54

of your favorite things about working in

0:56

the subscription box industry?

0:58

I have so many favorite things.

1:01

Me too.

1:01

I'll go with two though.

1:03

So the first favorite thing I have

1:06

for the most part, every subscription

1:08

box we work with is a small business, it's

1:11

a sole proprietor. It's someone trying to hustle

1:14

and make it, and like if

1:16

you talk to anyone at Cratejoy like we

1:18

are, we just love that. We love

1:21

helping. We love to build things that help you actually

1:23

be successful. And we don't say

1:25

it anymore , but our motto used to be like, like,

1:27

we want to help people quit their jobs basically. Like

1:30

we want to help them build a business to go

1:32

out and do what they love and like

1:34

have that passion. And it's why I like

1:36

it on the phone with sellers because I like to hear what they're doing. I like to learn

1:38

about, Oh my gosh, how'd you solve this situation?

1:41

That's a crazy thing you're going through right now. And

1:43

it's just exciting. And that's what I love about it because

1:45

I get to work with a ton of small

1:47

businesses and watch them grow and be successful. And

1:50

it shows me that it doesn't

1:52

matter who you are or what you're selling,

1:54

you can make it, you just have to

1:56

like really find that fit and serve

1:59

your customers like real pain point or need

2:01

and you make it, you don't have to have like some

2:04

advanced fancy degree or skill set . It's

2:06

just like just go hustle and like do

2:08

a good job.

2:08

Yes!

2:08

It's actually kind of,

2:10

it's not that simple but it is that simple.

2:12

Right.

2:12

But it's also

2:14

like the variety. The other thing I like are the variety of boxes

2:16

we see out there. I mean it's just, it

2:18

is shocking at how many different

2:21

types of subscription boxes there are. I'm

2:24

telling you when when we talk to people

2:27

that don't know about Cratejoy and like, oh yeah , like oh you

2:29

got the subscription box marketplace and the

2:31

SAAS tool. Like Whoa, "How many of you

2:33

guys have?" Like a hundred to now we have like 3000

2:36

boxes on the marketplace. It's like crazy to

2:38

think there are that many out there and

2:41

there are way more than that outside of Cratejoy.

2:43

Right.

2:43

So it's just seeing like how

2:45

people are are actually approaching this

2:47

and like redoing the model all

2:49

the time, how they're trying to connect with customers.

2:52

Because if you read a lot of stories, a

2:54

couple of years ago I was like, Oh, there's so much saturation in subscription

2:56

boxes. It's on the decline but we're seeing the absolute

2:59

opposite. While you might not have the volume

3:01

of people starting, you're actually having a higher

3:04

volume of people being more successful because

3:06

finding their niches or finding their customers

3:09

and they're actually like really fine tuning

3:11

the products and growing.

3:12

Which is so important. If you can't try to please

3:14

everybody, you've got to fine tune it and really

3:16

niche down. I always talk about

3:18

that. so that your exact

3:22

target audience should know immediately when

3:24

they see it. This was made just for me.

3:28

Oh yeah. Like if, if you ever hear a mirror,

3:30

so here's our CEO. If you ever hear him

3:32

talk about this, like he uses this like

3:34

Shetland pony example because you

3:37

can provide a box to people who love it , Shetland

3:39

ponies from all over the world and they will

3:41

immediately connect with that as the product for

3:43

me. Like that's like, it's like a box

3:46

for people who have pet, like pet pigs.

3:48

Like I mean like there , there

3:51

are those boxes and like ,

3:52

I know!

3:52

Oh my God , you're like, Oh my God, I have a pet pig.

3:54

I should get this box.

3:56

I should get this box. Yeah.

3:56

Yeah.

3:58

Awesome!

3:58

It's crazy. It's cool though.

4:00

I know it's fun to see all the variety

4:02

out there, so thank you for that. let's dive into

4:04

our topic, which is over complicating

4:06

your product. Yeah.

4:10

So this is a thing where

4:12

we, when we launch a business, sometimes

4:15

we just, we get overzealous and

4:17

we get really excited and we want to give all the people, all

4:19

the things, but it's just going to be a disaster.

4:21

And so you have to,

4:23

as we talked about, you really have to niche down

4:25

and solve that pain point. And how do

4:28

you do that? Which products are you going to provide? What

4:31

are you going to provide a community? Are

4:33

you going to provide what type of inserts and proprietary materials?

4:36

So it can get exhausting if

4:38

you try to do too much.

4:41

I agree. It is absolutely

4:44

overwhelming. A subscription

4:46

box is actually a very difficult thing to do.

4:48

Uh , it's, it's not an eCommerce store.

4:51

It's not like you're , you're not buying a hundred t-shirts and

4:53

just letting them sell.

4:54

There's so many moving parts.

4:54

Right. Then you're doing everything too. Your

4:56

operation, so

4:59

you're sourcing your merchandise and your operations support

5:02

your logistics, your marketing, your

5:05

like literally every single thing of one

5:07

and it changes every single month.

5:09

Right.

5:10

Yeah. It's like, Oh, great. but yeah,

5:13

so t he, on the complication side, we see

5:15

the, t he boxes that we see that usually fail

5:17

are the ones that do like

5:20

what you said too much for too many

5:22

people. They try to be like, Oh,

5:24

I'm g oing t o have seven different tiers of

5:26

this box and each box is going to have 19 products.

5:29

So I'm going to have, you know,

5:31

2900 like v

5:33

ariation. And y

5:35

ou're like, good luck. Absolutely good

5:38

luck. Like that's we, we want

5:41

you to be successful. But we just see the data that

5:43

it's, it's very hard to do

5:45

that. And you see the same thing like trying

5:47

to change terms t oo. S o they want to give people the

5:49

opportunity to buy weekly, biweekly, monthly,

5:52

b imonthly, quarterly, like

5:54

okay, those are all different products. At

5:57

the end of the day, that's a different product you have to source and

5:59

actually deliver on. And you will

6:02

be overwhelmed doing a monthly box, I guarantee you,

6:04

because it goes faster than

6:06

you think.

6:07

Oh my gosh. Yeah. That cycle. Every time I swear

6:09

it's like Groundhog's day, you know?

6:12

And it just, as soon as you finish

6:14

packing and shipping, it's like onto the next thing.

6:17

Oh yeah . I used to pack boxes in my

6:19

living room, I'm sure it resonates with

6:22

people. And I remember packing 500 boxes

6:23

in the living room takes a long time.

6:27

Just printing the labels takes a long

6:29

time. Yeah. And

6:32

you're like, Oh my gosh. And so before

6:34

you even like get out to a fulfillment center, you have

6:36

to realize that you have to store this inventory,

6:38

you have to manage this. The simpler

6:41

it is, the

6:43

easier it is for you to actually deliver

6:45

on. And then the work targeted you can

6:47

be with who you're actually trying to sell.

6:50

So as a consumer, I

6:52

feel like we get decision fatigue too. If

6:54

you give them too many options, then

6:56

you might lose the sale. so what

6:59

from a data perspective, can you

7:01

tell us anything about like how many terms to

7:03

offer or how many variations to

7:05

offer?

7:06

Yeah, so , if you went back to Cratejoy 1.0

7:09

we had just about every option in

7:11

the subscription world like tr, you

7:14

could literally run the most complicated business

7:17

you ever wanted to. And I

7:20

know what the data showed is that the

7:23

most successful boxes, which means the most

7:25

likelihood for survival and growth are

7:27

monthly termed boxes,

7:31

Okay, hear that people? Monthly boxes.

7:33

Monthly that ship either on a

7:36

month to month or three, six or 12 month prepay schedule.

7:38

We used to do nine months that just never

7:41

worked. People didn't use it if people didn't buy it. But

7:44

it's, that is what people

7:46

are I guess conditioned to do and

7:49

you can do quarterly and there are

7:51

plenty of successful quarterly boxes out there.

7:54

The, we get

7:56

this question a lot, so everyone wants to do like a seasonal

7:58

quarterly box , which just hot, like people want to do that

8:00

and they want to ship in and so maybe I should back

8:03

up quarterly. It means two things. You

8:05

either ship every three months from the date of

8:07

purchase. So that's a quarterly ad hoc.

8:09

So that's just like, Oh every three months you get a box

8:12

or you ship four dates every

8:14

year. So you should have like whatever December

8:17

1st, whatever the, everyone's

8:20

on that December for shipment. And so

8:22

that would be like the winter box, the spring box, so

8:25

summer box, the fall box. So those

8:28

are very popular and those can do really well. The

8:31

trade offs are, you are only touching

8:33

that customer four times a year with a product, which

8:35

means you're only doing four renewals

8:38

a year, so your cashflow has to be like

8:40

really big. If you're trying to

8:42

run that type of business and

8:44

you, you can

8:47

make it work, but we find that you lose

8:50

interaction with the customer between shipments.

8:53

Yeah. You're not top of mind.

8:53

Right. So you have a really

8:56

like robust marketing plan

8:59

and communication plan to actually start to communicate

9:01

and touch them and engage them with community

9:03

online. We see it as like most

9:05

of those boxes just didn't make it. They just weren't

9:07

able to sustain. They didn't have the cash flow . The

9:11

the month to month was actually pretty popular because you get

9:13

cashflow every single month and like

9:15

across the board we usually see 70-ish

9:18

percent of people are month to month subscribers.

9:20

The rest are prepays and that's

9:22

pretty much across the board that I've seen as

9:24

I look at the data. And

9:27

that gives you cashflow every

9:29

single month and not only pay yourself for the time, but you're

9:31

touching people every month. So you're renewing them, you're talking

9:33

about that you're sending them updates about this and what you're getting

9:36

is what you had. You're trying to solicit feedback

9:38

and you're able to make more cycles

9:42

throughout the year, which that's

9:45

good. They may not be as big as like

9:47

a three month charge cause in a three month box you can put

9:49

a ton of value and charge a lot of money.

9:51

Right.

9:51

But I think you're also limiting

9:53

your buyer pool. There's

9:56

definitely a trade off with the each side. I can't say one's better

9:58

than the other except I say I say that or people are

10:00

successful with a month to month.

10:01

Right, from the

10:03

data.

10:03

From the data, if you were a big

10:05

time influencer or you were like

10:08

Kim Kardashians , yeah, you can absolutely launch a

10:11

quarterly with seasonal boxes .

10:13

You could put your name on anything,

10:14

Right. Like you

10:16

have to like know yourself, your potential audience and

10:18

what your cashflow needs are. And like really

10:20

kind of understand like what would work for you.

10:22

Yeah. So

10:25

when it comes to overcomplicating things,

10:28

let's talk about operations.

10:30

So if you have,

10:33

say you have 10 products, so we

10:35

at Sparkle Hustle Grow, we put four to six items

10:38

and that feels like enough to,

10:40

you know, I'm always looking to reach

10:42

out to a vendor here, chasing this vendor here. This order

10:46

come in on time. I can't imagine

10:48

having twice as many products or

10:50

three times as many products. The more products that

10:53

you have to fulfill, the more legwork there

10:55

is with vendors, communication, stuff

10:57

like that. But also in, you

11:00

know, like you said , having the space

11:02

to do that actually fulfilling, putting

11:05

together the boxes, it becomes

11:07

really, really overwhelming and very time consuming

11:09

as you continue to add

11:11

more and more things to your box.

11:15

Yes. And okay,

11:18

operationally, let's say you have 10 products

11:20

and you have 25 subscribers,

11:23

you're a newbie, you're crushing it. You

11:26

have, what does that 10

11:28

times 25, 250

11:30

different products and you're in your house

11:33

in month one. Okay.

11:36

So let's say you forecasted

11:38

like 10% over so you have a couple more , more for a couple

11:40

extra boxes, 25

11:43

every month throughout the year. At the

11:45

end of that year you're going to have 120

11:48

different products, times two boxes.

11:51

You're going to have what is whatever, 240

11:53

different skews is floating around

11:55

your house that you're at to figure out what to go

11:58

do with it. So let's say you want to sell them

12:00

online. Now you have 121

12:02

time products online to try to go sell or

12:04

you can try to like obviously give those boxes to influencers

12:07

or reviewers. But I mean what you see

12:09

is like this just compounds over time

12:12

and when you go to pick and pack, you go to

12:14

kit, anything like that, like you're grabbing

12:16

more skews, you're keeping things in more places, you have

12:18

to store it. It's just way

12:20

more complicated. And then you have 120

12:22

different vendors to communicate with. If

12:25

you ever want to go back to them like, okay, so where's my spreadsheet?

12:30

Which one was that? Yeah!

12:30

It just like makes it super complicated. So you

12:32

want to, you definitely want to simplify. You

12:34

don't want to have the other thing within like

12:36

let's say you have 10 products in two different boxes that have

12:38

like a variation of different products in them that

12:41

just really complicated. I

12:44

ran, trust me, my first box I started, I want

12:46

to have like 27 different products. I was

12:48

like, Oh yeah, I'm going , someone doesn't

12:52

want this one, they'll have that one and they'll have that one

12:54

and optionality like wins. And

12:57

then I was like, wait a second. No,

13:00

I guess it would take you a week to order it .

13:02

At the beginning I thought about putting in sized items

13:04

like tee shirts or you

13:07

know , something like that. But as

13:09

I got deeper into it, I'm like the operational

13:11

nightmare of me trying to

13:13

manage all of those variations and me trying

13:15

to buy the right number of

13:18

smalls mediums larges, it just seems

13:20

really overwhelming to me. it might come a

13:22

lot of , a little bit more naturally to someone who maybe

13:24

runs a boutique and then they want

13:26

to add another stream of revenue as a

13:29

subscription box. I think that it

13:31

would be really, really a good idea. But for

13:33

me, I, that's why we don't use sized

13:35

items at all. We don't offer it in our

13:37

boxes. not only don't we, we don't have

13:40

the space for it in our small six by nine by three

13:42

boxes, but I just operationally I just

13:44

couldn't put my head around trying to figure

13:47

out making sure that one, someone got

13:49

the right size and two , I didn't

13:51

want to be in the business of returns and exchanges.

13:55

Yes, that's, yes.

13:58

I usually don't see people get size and right until they hit

14:00

scale because then they , they kind of know

14:03

within like a , like a percentage of what

14:05

they need to order every month in

14:07

ordering a months in advance and have like a really good supplier

14:09

locally that can deliver to their warehouse.

14:12

It's, it is so complicated.

14:14

I wouldn't touch sizes like I, I'd

14:17

be too scared of that. It's so complicated. Unless

14:19

you're like, like you said, like a boutique

14:21

or someone that has the type of

14:24

the inventory they can pull from and they're more comfortable with it . It's

14:26

very difficult.

14:27

Yeah, I would agree. Yeah.

14:29

I think , I, that's not to say that it

14:31

can't happen. So if you're , if you're thinking about that

14:33

in your listening, we're not saying don't do

14:36

that. We're just trying to get you to think about , think about

14:38

like as you scale, is this

14:40

going to be feasible? So one thing

14:43

that I did at the beginning is I

14:45

got some of my products and

14:47

I would repackage them, maybe put them in

14:49

a different box or label them or something like that.

14:52

And while that was feasible in the

14:54

early stages when I only had say 50 or 150

14:56

boxes, I just knew it wasn't scalable.

14:58

So that was one of those things that I

15:00

knew I would have to kind of pivot as I

15:03

grew. So I just wanted to share

15:05

that little story. And then I guess, Mario, the last question is

15:07

from the data. I always love

15:10

getting information from the data. Do you

15:13

have any clue as to

15:16

like the typical number of products that is

15:19

successful? Like how many products are

15:21

the most successful boxes putting in their

15:23

box?

15:24

Uh , so this is a at a volume level,

15:27

so not like the most successful box

15:29

or any of that. It's usually between

15:32

four and seven is what we see that it's like the volume.

15:35

Like most people have four to seven products. It's

15:37

always category dependent. But across the board, the ones that are doing

15:39

well, they're either doing an experience

15:42

that like, Hey, here's a kit that you actually work

15:44

on, like a craft. Or if they're

15:46

doing more of that lifestyle, like curated

15:49

box there , I mean it's

15:51

not just like a lifestyle that's specific

15:54

for that audience, but they're doing like anywhere between four

15:56

and seven products. Get the value.

15:58

Yeah. Got it. Okay, cool.

16:01

So do you have any other closing

16:04

advice about over complicating your product

16:06

other than don't over complicate

16:08

your product?

16:09

That is the only advice I have. Do not over-complicate

16:13

when in one area, deliver

16:15

one type of very simple product,

16:18

very passionate audience that

16:20

wants to buy it and loves it, and

16:22

then start to get more complicated. But you

16:25

have to own something first, and that

16:27

way you have like the right to sell other things I

16:30

say right near quotes.

16:31

Right, right, right. No, that's good advice.

16:34

Okay, well thank you so so much again for

16:36

chatting with us on this topic and

16:39

guys, make sure you tune in to the next

16:41

episode when we're going to talk about getting

16:43

feedback on your box and

16:45

what to do with it.

16:54

[inaudible] .