How to start and grow a 1,000+ person subscription box company on Shopify
Recently we were lucky enough to interview Joseph from Little Life Box. His subscription lifestyle box company is powered by Recharge, and has been taking the Canadian health market by storm. With over 1500 customers currently subscribed to this fantastic box, his business is growing quickly. We sat down with him to learn more about the conceptualization behind Little Life Box, the scaling process, and their marketing strategies. We hope you take away as much as we did from this informative conversation.
Oisin– Hey guys this is Oisin from Recharge, and I am really excited to launch our new blog. Our first interview is with Joseph from Little Life Box. This is a really well established subscription box company that has hundreds of subscription customers. Today we are going to talk about how you can start a subscription company like Joseph and how you can scale it to success. So Joseph- can you give us a little backdrop of your situation and background?
Joseph– Sure! Well, my background has absolutely nothing to do with subscription boxes. I graduated in architecture, worked in that field for a little while, and even currently do some work in architecture as well as digital design. The subscription boxes were something I had heard of on the side, which has now become a relatively full time job. Success was not necessarily expected, but we have ended up doing very well, so it has turned out to be a full time gig for the time being.
Oisin– Wow, that’s amazing, that is the aspiring goal of every entrepreneur!
Joseph– Absolutely, Yeah there are never any guarantees when you are an entrepreneur, as you can try a lot of different things might not work out, but this one has stuck
Oisin– How did you come up with the idea of Little Life Box? Also, could you please give the readers an idea of the product that you provide?
Joseph– Yes. A little background- we send out samples every month of different healthy alternative products. There are a lot of boxes out there that are just snacks, or cosmetics, or just one specific type of product. Whereas we do a mix, so its really- I have two other partners that are in with me. One of them handles the product procurement, they basically do the research, and find whether its products that they try in person, or discover through different blogs or Pinterest. When they want to try the products, they contact the companies, to get them on board. Which is the toughest part, which I am sure we will talk about later! So, it could be anything, this past month we had everything from natural dishwasher detergent to cosmetics to chips to… anything we find that we think is a healthy alternative.
We came up with the idea by basically… well we are only located in Canada for the time being, and one of my partners who started out is one of the original founders, she heard something similar in the United States called “Conscious Box,” and she wanted to subscribe herself, but they didn’t ship to Canada. So we did our market research, and realized that there is actually a big demand in Canada, and looked into starting it up ourselves. I had a background in web design and worked in online processes before, so I was familiar with how to get it off the ground and start it up. And we just had to give it a try, and it was a hard first couple of months getting off the ground, and now we are we are now!
Oisin– That’s Awesome, I guess the biggest struggle that people have are the first ten sales that aren’t your friends or family. How did you get that initial traction –that first group of people who loved your product?
Joseph– What we did initially, and I am completely surprised this worked ourselves– as we didn’t know what to expect… that was the big challenge¬– we had no money, we didn’t want to invest too much, and we really believed in it. Which left us with the challenge of spreading the word. We started by not actually accepting any payments. We created our social media accounts, started following different health bloggers, getting the word out about the box, advertising- saying we were going to be starting off in three months. By doing so we were gauging the interest of potential customers. So we had it set up to say something like “hey if you’re interested, go to our website and sign up to join.” This was essentially a mailing list at the time, and we were saying “hey sign up now, and we will contact you whenever they are first up for sale, and we will let you know when you can buy your first box.” In a matter of two or three months we had about 50 people who said they wanted to sign up, and out of them, about 20 were friends. The others came from us posting on other peoples social media accounts, posting on bloggers accounts, on health food bloggers and different writers, and commenting on pictures and saying “hey you know you should check out Little Life Box,” and we got some traction that way. So we started off with about fifty for our first month.
Oisin– Oh Wow, well that’s a great way to do it you know, kind of testing the waters before actually putting any money in. A lean start up way, that’s great to hear. The other issue that people have, and you know we see this all the time, is that people come in and they have their initial base and they have a great idea, but they really don’t know how to grow it. What kind of tactics have worked out for you guys that have grown your base from the initial few people that you got from the blogs to what it is today?
Joseph– Well, for us it has really been a steady growth, and we haven’t tried to grow too fast, so we wanted to take the bumps along the way, and learn from the mistakes, and see how everything goes. You know we started off with 50, then we grew to just under a 100, then to over a 100 then to 200, and right now we are where we are today, just over 1500, and we tried so many different things, it is hard to say exactly what worked. We tried everything from attending trade shows to buying booths at marathons and advertising that way. What I think mattered a lot was customers or potential customers talking about us. So many people these days have blogs or are actively commenting on social media, and on other peoples blogs or sites, and when they find something they like, then they are going to want to talk about it and share it. That is actually the best way of spreading the word right now. Our members talking about it, and telling their friends about it. For every one person who is happy about the product they then go and tell six or seven friends, and then we grow that way. We haven’t actually put any money into advertising, which we probably could, but we are trying to manage the growth and not explode too quickly, and at the same time, we are not millionaires, so we are trying to manage the amount of money put into it. That’s worked for us, it has been a steady growth, and we can see that incremental growth each month. You know, we are convinced that the more people talk about it, then a health food blogger will talk about it, and then talk about it on their blog. They may have a couple of thousand followers, and that’s advertising right there.
Oisin-Great, you have a great product, and we see that constantly through reviews and everything, it makes total sense. Another question I have too is about your affiliate engagement. You have been really big on affiliates. You really seem to be able to engage people. What kind of tips do you have to provide to companies just starting out. How they can create affiliate programs and thereby making champions for their offerings?
Joseph– We discovered that people want to be affiliates, as they talk about these products anyways. Especially with subscription boxes, people are very passionate about it. It is a big thing- if you look on YouTube you can see people doing unboxing of subscription boxes, they love to talk about them, and love to share what they got this month. So if someone has a YouTube channel, and if they are doing unboxings anyways, it makes sense for them to sign up as an affiliate. That way, if someone signs up for the subscription box using the affiliates promo code, then they make a little bit of money off of it. The demand is there, and it is not a hard sell, and it is definitely a fantastic way to grow your business, because it encourages people to go on their blogs and YouTube’s and do a good job of going into detail about the product, and they get really excited about offering a promo code to their listeners. “Go get 20% off using our code.” It is definitely a great way to help the growth of the company, and Shopify actually offers a billing app that is great for referrals, so the tools are all there. We have a section on the site where people can sign up to be affiliates, and there they are given everything they need like their promo codes, then they they go from there.
Oisin– Makes total sense. So how do you identify different people who could become potential affiliates, and how do you do the initial outreach to build the relationship?
Joseph– Part of what focus on in our advertising strategy, is searching for bloggers, and looking for people who will talk about the box and review it. We want to get it into the hands of people who will enjoy it, and if do they like it or want to talk about it, plus they have a significant following. For them, we always offer them to be an affiliate, because it makes the most sense and we will get the most referrals. But really, we leave it open to anybody. Someone may sign up and think “well I may introduce this to ten of my friends and make a couple of bucks off this,” and they become an affiliate. It could be a blogger- it could be anybody, really. Ideally, you really want to partner with the people who have the most influence.
Oisin– For sure, how do you usually structure it with the affiliates? Do you do it one time? Lifetime? How many times? What is the lifetime value of the customer that you are going to acquire?
Joseph– The particular app that we use allows them to log into the shops backend where they can then track the amount of people who use their promo code, and it gives them the link that they can use. So, if someone uses the link and are redirected to our site, any purchase that the person makes counts as a referral, so it is actually really easy for them to use it and set up. It is pretty much work free on their end. They can post their review like they usually would, and then at the end say “hey if you are interested, here’s the promo code!” Then it tracks it automatically, and we send off the commissions
Oisin– So that’s a big Shopify app, and it helps grow your business?
Joseph– It has a very low cost, it is not a free app, but it is well worth the price.
Oisin– One issue that we see with a lot of box companies is their management of inventory and procurement. So every month you get people to sign up, and then you have to provide a box… how do you handle that? How do you handle the scaling and all that?
Joseph– Well that’s the hardest part, if it was that easy everyone would be doing this, right? Without giving away too much of how we do things and what’s made us successful, it is really about building relationships as far as identifying the products that you want. It is calling them up, making your pitch, building a relationship with that person, finding out who you need to talk to, explaining the benefits of taking part and gaining their trust. Once they do take part, they really do realize the advantage of it. A lot of people are skeptical at first, because not everybody knows how subscription boxes function, and how they can be really beneficial for your business in terms of marketing. Sometimes it is a tough sell, and sometimes it is hard to plan what’s in the box. What kind of products do we want in the box? Who can we call? Okay, we already contacted these people. But… that’s the hardest part, that’s what makes the business successful when you can go out and do that. In terms of managing inventory- it is not easy. Our packing weekends are hectic, when we are getting the boxes ready and the teams all here. The first couple of months were a transition period as we had to learn different ways of doing it, what works for us, or for you. Then you get your system down. It is a lot. We send out boxes once a month, and we also offer special gift boxes we can send out on demand, and we send out a couple of those on a daily basis, but it is mostly once a month. We ship on the first of the month, so it is the days leading up to that which are definitely the busiest part of the month.
Oisin– When you guys were just starting off- I know a lot of companies that come on with us, they limit the amount they are going to fulfill each month and then open up from there, do you do the same?
Joseph– Absolutely, absolutely, because nothing is done last minute! The products we line up for every month’s box are organized a few months ahead of time. So we know how much product we are working with, and how many boxes we can sell
Oisin– What kind of advice would you give for people entering this market? What are the top tips to become successful?
Joseph– That’s a good question, I think the top thing- especially when dealing with subscription boxes, is that people seem to expect things to be tailored to them personally, especially dependent on the product. From what I know about the subscription boxes out there, you find something that you are generally interested in, there’s Bark Box for people with dogs and you’re going to get dog treats and poo bags or whatever in the mail every month. They are things that are very specific, but at the same time you don’t exactly know what you are going to be getting in the mail every month, so there are always going to be people that are disappointed. So, the biggest piece of advice I would give people is to not get discouraged, because you are going to get negative feedback, you’re going to get people who are going to be saying things like ” oh my god this box is garbage, I couldn’t use anything inside of it, this was a waste of money, why did I sign up for this?” Then there will be people who absolutely love it, who are going to send you a huge letter thanking you saying things like ” oh I gave this to my niece and I’ve been using it for weeks and I bought more of this and that and so it is so open and subjective so naturally you’re going to get a lot of it, and it is easy to get discouraged at first, but it is the nature of subscription boxes. Unless you are the type of company offering something very specific that they know of ahead of time, which most aren’t, especially when it comes to anything food related, or cosmetic related, subscription boxes are usually a surprise what you get them every month, and in them are an assortment of a certain type of product. Of course you’re going to get negative feedback. So if I had to give one big piece of advice it would be to not get discouraged, and to not forget that you are doing a good job, and there are always going to be people who aren’t satisfied no matter what.
Oisin– I think that’s great feedback, we see that here across the board too, you have to realize where you are today, or how things are going today isn’t going to be where you are going to end up, you have to kind of take it day by day, feedback by feedback, sale by sale, to really build something ground up.
Joseph– That’s true when you are selling any type of product, but it is especially true with this when people are getting a box of assorted items that they don’t know of ahead of time. ( Exactly what they are going to be getting). Then it can be open to a lot more criticism. So yeah, don’t get discouraged
Oisin– Well Joseph, thanks so much for joining this interview today and we are excited to share this with our readers and get the word out about how people become successful in the subscription box industry!
Joseph– It has been a pleasure.
For the audio version of our conversation, click below!