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Thursday, Jun 21, 2018
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Mullins: New companies lining up to resupply your every need

Take a walk around the house — when you have a minute — and take note of anything you might use up and eventually need more of — from shampoo to dog food to ramen noodles. That would be a long list, I’ll presume.

But presto, odds are improving with each passing day that there’s a hip new startup company that wants to sign you up for a monthly delivery to resupply what you need, shipped inside an eco-friendly box right to your door. Hordes of startups, actually, and more are on the way.

From the ultra-hip Birchbox.com that sends a sample box of top-shelf makeups to Conscious Box.com that sends vegan and gluten-free snacks, to MysteryTackleBox.com that sends fishing gear by mail, they all ship for $10 to $20 a month.

This kind of monthly service has been around in one form or another for a long time; Wine of the Month Club, 1-800-CONTACTS, etc. But thanks to social media, ferocious venture capital and our free-shipping culture, a bazillion new mail-order niche sites are taking off. Here’s why — and a sample of a few of the most amazing ones:

◆ Cash, for starters. Investors have a lot lately, and they perhaps love nothing more than expanding, as well as predictable cash flow and low expenses. Unlike a gadget, medicine or software product that can take years to foster into a revenue stream, a subscription startup can come to life with little more than a few laptops, a warehouse and some social media-savvy marketers. Customers plug in their credit card numbers, which creates forecastable cash flow. If a service makes a splash, it can become a potential IPO or buyout target, and backers harvest the rewards. Whether a niche like horse supplies by mail survives past year five is beside the point. The project was “disruptive,” a word that’s somehow transformed in meaning from rudeness personified to virtuous capitalism.

◆ Surprise. In a more entertaining dimension, who doesn’t love a goodie care package? These subscription startups thrive on a concept that marketers often call “planned surprise.” We all know our birthdays are coming up, but we love the idea of something unusual in the works. Companies like Birchbox tap into that anticipation by fostering the idea: “who knows what amazing new thing will show up at my door next?”

◆ Fat margins. Because many subscription services merely deliver sample sizes, they can go to product makers with this argument: “You have great products, but no one knows about them. Give us 20,000 units for free, and we’ll put them in the hands of 20,000 potential customers who can just hit ‘click’ to buy more.” Hence, you may pay $20 for a box of five sample hand lotions, but the company likely paid just pennies each for them, if anything at all beyond packaging and shipping.

◆ Discretion. More than a few of these startups focus on delivering things you’d rather not be seen carrying out of CVS. Yes, there are “adult” supplies providers like GetBoink Box.com, but there are also personal hygiene companies like MyCottonBunny.com shipping feminine care items. Slogan: “Put a period on your period.” Pay $13.75 a month for products from Kotex, Tampax, Always, Playtex, or o.b., plus goodies like vintage writing journals, specialty teas and fancy pens.

◆ Niches. Investors love targeting tiny pockets of consumers who might pay a premium for affirming attention. Hence, there’s fishing niche service MysteryTackleBox, “The most exciting way to discover new baits that work,” for $15 monthly. And there’s niches like those who use eco-friendly diapers (CottonBooty.com), crunchy parenting (EcocentricMom.com), the health-conscious cubicle dweller, (Blissmo.com), Asian food sampler (DumplingBox.com), lover of exotic socks (SockPanda.com), Irish-themed goodies (MyIrelandBox.com), Marijuana-themed items (TheCannaBox.com) and the survivalist/doomsday-prepper (BugOutBox.co).

The trend has blossomed to the point that there’s a whole business market online that just catalogs all the services, with its own subscription offer that sends a “surprise” box from who knows where. (SubscriptionBoxes.com)

They have transformed the perceived drudgery of buying boring old shampoo into the thrill of receiving a care package from grandma — if only grandma were an insanely hip and well-connected fashionista living in Brooklyn who found an eco-friendly jasmine-essence hair treatment that’s single-batch made in a warehouse loft by artisanal soap makers. At least that’s what the label says.

There is the wonky economic question of whether companies like Dollar ShaveClub or BirchBox divert sales away from traditional, physical grocery stores, or whether they merely entice people to spend more than they would otherwise.

Meanwhile, many big companies have long had subscription offers. HSN has one that sends everything from lotions to Swiffer refills. This is a question I’ll leave to this year’s crop of economics Ph.D. students, but the savvier subscription box companies use this sly trick: If you find a sample item really works for you, then you can just click to have that item arrive in full-size form each month. Boom, recurring revenue!

If you suspect such subscription services will be a hit this holiday season, me too. For about $100 a year, it’s the gift that keeps giving every month.

Other retail, restaurant and trend news around town:

◆ Here’s a project that we very much hope will jump the chasm between buzzy concept to reality in our home. “Tile.” The startup company invented a tiny white tag that’s embedded with a locator beacon. Tie one to your bag, or stick one on your bike, TV remote or anything else, so when you lose it, there’s an easy way to find it again. Just take an iPhone, dial in to your Tile app, and your phone shows where to find the Tile — and hence your bike or TV remote. You can even trigger the Tile to ping away until you hear it. Bonus: If it goes outside the range of about 150 feet, post it as “Lost” online, and when another Tile user’s phone senses its location, you’re alerted. The business had an initial goal of $20,000 in crowdfunding. Instead, they topped $2.68 million from 50,000 backers. Each Tile costs $18.95 during the pre-order phase and will ship in January 2014.

◆ Kindle and e-book readers, you may be in for a payout, if only a small one. A string of book publishers have reached a settlement over an alleged scheme to fix the prices of e-books. You shouldn’t need to do anything to receive a payout. Publishers like Amazon should automatically credit your account for an amount that will depend on what books you bought and how many. Estimates range from $0.73 to $3.06 per book published by Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010, and May 21, 2012.

◆ Fans of Flipboard have made the iPad-based social-media magazine a huge hit. If you haven’t seen Flipboard, the software beautifully taps into articles of all sorts (and your Facebook/Twitter feeds) and lays them out like a magazine that you “flip” through. There are hundreds of feeds from titles like The Atlantic, Esquire and a bazillion niche publications. Now there’s a new twist: you can create your own “magazine” called anything you want. Just update your app, create a blank magazine and “flip” anything on Flipboard into your topic. I built one as a test called “Mechanicals” under my pseudonym, DailyDeadline, with mainly photos of old-school gadgetry, mechanical watches, tools and architecture. And readers of your magazine can subscribe to it and flip the articles onward into social media. Feel free to subscribe.

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Twitter: @DailyDeadline

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