There’s no getting around it, the beauty business is booming.
In the last 5 years alone, the industry has grown from $106.2 billion to $124.3 billion, with projected yearly gains of 2-3% through 2020. Though big-name retail store and online portals are still the primary means of distribution for beauty products, subscription services like Birchbox and Boxycharm are disrupting the marketplace, making way for new entrepreneurs to claim their piece of the beauty industry pie.
So how do you become one of those entrepreneurs?
1. Find a product that stands out
In their first steps towards creating a beauty or soap subscription box, sellers must land on a dynamite box idea. What does your subscription offer customers that the competition doesn’t?
- Are you introducing subscribers to new products?
- Providing a solution to beauty problems?
- Handcrafting special items that only you can offer?
Elina Hsueh, the 19-year-old founder and CEO of Beauteque Monthly, found her box idea by tackling her own beauty woes. After struggling with acne and failing to find effective products in the American market, Elina discovered Korean skincare, a turning point that offered both clear skin and a powerful business idea.
“The Korean beauty products I was introduced to worked,” Elina said. “It was a growing trend, and something no one had really tapped into in the subscription market.”
Since launching Beauteque in 2014, Elina has racked up over 3,000 happy subscribers who are loyal to Beauteque’s monthly curation of “East Meets West” skincare products.
(Beauteque is offering 10% off their box for new subscribers if you’re interested in trying it for yourself!)
2. Figure out product logistics early on
For subscriptions that offer products like apparel or paper goods, sending out monthly packages may not require more brainpower than calculating shipping costs. But for entrepreneurs looking to start a beauty or soap subscription, overlooking details like shipping temperature, packaging material, or travel pressure can quickly snowball into a logistical nightmare.
Dr. Squatch Soap Co., an all-natural soap subscription for men, learned early on that such details can make or break a personal care business when customers began reporting broken soap deliveries.
“You have to manage the entire process,” founder and CEO Jack Haldrup said. “We basically found out that our soap was too heavy and popping the [packaging], causing the soap to [toss] around in the box.”
Jack and his company had to make a change with their fulfillment center, and fast. Dr. Squatch pivoted from plastic bubble packaging to paper-wrapped soaps protected with cardboard boxes. Though this change was small, it made the difference between happy and unhappy customers.
The best thing sellers can do when starting their beauty or soap subscription is to have an open dialogue with vendors and shipping partners. Ensure that your team – from staff to fulfillment center – are all on the same page. Establish standards and expectations for the product on behalf of your customers.
(You can get an idea of what the Dr. Squatch packaging looks like for $7/mo. As a bonus, you’ll get the soap for free!)
Handmade Beauty Box, a monthly subscription that offers DIY beauty and spa projects, agreed that shipping is a critical element of the business. It was so important they decided to do all their fulfillment in-house.
“For every single box that goes out the door, we are portioning, weighing and measuring every single ingredient. We label it and then meticulously place it in the box before we ship it,” said Courtney Dann.
Handmade Beauty Box partners with UPS Ground for all their shipping (because some ingredients can’t be shipped by air) and has had really good results.
3. Choose the right tools to run your business
Once you’ve found your niche in the beauty or personal care market, it’s time to choose the tools to launch and run your subscription business. What surprises most new sellers when starting out is the sheer number of applications they have to learn, use, and tie together to keep their subscription business running smoothly. Below is a list of a few of the resources you might need to get your business off the ground:
- Website and e-commerce hosting
- Design software
- Customer support
- Project management tool
- Referral program
- Email automation
- Social media
Tip: Use our startup costs calculator to get a good idea of expenses associated with starting a subscription business.
When Anne-Marie Faiola and Courtney Dann first started Handmade Beauty Box, they had a frustrating time building custom tools to manage the needs of a growing subscription business.
“We tried to build our own website that would handle recurring billing, and that was so difficult,” Courtney said. “We had a lot of problems with the website, and then we found Cratejoy, who could host for us and do recurring payments, and had this amazing support and community and analytics that we had never seen before.”
After switching web platforms, Handmade Beauty Box was able to focus more of their time on customers and products rather than the website itself.
Soap and beauty boxes can be exciting subscription businesses, but it’s important to find the right niche, understand fulfillment, and choose the right tools.
Research your niche and check out some of the great soap and beauty boxes that have already launched with Cratejoy!