Birchbox

Birchbox shipped five beauty samples in a pink box for $10 monthly. The samples cost the company nothing. Brands paid Birchbox to include their products because reaching a customer at home converted better than any department store counter. The customer paid to receive advertising. The advertiser paid to send it. Birchbox collected from both sides. The model launched in 2010 and scaled to 400,000 subscribers by 2014. But the real margin came from the shop. Members who discovered a lipstick shade in their sample box could buy full-size through Birchbox at full retail, 20% purchased within 30 days. Average purchase was $42. The subscription was the discovery engine. The shop was the revenue engine. Brand partners paid insertion fees from $500 to $20,000 per product, depending on tier and subscriber segment.