September 18, 2012 by Cassy
I don’t use Birchbox, but I have to admit: they really got their business model down. I was following this company for awhile, since their launch in 2010 and their series A funding in 2011. They initially raised $1.4 million in seed funding, and then $10.5 million in Series A. I can only aspire to accomplish so much in a short amount of time.
What I also found interesting was that Birchbox was NOT the first of its kind. There were already subscription based sites for cosmetics and personal care products in the market. Birchbox definitely did a better job marketing and targeting its customers. For $10 a month, which is EXTREMELY reasonable, you get a box of products delivered to your house for you to try. For lazy people like me, this is great! If I find the products I like, I also get points for the subscription service that I can use to purchase those products. It’s an amazing revenue model.
I just got an email today stating that they have acquired Joliebox. Europe has one of the largest cosmetic/beauty product consumers. Again, Birchbox’s revenue model does not hinder its progress in distributing in the EU marketplace since Birchbox doesn’t manufacture ANYTHING. All the products they distribute are already approved for use, so they’re not liable for any potential lawsuits concerning product or ingredient safety.
There are many competitors in the horizon for this young company, but they’re growing so fast, I think it will be hard for competitors to take them down. Additionally, they have added features such as a Men section and a Haute box (fashion look book). They will keep expanding and adding more content to their brand, and expanding their portfolio. I can’t wait to see what else is in store for this company.