Tips for Implementing a Subscription E-Commerce Program

Three competitive advantages make this model stand out:

• Huge margins: Birchbox has the mass audience to woo beauty companies to offer free samples. The margins allow Birchbox to keep costs low for consumers who happily stay subscribed.
• White-label products: NatureBox insulates itself from e-commerce giants like Amazon.com by exclusively using white-label products. The same goes for co-branded "exclusives" that pop up in themed BirchBoxes.
• Define a niche: Knowing your customers, and the competitive landscape, allows deeper penetration into a market by tailoring operations specifically around what that audience wants.

Automating Commodities
A more challenging area is the space of automating commodities. Here, brands reinvent basics (e.g., shaving products, underwear), providing consumers a price advantage or the convenience of never needing to run down to the corner store. Dollar Shave Club made a splash with its viral YouTube video. Manpacks, which promises men all the "basics" every month, is another recent entrant into the subscription commerce arena.