Brief - The Hustle

Subscription box businesses aren’t pulling any punches in the fight for $2.6B

Written by Conor Grant | Jun 30, 2020 10:12:11 AM

The value of the subscription box industry increased from $57m to $2.6B in just 5 years, attracting more than 3.5k would-be subscription box champions to fight for their chunk of the prize-money.

While some subscription box businesses make it to the multibillion-dollar big time, many more are just trying not to get knocked out in the first round. 

Eyes on the prize

The heavyweights rake in big bucks: Razor-box Dollar Shave Club sold for about $1B and fashion-box Stitch Fix is worth more than $2B.

Other companies are also punching above their weight to sell niche products ranging from dog biscuits to sex toys — and some are succeeding. FabFitFun, the Apollo Creed of trendy hand creams and eye shadow products, has grown 300% annually. 

But 47% of today’s subscription boxes launched within the past year, meaning there are plenty of contenders swinging for the purse… 

And there can only be so many champions

You know the market is saturated when people launch businesses to launch other people’s businesses, but does just that with posts like “8 Simple Steps” to succeed as a subscription box biz.

In reality, it’s hard for most subscription box businesses to stay on their feet; more than 1 in 10 went bankrupt in the early rounds, and others are taking a slow beating, selling for less money than they raised to pay off their debt.

So all we’re saying is this: If you’re planning to sink your life savings into your brother-in-law Ted’s hedge-clipper subscription box, just be ready for a financial black eye.