FabFitFun is an online subscription box service sending electronics, cosmetics, fitness, wellness, and fashion items every quarter. Founded in 2010, it started as a simple website, and as it gained popularity, thus following later on a similar subscription-based model to Birchbox. It now generates revenues through membership services and brand sponsorships.
Business Model Element
Analysis
Implications
Examples
Value Proposition
FabFitFun’s value proposition is to provide subscribers with a quarterly subscription box filled with a curated selection of premium beauty, fashion, wellness, and lifestyle products. The company emphasizes the element of surprise and discovery, allowing subscribers to explore new brands and products. FabFitFun offers a combination of full-sized products, customization options, and exclusive access to member-only sales and content, creating a sense of excitement and value. It aims to deliver a well-rounded lifestyle experience, blending fun and functionality.
Offers subscribers a quarterly subscription box with premium beauty, fashion, wellness, and lifestyle products. Emphasizes surprise, discovery, and new brand exploration. Provides a mix of full-sized products and customization options. Grants exclusive access to member-only sales and content. Delivers a well-rounded lifestyle experience. Attracts subscribers seeking excitement and value in their subscription.
– Subscribers receive a curated selection of products in each box, allowing them to explore new brands and products they might not have discovered otherwise. – The element of surprise and customization options add excitement to the subscription experience and cater to individual preferences. – Exclusive member-only sales and content enhance the perceived value of the subscription and encourage customer loyalty. – FabFitFun’s well-rounded approach to lifestyle products aligns with subscribers’ desire for both enjoyment and functionality. – The value proposition focuses on delivering an enjoyable and valuable subscription experience.
Customer Segments
FabFitFun primarily targets women aged 18 to 65 who are interested in beauty, fashion, wellness, and lifestyle products. The company caters to subscribers who seek a mix of novelty, convenience, and value in their subscription. FabFitFun’s subscribers come from various backgrounds and geographic locations, creating a diverse customer base. Additionally, the company has a seasonal, gifting, and occasional customer segment, attracting those who purchase individual boxes or gift subscriptions.
Targets women aged 18 to 65 interested in beauty, fashion, wellness, and lifestyle products. Attracts subscribers seeking novelty, convenience, and value in their subscription. Serves a diverse customer base from various backgrounds and locations. Includes seasonal, gifting, and occasional customers who purchase individual boxes or gift subscriptions. Offers a subscription solution for different customer needs.
– FabFitFun’s target audience consists of women interested in a wide range of lifestyle products, making the subscription appealing to a diverse group of customers. – Subscribers are drawn to the novelty, convenience, and value the subscription offers, aligning with their preferences and interests. – FabFitFun accommodates seasonal and occasional customers who may not commit to a quarterly subscription but are interested in individual boxes or gifting options. – The company provides a versatile subscription solution for different customer segments and preferences.
Distribution Strategy
FabFitFun operates as a subscription-based service with an online platform as the primary distribution channel. Subscribers sign up on the company’s website, choose their subscription plan, and complete the customization process. FabFitFun also utilizes email communication to engage with subscribers, provide customization options, and share product reveals. Subscription boxes are shipped directly to subscribers’ addresses. Additionally, FabFitFun has an e-commerce shop where non-subscribers can purchase individual products or seasonal boxes.
Relies on an online platform as the primary distribution channel. Subscribers sign up, customize, and manage their subscriptions through the website. Utilizes email communication for engagement, customization, and product reveals. Ships subscription boxes directly to subscribers. Offers an e-commerce shop for non-subscribers to purchase individual products or seasonal boxes. Focuses on a seamless online customer experience.
– Subscribers have easy access to FabFitFun’s platform, where they can manage their subscriptions, make selections, and stay updated on product reveals. – Email communication enhances subscriber engagement and allows for customization, ensuring subscribers receive products tailored to their preferences. – Direct shipment to subscribers’ addresses provides convenience and a hassle-free experience. – FabFitFun’s e-commerce shop expands its reach to non-subscribers, offering individual products and seasonal boxes for purchase. – The company prioritizes a seamless online customer experience to facilitate subscription management and shopping.
Revenue Streams
FabFitFun generates revenue primarily through subscription fees. Subscribers pay for quarterly or annual memberships, which grant them access to receive subscription boxes. The company also earns revenue through the sale of individual products and seasonal boxes in its e-commerce shop. FabFitFun may partner with brands and companies for product placement and collaborations, generating additional revenue. Advertising and sponsored content are potential future revenue streams.
Relies on subscription fees as the primary revenue source, including quarterly and annual memberships. Earns revenue through the sale of individual products and seasonal boxes in the e-commerce shop. Explores partnerships with brands and companies for product placement and collaborations. Considers advertising and sponsored content as potential future revenue sources. Diversifies income streams to support financial sustainability.
– Subscription fees from quarterly and annual memberships provide a consistent and reliable source of revenue. – The sale of individual products and seasonal boxes in the e-commerce shop offers additional revenue opportunities beyond subscriptions. – Partnerships with brands and companies can generate revenue through product placement and collaborative initiatives. – Exploring potential future revenue streams like advertising and sponsored content can contribute to FabFitFun’s financial sustainability and growth. – Diversified income streams support the company’s ability to invest in product curation and member experiences.
Marketing Strategy
FabFitFun’s marketing strategy includes digital advertising, social media marketing, influencer partnerships, and email marketing. The company promotes its subscription service through online ads, engaging content on social platforms, and collaborations with influencers. FabFitFun uses email marketing to communicate with subscribers, share product reveals, and offer customization options. The company also leverages word-of-mouth marketing, encouraging subscribers to refer friends and earn rewards. Seasonal and limited-time promotions drive interest and conversion.
Utilizes digital advertising, social media marketing, and influencer partnerships to promote its subscription service. Engages subscribers through online ads, engaging content, and influencer collaborations. Utilizes email marketing to communicate with subscribers, share product reveals, and offer customization options. Encourages word-of-mouth marketing through subscriber referrals and rewards. Runs seasonal and limited-time promotions to drive interest and conversion. Focuses on building brand awareness and community engagement.
– FabFitFun leverages digital advertising and social media marketing to reach a broad audience and attract potential subscribers. – Influencer partnerships help showcase the subscription’s value and introduce it to new audiences. – Email marketing keeps subscribers informed and engaged, contributing to customization and loyalty. – The referral program encourages word-of-mouth marketing, leveraging the existing subscriber base for growth. – Seasonal promotions and limited-time offers create a sense of urgency and excitement, driving interest and conversions. – The marketing strategy focuses on building brand awareness and fostering community engagement among subscribers.
Organization Structure
FabFitFun operates with a structure that includes teams responsible for product curation, marketing, customer support, logistics, and technology development. The company collaborates with brands for product selection and partnerships. Customer support teams assist subscribers with inquiries, customization, and issue resolution. FabFitFun actively engages with its subscriber community through online forums, surveys, and feedback collection to enhance the subscription experience.
Employs a structure with specialized teams for product curation, marketing, customer support, logistics, and technology development. Collaborates with brands for product selection and partnerships. Provides customer support for inquiries, customization, and issue resolution. Actively engages with the subscriber community through online forums, surveys, and feedback collection. Focuses on continuous improvement and subscriber satisfaction.
– FabFitFun’s product curation team is responsible for selecting and curating the products included in subscription boxes, ensuring variety and quality. – The marketing team works on promotions, influencer partnerships, and content creation to attract and engage subscribers. – Customer support teams assist subscribers with inquiries, customization options, and prompt issue resolution, enhancing the overall subscriber experience. – Active engagement with the subscriber community through online forums, surveys, and feedback collection provides valuable insights for ongoing improvements. – The company’s focus on continuous improvement and subscriber satisfaction is reflected in its organization structure and operational approach.
Competitive Advantage
FabFitFun’s competitive advantage stems from its unique combination of full-sized, premium products, customization options, and exclusive access to member-only sales and content. The company’s emphasis on discovery and excitement differentiates it from other subscription boxes. Active community engagement fosters a sense of belonging and loyalty among subscribers. Diversified revenue streams contribute to financial stability.
Derives a competitive advantage from its blend of full-sized, premium products, customization, and member-exclusive offerings. Emphasizes discovery and excitement in subscription boxes. Fosters a sense of community and loyalty through active engagement. Ensures financial stability through diversified revenue streams. Stands out in the subscription box market with its unique value proposition.
– FabFitFun’s subscription boxes offer a unique blend of full-sized, premium products and customization options, providing subscribers with a differentiated and valuable experience. – The element of discovery and excitement sets FabFitFun apart from other subscription boxes, creating a sense of anticipation and delight. – Active community engagement through online forums, surveys, and feedback collection fosters a sense of belonging and loyalty among subscribers. – Diversified revenue streams, including subscriptions, product sales, and partnerships, contribute to the company’s financial stability and ability to invest in product curation and member experiences. – FabFitFun’s unique value proposition and emphasis on member satisfaction distinguish it in the competitive subscription box market.
FabFitFun is an online subscription box service sending items in electronics, cosmetics, fitness, wellness, and fashion every quarter.
The company was founded by brothers Daniel and Michael Broukhim and Katie Echevarria Rosen Kitchens in 2010.
FabFitFun was initially launched as a website providing female-oriented content, featuring a newsletter and deals section among other things.
After three years of consistently publishing content, the site started to become very popular. Witnessing the popularity of Birchbox, the founders set about monetizing their traffic.
In early 2013, they sold 2,000 boxes to site users in just two days. These boxes were intended to mimic the so-called “swag bags” of full-size products given to editors at brand-sponsored events.
By 2016, the platform had surpassed 200,000 subscribers after receiving the first round of funding totaling $3.5 million.
When similar businesses experienced a downturn, FabFitFun continued to grow by partnering with influencers and brands and building a strong community through video content.
Curated Product Selection: FabFitFun curates each seasonal box with a selection of full-sized products from well-known and emerging brands across beauty, fashion, fitness, wellness, and home categories. By offering a diverse range of products tailored to different interests and preferences, FabFitFun provides its members with an exciting and personalized experience that caters to their lifestyle needs and preferences.
Discovery and Exploration: FabFitFun offers members the opportunity to discover and explore new products and trends across various lifestyle categories. With each seasonal box, members receive a curated selection of products that are carefully chosen to introduce them to the latest beauty innovations, fashion trends, wellness essentials, and home accessories, allowing them to stay informed and inspired.
Customization Options: FabFitFun provides members with customization options, allowing them to personalize their seasonal boxes based on their preferences and needs. Members can choose from a selection of products and variations for certain items, ensuring that each box is tailored to their individual tastes, preferences, and lifestyle requirements, enhancing the overall value and satisfaction of the subscription experience.
Community Engagement: FabFitFun fosters a sense of community and connection among its members through various engagement initiatives and interactive features. From social media campaigns and community forums to member-exclusive events and partnerships, FabFitFun creates opportunities for members to connect, share experiences, and engage with like-minded individuals who share their passion for lifestyle and beauty.
Exclusive Membership Benefits: FabFitFun offers exclusive membership benefits and perks to its subscribers, including access to member-only sales, discounts on additional products, and VIP experiences. By providing members with exclusive access to special offers and opportunities, FabFitFun enhances the value proposition of its subscription service and rewards loyalty among its customer base.
FabFitFun revenue generation
Most FabFitFun revenue comes from monthly subscriptions.
In this case, there are two options:
Annual – $45 per box, billed annually at $179.99. This gives users four boxes per year with up to eight different products. Users can also customize their entire box and get early access to add-ons, sales, and shipping.
Seasonal – $49.99 per box, billed quarterly. On this plan, customers can only choose a maximum of four customizations per box.
Both options contain products from premium and emerging brands. These subscription plans also give access to the FabFitFun Shop, online community, and streaming video channel.
FabFitFun Style
FabFitFun Style is an exclusive personalized styling service for members who must take a quiz to answer questions about their preferred styles and body shape.
With this information, a stylist selects five to six items of tailored clothing and ships them to the customer. The company charges a non-refundable $20 Styling Fee for this service, though the cost can be recouped if the user decides to keep one or more items from the box.
A FabFitFun Styling Pass can also be used to cover the cost of the Styling Fee. This is a prepaid voucher that serves as a form of credit for the purchase of styling services and fashion items.
Brand sponsorships
When FabFitFun assembles its boxes, the company works with brands who want to advertise their products through the subscription service.
Brands may opt to let the company feature its products for free. Alternatively, they may pay an advertising fee.
Marketing Strategy
Influencer Collaborations: FabFitFun partners with influencers, celebrities, and content creators to promote its subscription service and seasonal boxes to their respective audiences. By leveraging influencer marketing, FabFitFun increases brand visibility, reaches new potential customers, and drives subscription sign-ups through sponsored content, affiliate partnerships, and brand collaborations.
Social Media Engagement: FabFitFun maintains active presences on social media platforms, including Instagram, Facebook, Twitter, and YouTube, where it shares engaging content, product updates, and lifestyle inspiration with its followers. By fostering a vibrant social media community, FabFitFun interacts with its audience, cultivates brand loyalty, and drives user engagement through social media marketing initiatives.
Email Marketing Campaigns: FabFitFun utilizes email marketing campaigns to communicate with subscribers, promote seasonal box launches, and showcase featured products and offers. By sending targeted emails with personalized recommendations, exclusive discounts, and promotional incentives, FabFitFun encourages subscribers to stay active, renew their subscriptions, and make additional purchases through email communication channels.
Content Creation and Blogging: FabFitFun produces original content and blog posts on its website, covering topics related to beauty, fashion, wellness, fitness, and lifestyle. Through informative articles, how-to guides, product reviews, and trend reports, FabFitFun provides valuable content that educates and inspires its audience, driving website traffic, engagement, and brand awareness through content marketing efforts.
Partnership Collaborations: FabFitFun collaborates with brands, retailers, and media partners to cross-promote its subscription service and featured products through joint marketing initiatives and strategic partnerships. By aligning with complementary brands and leveraging co-marketing opportunities, FabFitFun expands its reach, taps into new audience segments, and drives subscription growth through partnership collaborations.
Distribution Channels
Online Subscription Platform: FabFitFun operates an online subscription platform where customers can sign up for annual or seasonal memberships, customize their preferences, and manage their subscription accounts. The FabFitFun website serves as the primary distribution channel for acquiring new subscribers, processing payments, and delivering seasonal boxes to members.
Mobile Applications: FabFitFun offers mobile applications for iOS and Android devices, allowing customers to access the subscription service, shop for products, and engage with the FabFitFun community on their smartphones and tablets. The mobile apps serve as additional distribution channels for reaching and acquiring customers, providing a convenient and accessible way to interact with the FabFitFun brand on mobile devices.
E-commerce Store: FabFitFun operates an e-commerce store on its website, where customers can browse and purchase individual products featured in its seasonal boxes, as well as exclusive collaborations, limited-edition items, and past box favorites. The e-commerce store serves as a distribution channel for generating additional revenue from product sales and upselling opportunities beyond the subscription service.
Retail Partnerships: FabFitFun partners with retailers and online marketplaces to sell its seasonal boxes and featured products through third-party distribution channels. By collaborating with retail partners, FabFitFun expands its distribution reach, taps into new customer segments, and increases brand visibility and accessibility through offline and online retail channels.
Affiliate Marketing Networks: FabFitFun participates in affiliate marketing networks and programs to leverage affiliate partnerships and referral channels for driving customer acquisition and subscription sign-ups. By working with affiliate publishers, bloggers, and influencers, FabFitFun incentivizes referrals and promotes its subscription service through affiliate marketing channels, generating incremental sales and revenue through affiliate partnerships.
Key takeaways
FabFitFun is an American online subscription box service for beauty, cosmetic, health, fitness, and electronics products. The service was originally launched as a content website offering female-oriented advice and deals.
FabFitFun generates revenue through a subscription service, offering two plans according to how frequently the customer would like to pay. The company also charges for a personalized styling service based on information from user questionnaires.
FabFitFun works with brands whilst assembling the products for its boxes. Brands may offer products for free in exchange for extra exposure. They may also pay the company an advertising fee.
FabFitFun: Key Takeaways
Overview: FabFitFun is an online subscription box service that delivers a curated selection of electronics, cosmetics, fitness, wellness, and fashion items to its subscribers every quarter. The company was founded in 2010 and has grown to become a prominent player in the subscription box industry.
History: FabFitFun was initially launched as a content website providing female-oriented advice and deals. The founders later shifted their focus to a subscription box model, influenced by the success of Birchbox. Over the years, FabFitFun has grown its subscriber base and revenue by partnering with influencers, brands, and building a strong community.
Revenue Generation: FabFitFun primarily generates revenue through its subscription service, which offers two plans:
Annual Subscription: Priced at $45 per box, billed annually at $179.99. Subscribers receive four boxes per year with customization options and other benefits.
Seasonal Subscription: Priced at $49.99 per box, billed quarterly. Subscribers receive four boxes per year with limited customization options.
FabFitFun Style: The company offers FabFitFun Style, a personalized styling service for members. Users take a quiz to provide information about their style preferences and body shape. A stylist then selects clothing items based on this information and ships them to the customer. A non-refundable styling fee is charged, but it can be offset if the customer decides to keep items from the box.
Brand Sponsorships: FabFitFun collaborates with brands to feature their products in their subscription boxes. Brands can either provide their products for free or pay an advertising fee to be included in the boxes. This provides exposure to a large and engaged customer base.
Community and Engagement: FabFitFun has built a strong community through its online platform, offering subscribers access to an online shop, an active community, and a streaming video channel.
Key Success Factors: FabFitFun’s success can be attributed to its ability to pivot from a content website to a subscription box service, its strategic partnerships with brands and influencers, and its focus on engaging and building a loyal community of subscribers.
Subscription-based business models are built on a recurring customer base, where customers usually have access to the product or service rather than their own. The customer can have the upside of the service without owning the good underlying it, which is maintained by the company running the subscription-based business.
Ipsy is a monthly subscription service for cosmetic and beauty products founded in 2011 by Michelle Phan, Marcelo Camberos, and Jennifer Goldfarb. Phan used her large YouTube following to launch and grow the platform. Ipsy makes money by charging customers monthly for beauty subscription boxes. Various subscription plans are available depending on the beauty product size and customization level. Ipsy also operates an eCommerce store selling branded and in-house beauty products. The company also sells product placement spots to brands eager to receive highly targeted exposure.
Birchbox is an online American monthly subscription service for skincare, perfume, and other cosmetic items. Birchbox was among the first players to start leveraging a subscription-based model to reshape how value is delivered to customers. Instead of a one-off purchase, Birchbox curates a set of samples that each time are sent to its subscribers, enabling them to discover new cosmetic products while reducing the friction and cost of discovery for new products.
FabFitFun is an online subscription box service sending electronics, cosmetics, fitness, wellness, and fashion items every quarter. Founded in 2010, it started as a simple website, and as it gained popularity, thus following later on a similar subscription-based model to Birchbox. It now generates revenues through membership services and brand sponsorships.
Dollar Shave Club is an American online subscription service delivering razor blades and grooming products monthly. The Dollar Shave Club business model flipped upside down the “razor and blade” model popularized by Gillette. In short, where Gillette sold its razors at cost while making fat margins on its blades, Dollar Shave Club offered a subscription model to cut off the costs and friction of getting new blades and grooming products with a curated package.
BoxyCharm recognized a gap in the popular beauty subscription box market. Most companies were shipping boxes with sample-sized products that were not on trend or seasonally appropriate. As a proponent of the subscription box business model, BoxyCharm makes money via subscription revenue.
The razor blade business model, also known as the razor-razorblade model, involves selling a product at a lower price to sell a related product later for a profit. The razor and blade business model was popularized by King C. Gillette, founder of the safety razor company Gillette, which sold a durable razor at cost while selling disposable blades at a premium.
HelloFresh is a German provider of meal kits founded by Dominik Richter, Thomas Griesel, and Jessica Schultz (née Nilsson) in 2011. HelloFresh has a relatively simple revenue generation model. The company makes money by charging users a weekly subscription fee for meal deliveries.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
