012: How Do I Compete with Big Box Companies? | Launch Your Subscription Box with Sarah Williams

Hey Sarah, how do I compete with these big box companies like FabFitFun, Birchbox, HelloFresh, Ipsy? How do I compete with them? I'm just a small business. Let's talk about it today because I get this question all the time.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams.

Hey everybody, it's Sarah. And today we're going to talk about a topic that is, is interesting because every time I get new members inside my membership Launch Your Box, there's this conversation that happens and it's around the same topic. And every time this conversation gets started, the comments are typically the same. And it's very eye-opening to me because it's, it's eye-opening to see that other people feel the same way and that we have this discussion over and over again. So I thought it'd be a great topic for us to talk about today on the podcast. And that's really, how do I compete with big box companies? And we're talking about companies like FabFitFun, Ipsy, Birchbox, HelloFresh, any of those really big name subscription companies. That's what people see in their feeds and it instantly shuts them down. So if you're listening and you've ever seen like a FabFitFun ad or a Birchbox ad or whatever industry you're in, if you've seen a box from a big box company in your feed and you look at it and you instantly feel discouraged, um, it seems like they're putting hundreds of dollars worth of items in their boxes and charging pennies to the dollar, right? So it feels like they're putting $400 and $500 worth of products in there and charging $50 or charging $29 or whatever whatever the case may be. And in your mind, you're ready to give up before you even start because you're like, I can't compete with that. There's no way I can put that amount of products in my box and charge $29 or $59. And so you're just stopping before you ever get started. So it's really a mindset shift. And I want you to just open yourself up to this conversation. And if you've ever felt that way, I want you to know that a lot of us have, even me. I felt that way in the beginning. There's a company that I was following, and really they pushed me to start my subscription box. And I'm going to tell you that in a way that makes sense here in a second. But when I was watching this larger company do a subscription box, I, I just kept getting this feeling like, how do they afford to put so much in their boxes for so little? Like, it was mind-boggling to me. And I kept watching and watching. And as I would watch it, months would go by and I would just see some things that I thought, okay, I need to do this, I need to do a subscription box. And let me tell you why. So many of you know that I have a monogram subscription, and so I have one item in every box that has a monogram on it. And so I follow other monogram sites for inspiration to see what they're doing. I'm always curious about trends, so I follow other larger companies that provide monogramming. And so I was following this company, um, and I would see their Instagram page and they had this monogram subscription and it was super cheap. It was like $20. Um, they got 3 items in a box, one of them had a monogram on it. And I just kept thinking to myself, how are they making any money on this? And I know you guys say this too when you're looking at— I mean, if you're in the pet industry and you look at like BarkBox or some of those other pet subscriptions, or any industry, and if you're doing beauty and cosmetic, and you look at Ipsy, or you look at like Birchbox, like, you keep thinking, I know what those items cost, how are they making money? And so that was going on in my mind. And I kept telling myself that I was too small of a business, I didn't have enough resources, I wasn't manufacturing anything at that time. And there was no way I was going to be able to provide that kind of value for my customer. But as I kept watching this, and as the months would go by, I would see their box reveal every month, and here's what pushed me into starting my subscription box. I saw the comments, I saw the reviews, I saw the lack of the customer service, I saw a lack of connection with their audience, and I kept watching and watching, and I thought, I can do this. I can do it better. I didn't say to myself, I can do this and I can do this cheaper. I didn't say to myself, I can do this and provide the same items at the same cost. I can do this and provide a better experience for my customer in a way that they're not able to because they have no connection with that customer. And so that's what started me on my subscription box journey. So seeing that big box company really helped propel me into doing what I wanted to do, but in a different way, in a more connected way. So there's really two ways you can look at this. Is there a big box company doing what you would like to do? What are they not doing right? I want you to take notes of that, like what are they not providing that you could? And then also I want you to— I don't want you to think about the price of things because in the end, the price of your subscription is not what's going to sell your subscription. You see companies like FabFitFun and they charge, you know, $29 or $59, and they have coupons all the time. And they're really getting that stuff either free to put in their boxes because these brands want to advertise in their subscriptions, or they're getting it very cheap. We as small businesses cannot compete with that. So that is the first thing I want you to— I want you to understand, and I want you to feel wholeheartedly. What we have to do is we have to look at this completely different. And I was trying to think of an example to give you to really help you understand this, and all I could think of was, um, McDonald's versus your favorite restaurant, right? So McDonald's is a big fast food chain that probably everybody listening knows. And so I want you to think about the difference between McDonald's and your favorite local restaurant. And just, it's apples to oranges, right? Like, you can't compare the experience, the food, the feeling, the ambiance, everything that's involved from McDonald's to your favorite local restaurant. And so I want you to think about that because that's what we're doing. That's what, in our mind, we're comparing ourselves to McDonald's. We're comparing ourselves to those big box companies, and it's apples to oranges. And your customers feel that too, and they are not going to compare you to a big box company. We're small businesses. We're deeply connected and rooted to our businesses. And so I want you to think about that McDonald's and local restaurant comparison as you work through some of these things. There's really 3 main things I want to talk about with you today when we start going down this comparison route that we shouldn't be on. The first one is Comparison is the thief of your dreams. I use that quote a lot and you'll probably hear me say it again, but comparison is the thief of your dreams. We've got to stop the comparison. Quit comparing yourself to the boutique down the street. Quit comparing yourself to a big box company. Quit comparing yourself to McDonald's. You've got to quit comparing what you do to other people. Stay in your lane. We don't need to compete with these other boxes. And you know, the, the best thing I could tell you is that I don't think about those things until they're in front of me. Right. So if I'm scrolling through Facebook or I'm on Instagram and there's an ad that pops up, that's when I start to feel bad about myself. That's when I start to think about, well, I can't do what they're doing. So if that is what is happening when you are seeing other things on social media, I want you to unfollow them. I also want you to like hide the ads or block the ads. You can do that on different ads that are popping up in your feed, because if something is putting you in a funk, if something is making you in a bad mood, if something is making you feel less than, we need to remove it from the equation or what is going to happen is Every day, every time that you see those things, you're going to go right back to that place. I'm not big enough. I can't give a big discount. I'm never going to have 10,000 subscribers. I'm just a small business. I can't do a subscription box. That's what's going to play in your head like a broken record all the time. So we have to remove that. We have to remove that energy from our life. And the best way to do that is to remove it from your social media. Unfollow those pages, snooze their ads, block their ads, all the things so that you can just stay focused on what you are doing and how you are providing, um, for your customer. So that's number one. Stop comparing. We're not McDonald's. It's apples to oranges. And here's the other thing: we don't want to compete with them. I don't see FabFitFun as my competitor, not one bit. I don't see this other monogram business that I was watching for so long as my competitor, not one bit. I'm different. And that's what I want to talk about with number 2. We've got to create an experience. We've got to create a personal connection, and we do that by how we're curating our boxes. And we talk a lot about that in the membership. We talk a lot about what makes our boxes different than the big box companies. Do we have a connection with our customers? Are we connecting with them in social media? Are we connecting with them, um, through text? Are we connecting with them through email? So we're building real-life connections. We're going live. People see our faces. People get to know our personalities. We're building connections that these big box companies, they don't have because they're a brand, they're not a person. And so that's what I need you to remember. You're a person and you're not a brand. I want you to focus on creating that experience so it no longer, it no longer becomes the stuff that's in the box, but it's about the way you make someone feel when they get that box. Not about the stuff, but it's about the feeling, the experience that they're having every time they receive a box from you. That is something that we can compete on. That is something that we can do better than those big box companies. So that's what I want you to focus on. I have subscribers that have frequently told me that they feel like I am sending them a gift that's made just for them in the mail every single month. And it's funny because they're paying for it. I'm not sending them a gift, they're buying a gift, but they have this feeling that I am sending something that is just for them, even though I have 2,700 other subscribers. So I want you to think about that. How can you create something where someone, your customer, feels like they're getting a gift directly from you. And if you can just keep focused on that, that's going to be the difference maker right there. So number 1, we're going to stop comparing. Number 2, we're creating an experience and a connection. And number 3, I want you to think about when we, when we think about this comparison factor and how do we compete, I really want you to understand what, what your goal is, because these big box companies, their goal are tens of thousands of subscribers. They have a huge payroll, they have tons of employees, they've got warehouses, they have manufacturing. I want you to think about what your goal is. Is that your goal? Is that your goal to have warehouses, employees, a big team of people. If that's your goal, then let's go, let's do it. But a lot of times that's not most of our goals. Our goals aren't to be this huge big company. A lot of times our goal is to have extra money in the bank account. A lot of times our goals are to level out the expenses of our businesses so that we don't have to wake up and hustle every single day. So I want you to think about what your goal is in starting a subscription box. For me, I really wanted to create a VIP experience for my customer, and by creating this really exclusive, fun, limited edition style subscription box for those customers that were my best customers, that was my first objective, my first goal with this subscription was to create this really unique, fun experience. And did I have a number behind that? Sure I did. And that was my second goal. So my first goal was to create this really special experience, but that second goal became a financial goal. And I want you to think about your financial goal for us as e-commerce, or even if you have like a brick and mortar Product sellers in general, we go through these like ups and downs, and it can be daily, it can be weekly, it can be monthly. But we have these up and downs like a roller coaster of we have great sales today, and then I might not have any sales for the next 2 days. And then I had a really great month in December, but now in January it's dead again, and I don't know if I'm going to make my bills. So if you are sitting here listening and you know what I'm talking about. It's these ups and downs that we have. And if there's a way to really level out those ups and downs, that's, that should be your first financial goal. So for me, that number was $100,000. And I want you to sit here and think about what your number is, and you might have to get out pen and paper and really put the numbers down. But I want to, I want you to think about your business. And if you don't have a business already, I want you to think about what your goal is by starting this business. Is it side hustle money? Is it extra income for your family? Is it your opportunity to contribute to the household, you know, bills? What is it that is your financial goal here? For me, my goal was having enough subscribers that would pay my fixed expenses with my business and give me a paycheck. And you know, it's not even a high paycheck. It's enough to just pay my bills at my house. Right. So the fixed expenses were like pay for my building, pay the utilities. Um, those were my fixed expenses. So if I had enough to cover the rent and utilities, I had enough to cover a paycheck for myself. Then I didn't have to wake up and hustle every single day. Like I didn't have to worry that if I don't I don't sell X number of items today, I may not make the rent this month at my, at my physical location. And I know that's a burden that a lot of small businesses have and have had even more, you know, present over the last year than ever before. So if there was a number that would cover your fixed expenses with your business, whether you have payroll, you have an employee, you have a building, whatever the case may be, that your fixed expenses in your business and then give yourself a paycheck. I want you to figure the math on that and figure out what is that goal for you. For me, in the beginning, that was 100 subscribers. So that was my first goal, was to get 100 subscribers, because 100 subscribers to me meant that I had enough money in my bank account to cover those fixed expenses, expenses. And then everything else on top of that was just gravy. It was a bonus. I had extra money to do extra things, to buy extra product, to hire another person, to whatever I wanted to do. Once I got to 100 subscribers, it now leveled the playing field for me as a small business owner. And what happened was I got to 100 subscribers in my third month, which I didn't see coming at all. I thought it was going to take me a year to get there. I didn't know. And so Then as that became $200 and then $400 and then $800 and now over $2,700, it has really changed and up-leveled my business. So every time that I would grow, I would be able to, one, buy product further out. That was a huge deal for me. Two, I would be able to hire more people. Three, I would be able to pay myself a little bit more, cover more of my home expenses. So really those should be our goals. What's our goal by providing this box? And then what's our goal on a financial level? Because those are important. We're small business owners. We're not doing this for free. We are doing it to provide, to provide for ourselves, our families, our business, our employees, all of those things. So one, know, as you're sitting here thinking about this, what is your number? What is your number? Put it to pencil and paper. And really figure out what your number is, because that's going to help you see that you don't have to compare yourself. You don't have to compare yourself to the big box companies because I guarantee that most people listening right now, they don't want the 10,000, the 20,000 subscribers. They don't want or need that. That's a lot. That's a lot of headache. That's a lot of logistics. There's a lot that goes in with that. And that's a big business that you have to run. But what would the difference mean for you to have 100 subscribers or 300 subscribers or 500 subscribers. That's a big deal. That's a huge revenue generating part of your business, especially if you're a small business. That could mean the difference between staying open and being closed at any given month. That could mean the difference of comfortably hiring 2 or 3 more people, knowing that you're going to have that revenue to pay them every month. And it's not going to stress you out. It's like this huge weight lifted off of you once you can build that revenue into your business and you know it's going to hit your bank account every single month. So I really want you to take some time and think about what that number is for you. It's a mindset shift and it starts with one subscriber. So when we think about building a house, we build it one brick at a time. And when we're building a subscription, we're building that one customer at a time. So if you get anything out of this today, anything out of this podcast, there's a few things I want, I want you to get out of it. Okay? I want you to stop putting it off. Stop dreaming about it. Stop listening to podcasts, thinking about it. Start doing it. Stop putting it off. Stop telling yourself that we can't compete with these big box companies. We don't want to stop waiting for the right time. There's never a right time. It's like having a kid. You just do it and you figure out how to be a mom. Like most people aren't prepared for that. The same thing about your subscription box. You do it, you do it messy, and we figure it out along the way. Start building what can become an amazing business for yourself. Quit thinking about it and let's start. And ultimately, stop comparing yourself. Stop comparing yourself to other businesses like yours, other boxes like yours, other retail establishments down the street like yours. We're not McDonald's. Remember that. Go unfollow any business that puts you in a bad mood or makes you feel less than. Just go unfollow them. I promise you, it will be the most freeing thing you can do to remove that from your life. Get off their email list, get off their, their social media accounts. Just stop following you. Stay in your lane. We've got to get our mindset right. And that's what today's podcast is about. Once we can make that mindset shift, we're on the way. Stop comparing yourself. One box at a time. Let's go. Make sure you subscribe to the Launch Your Box podcast. I'd love for you to take a minute to rate and review it. Let me know which episode is your favorite so far. Don't forget to join me next week right here.