- Company: Foxy Box
- Player: Athena Lazarides
- Est: 2013
- Break-even: Within four months
- Visit: www.foxybox.co.za
If you appreciate the value of recurring revenue, a subscription-based online business model is a sure bet. One entrepreneur who is seeing the value is Athena Lazarides, founder of Foxy Box, an online adult store that gives people the chance to explore their sexuality and have some fun without having to step into a seedy sex shop.
Sexy without the sleaze
With a background in psychology, Lazarides wanted to offer consumers – and women in particular – an opportunity to experiment with toys.
“There is a growing social acceptance of sex paraphernalia, thanks to film and television, but many people still find it intimidating to walk into a store.
“My goal is to enable customers to try out merchandise without having to deal with any of the stigma. The customer feedback we receive has shown that we are doing it right.”
Why subscription works
General growth of the industry, thanks to greater social acceptance, has worked in her favour and there are no companies with a dominant market share in the business. The benefits of a subscription-based business model enable her to place inventory purchases against future sales.
That predictability allows an entrepreneur to maintain lower inventory levels and negotiate better deals with suppliers, which means customers get greater value for money.
Subscription sales also mean that marketing expenditure, through search engine optimisation and Google AdWords for example, can be amortised over the time that a customer is retained.
The subscription model allows Lazarides to establish long-term relationships with customers rather than selling to them once and hoping they’ll come back.
Foxy Box offers six- and 12-month subscriptions, and a once-off option too for those who just want to dip their toe in. A range of different types of boxes includes ‘standard’, ‘prestige’ and ‘for brides’.
Boxes are discreetly packaged and delivered to the customer’s door. Three to four products tied to a particular theme are in each box. It’s this concept that has had an immediate impact on business growth.
“When we started, we shipped 30 boxes,” says Lazarides. “The only marketing we did then was sending emails to friends and family.
“Following a targeted online marketing strategy, we broke even within four months and have been growing monthly since then. We have an online newsletter for subscribers that has helped us to grow organically.”