[DelaneyM]

The problem is the sales order flow and fulfillment / operations at scale (which is an engineering challenge).

When you're in a growth period that's easy to discount, your challenge is (and should be!) top-line revenue. But in a crunch shaving 20-50% of order processing and fulfillment costs is mana from heaven, creating profit where one there was only red ink. That takes a hand-rolled system, and ops-eng is hard and requires very specialized knowledge.

[pbreit]

Maybe in a conventional ecommerce company but monthly boxes are infinitely easier to manage ops-wise. You only have a dozen or so SKUs, know exactly how much you need weeks in advance and have months to plan everything out.

[DelaneyM]

tl;dr: so you haven't actually implemented a scale ops system, eh?

A) Shipping pre-packed boxes is not substantially easier. Order assembly/fulfillment is not the hard part of ops. Sort of like HTML is not the hard part of web development. It's just the part laypeople experience first-hand.

B) Birchbox is investing a lot in follow-on ecommerce sales of the same products they ship monthly anyways, so they don't get to make simplifying assumptions.

C) Birchbox is substantially harder than a traditional pick&pack setup. It's unique enough that they have to build their own model, makeup is perishable (so skus aren't fungible!), they have hundreds of small providers by design, and their sku set cycles fully every month or two.

Source: I built system & ops for a company with both a subscription business and substantial real-time eCommerce ops, which is comparable in size to Birchbox USA.

[morgante]

Actually, I believe birchbox does heavy customization and tailoring of boxes to individuals.