Should You Hop on the Goodie Box Train?

Take a peek inside the subscription commerce boom.

Decisions, decisions. On a typical day, the average American faces approximately 70 choices, according to Columbia University researcher Sheena Iyengar, who also found that an overload of options is making us less decisive.

That may be one reason why more of us are turning to the exploding trend of subscription commerce, which generated $5 billion in revenue in 2014, according to Cratejoy founder Amir Elaguizy, whose platform gives entrepreneurs the ability to create their own subscription boxes.

It’s no surprise that the craze has caught on. Through subscription services, convenience comes in the form of a recurrent supply of carefully packaged goodies – the most popular niches include fashion, beauty samples, organic food and eco-friendly products, even everyday household items through services like Amazon’s subscribe and save.

And the array is rapidly expanding. With just a few taps, you can summon everything from socks to steaks, making it easier than ever to spice up the season with novel and personalized gifts that keep on giving.

However, while navigating the ever-expanding subscription landscape, there are a few things to keep in mind. The first is to be sure to work any recurring payments into your budget. Depending on the service, you may find yourself paying weekly, monthly, quarterly, annually – or even sporadically, believe it or not. It’s ideal to know exactly what kind of financial obligation you’re signing up for.

Birchbox isn’t one to hit you with surprises. You pay $10 a month and receive a pretty package stuffed with an assortment of high-end beauty samples. Easy enough. But then there are services like StitchFix, where things can get a little bit tricky.

StitchFix charges a $20 styling fee each time you receive a box filled with five fashion items handpicked based on your style profile. If you keep something from the box, the fee is applied toward that item. If you keep everything, you’ll receive a 25% discount on each item. However, if you send everything back, well, you just enjoyed a $20 fashion show.

If you’re thinking of giving a subscription as a gift, be sure that it will arrive on time. In the case of Quarterly Co., subscribers choose from a list of well-known curators. Think style expert Nina Garcia, scientist Bill Nye, NBA player Jeremy Lin and Grammy winner Pharrell Williams. However, each curator’s box ships at a different time.

The box boom has bred services in all shapes and sizes. Whether you’re itching to test drive a luxury timepiece through Eleven James; hoping to sharpen your culinary acumen through Blue Apron; yearning to sample artisanal meats thanks to Carnivore Club; or eager to sip some of America’s best indie whiskeys via WhiskeyDigg; the subscription landscape is your oyster.

Just remember, there’s no free boxed lunch. So familiarize yourself with a service’s fine print before signing up.

By the numbers:
  • Birchbox pioneered the industry by launching its subscription service in 2010

  • 10,000+ subscription boxes are available on the market

  • The industry has grown about 200% year over year since 2011

  • Subscription commerce generated $5 billion of revenue in 2014

Content created by Raymond James for use by their financial advisors.