Bili Balogun always loved beauty and experimenting with new products, so much so that she started her own beauty subscription box months after graduating from college in 2017.
Bootstrapping with only $200, Bili launched Tribe Beauty Box and grew the business to over $300,000 in sales in 16 months.
In this episode of Shopify Masters, you'll hear from Bili Balogun of Tribe Beauty Box on how to collaborate with brands, build relationships with subscribers, and launch a business through other Facebook groups.
When you’re starting a subscription box, you ideally should have prior brand relationships and have prior experience in the industry.
Tune in to learn
- What it means to use your disadvantages as your advantages
- How do you know when to move from research and planning phase to execution
- How they tripled their Facebook group numbers with a giveaway
- Store: Tribe Beauty Box
- Social Profiles: Facebook, Instagram
- Recommendations: Klaviyo (Shopify app),Kickoff Labs, Privy (Shopify app), Product Reviews (Shopify app), Smile Loyalty Program (Shopify app),ReferralCandy (Shopify app),Pirate Ship (Shopify app)
Felix: Today, I'm joined by Bili Balogun, from Tribe Beauty Box. Tribe Beauty Box helps women discover beauty by sending women five new full-size beauty products every two months, and was started in 2017, based out of Toronto. She bootstrapped her business to over $360,000 in sales in just 16 months. Welcome Bili.
Bili: Hey, how's it going?
Felix: Good, good. You told us that your focus, from the beginning, has always been on building a business of accessibility and empowerment. How did you know that those would be your guiding values?
Bili: Definitely. It's pretty apparent to know what is missing in the industry and, just by looking at competitors and seeing what they're all about, what they focused on, I decided to go a different route and focus on something that, not only, the customers needed, but something that was really important to me as woman of color, which is why I built my business on those values.
Felix: How did you know there were customers out there that also gravitated towards these values that you were essentially building your whole business around?
Bili: Yes, I'm in numerous forums, beauty forums, not only just on Facebook through Facebook groups, but also Reddit, and I follow a lot of viral Twitter accounts. Just to be able to see what people are putting out there, I was able to know that customers really needed more, not only just transparency in the beauty space and in the products that they were using, but also just needed a community where they felt empowered in their own beauty.
Felix: Is this kind of evidence very clear for you to see, where you can actually see that the community is talking about things that are missing or, I guess, the existing market, rather?
Bili: Absolutely. Absolutely. When you look at brands like Fenty Beauty that were able to basically turn the industry around by offering 40 shades of foundation, it such a loud response to the lack of inclusivity, not only women of color, but with race. There are so many male makeup artists that don't get the platform that they should. It's not just only about race. It is also about gender, and equality is so important in the beauty space, because everybody has the right to feel beautiful in their own skin and in their own individual terms.
Felix: Got it. You were basically noticing, and looking at, brands that were essentially popping off, and you were able to see why they were getting all this attention, and you recognized that "Oh, they are filling a void the marketplace." Did you see the opposite, where people were commenting on more established brands and saying, "Why don't you offer this? Why don't you offer that?" Were you seeing things from that side, as well?
Bili: Of course. Of course. Just being a woman of color, even amongst my friends... My friends are also women and people of color. It's difficult for us to find... It was... Let me correct myself. It was difficult for us to find shades as dark as possible, that is at the end of the spectrum, and that should not be an issue. If there's a shade on one end of the spectrum, there should be on the other. Right? That's mainly the issue that we were having, mainly up prior to, I would say, last year.
Bili: People were looking at brands under the microscope. People were asking them why they only had 12 shades of foundation. Why did they only have 15 shades of concealer? They're not only 15 shades of people. It was just really needed to open the space more and open the floor to the conversation, and I'm glad that that happened because brands, now, it's become a standard to be able to cater to every single person. I don't know any brand who can remain successful and who can be sustainable if they're not catering to everyone because it will cause an uproar. That's for sure.
Felix: Got it. You recognized that... you mentioned people of color didn't have the products, or I guess the brands didn't put out the products that they require. What did you do after recognizing this? Once you saw that there was this gap. You saw certain brands coming into the space, some new brands coming into the space and that there was a lot of... They quickly built up a customer base because there's such a deep need for their products and for their particular solutions. What did you do after recognizing that there was, all of a sudden, this groundswell of new companies and new products that are catering towards, again, an area that had a lack of supply to meet the demand?
Bili: Yes. The first thing I did was definitely adopting those customers, opening a space for them, putting my face out there. There are many faceless brands, and being able to put my face out there as a young woman of color, who's also an immigrant in a first world country really helped me relate to my customers even better. I get so many messages from customers who are like, "I'm so happy to see you in a position that you are in the beauty industry." The beauty industry, surprisingly, is run by men. A lot of the CEOs of the big name brands that you and I know are male, and it's just very uncomfortable for me to be told and to be given rules and products for what my beauty should look like from someone who doesn't even look like me. That's the biggest issue that we had in the community.
Bili: Creating Tribe Beauty Box, I really opened the space. Everybody, not only just women of color but everybody can use the products in my box. The shades that we send out, the products that we send out, can work with everyone. That's so important for me, and every box... Every time that I have to curate the box, not only the box, but our content and our brand messaging, and all of that, I make sure that we're catering to everybody because everyone has the right to feel beautiful.
Felix: Were you afraid of putting your face out there, like you said, to being vulnerable?
Bili: Absolutely. Absolutely. I would say my age, alone, is one of my biggest insecurities. Most of the brands that I work with, and the brands that I know personally, their CEOs are way older, their marketing managers are way older than me, so coming into the space with no prior knowledge or experience in the beauty industry was pretty scary, but that's where I was able to do my research and really use, I would say, my disadvantages as advantages. I was able to open the floor, create a community where I educated my customers, but they educated me, too. It was really a dialogue, and that's how we've been growing, so far.
Felix: Can you say more about using your disadvantages as advantages? I think that is a really important one that I feel a lot of entrepreneurs try to sweep their disadvantages under the rug. You are bringing it to the forefront and actually using that to help you essentially market yourself. Tell us more about how you use your disadvantages.
Bili: Absolutely. When you're starting a subscription box, you ideally should have prior brand relationships and have prior experience in the industry. Honestly, I had absolutely none. I probably knew two, three brands, but these were small brands, friends and family. I was able to really do a lot of research. The fact that I didn't know enough gave me that boost to probably do so much research that I might know, even more than the ones who have been in the industry for a little longer than I am, because not only was I learning the foundations of the industry. I was also learning the trends and the forecast. I'm always up to date with those things. That's the first thing.
Bili: Secondly, I was just able to come out and be very honest with my subscribers and going, "Hey, guys, this is who I am. This is what I've done prior to owning Tribe Beauty Box, and this is my vision for the Box." Any questions that I have, I ask my subscribers. I just recently asked my subscribers if they would rather be billed on the first or on the 15th. Rather than consulting with an agency or a firm or a consultant, I took the question straight to my customers and asked them what they preferred. Everything and every major decision that I need to make, I make sure that I put my customer at the forefront of it. I think that's really been the major reason why we've been successful and we've been able to touch so many lives and things like that.
Felix: I got you. Basically, your big disadvantage was that you came with very little experience, very little knowledge, which made you not be burdened with assumptions. You had to ask questions. You had to do the research.
Bili: Exactly. I had to be transparent, and I had to be authentic with my subscriber base.
Felix: Right. I think, when you start a business, the one path you took, I think, is one way, I think, a path that some other people take is to try to be bigger than who they are and try to not ask these question, kind of, assume they know the answers and go that. Obviously, the way that you've taken helps you be really closely in touch and in tune with what your customers want. Of course, that pays off in the business that you've built. [crosstalk] You mentioned that you did research. You mentioned that you know the trends, you know the forecast. How did you know you were ready to move on from this research-only phase into taking action on the research that you've done?
Bili: That's a really good question because I feel like a lot of... It's almost self-sabotage that cripples us as entrepreneurs, is this feeling of not being ready or not being enough. I'm the kind of person who... I like to cover my ground. I like to do my research, but, at some point, you just have to hit go, and even if you aren't ready, you just have to be flexible enough to be able to fix things on the way. Nothing will ever be perfect.
Bili: No research will cover 100% or forecast 100% of the issues and bumps that you will face along the way. It's really just having an open mind and having resilience in this industry, and in entrepreneurship, in general, you have to be extremely resilient, which means that even if you research something and your research predicted 100% success rate, the market or the customer may not be ready for what you're offering. You just have to learn to be resilient. Study the data that you have and move forward with it. Just convert, be flexible, and it should work out in the end.
Felix: Got it. I think, as a business when it first starts out, they start up and it first starts out, you have the bandwidth to be super intuitive with your customers, spend a lot of time with them. I think as you grow unless you're active and you make it a priority, you would just become more distant from your customers. What do you do every day to fight this gravitation, I guess, that pulls you away from your customers as you grow, and as your time and attention are demanded elsewhere?
Bili: Definitely. Especially, I would say, as a one-man show in terms of operations, I did most of the operations in the business. It's really easy to forget to be in touch because I get so drowned in my work. I think just building a community is so important, and when you have a dialogue with your customers, you don't have to be the one who always initiates the conversation. Right?
Bili: For example, we have a Facebook group called Tribe Beauty Box Lovers, and customers and subscribers, everyone in there isn't actually a subscriber. Just anybody who's interested in the product is able to post a product that they find interesting, or a trend, or a funny video that they found on social media. Even if I'm not always initiating those conversations, my subscribers have found a niche place and a niche community where they can post things that they relate to, and that we all relate to.
Bili: When you're able to build that... Obviously, when you start, you have to build a foundation for it, but as you grow, you'll find that the dialogue doesn't always come from you. It's actually even better when you're not the one always initiating the dialogue because it just shows engaged the community is.
Felix: Yes. I want to talk to you on this aspect of the community. You got this Facebook group. Is this your favorite place or favorite way to stay in touch with your customers and prospective customers?
Bili: Absolutely. Absolutely, because when I'm planning boxes, for example, and I'm given a couple of options from brands, I'm actually able to just post both options in the group and ask people to vote. I really like having my customers as the decision-makers in the brand and in the company because, at the end of the day, they're the ones who are getting the products. Me making all the decision ends up being slightly biased because I don't like what all my consumers like. I may like something that none of them even like.
Bili: That's why being able to have such an open and transparent space, where I can be honest and post things or post problems that we're facing... Like, I think two weeks ago, I posted about how I wanted the box to be more eco-friendly and all of that, and customers were like, "Oh, how about you take out the styrofoam peanuts that you put in the box and replace it with biodegradable ones?" They sent me links, and so many people gave options for how we can make the box more recyclable, and ideas for how they can use the box as storage. It's just such an amazing community where customers can be decision-makers.
Felix: How large is the group, today?
Bili: I believe we're up close to 5,000 members.
Felix: Wow. At what point did you feel like it took on a life of its own?
Bili: I would definitely say, when we hit around five, six hundred members, because the first five, six hundred members, were our first subscribers, and they were really, really engaged. I would say it's been a bit more diluted, now, as we have people who are not subscribed to the box, but the first five, six hundred, it was a very, very engaged group, and customers were posting their boxes. They'd post pictures with their pets, when the box gets delivered, and just really fun things like that.
Felix: You mentioned that you have to, kind of, build a foundation at first, because let's say that it's you and 10 people, at first. What do you do to start building the foundation of a Facebook group?
Bili: The first thing is to just, as the admin, to just position yourself as the expert of the industry, so when people have questions, I'm able to give them expert advice and my expertise. When they have doubts, or when even I have doubts, I'm able to bring that up as soon as possible to them, so those are the first things. Customers and just group members need to know that the group that they're in is of value to them. Of value means that I'm sharing content that they can use in their everyday lives. I'm sharing tips and tricks that they can use when they're on the run, when they're doing their make-up, or when they need to revamp their skincare routine. It's really all about the great content.
Bili: When you have such great content, people can actually even share that outside the group, and it attracts even more quality customers and more quality subscribers into the group that we can convert into paying subscribers. When that foundation's done, I then was able to pick out the most engaged and the most knowledgeable group members. I, then, turned them into the group admins and group moderators. Now, it's not just me moderating and administering the group. There are five other women, who are helping me with content and contests and giveaways, and things like that to keep the group engaged, to keep the group alive.
Felix: Got it. When you are building a foundation, you are posting daily? How often... how much content are you producing?
Bili: I was definitely posting daily. I believe I was going on Facebook Live almost weekly. Facebook Lives are so great for groups. Customers are really able to know who you are. I'd be doing my make-up, or I'd be at the office taking a break, or I'd be in between calls, and I'll just go on Facebook Live. It doesn't have to be 30 minutes. Sometimes it was just 10 minutes, just asking them questions, asking them about their day, asking them where they're from. Just being their friend is the first thing. You have to be their friend, first.
Felix: Makes sense. When you were building this group up, earl on, what were you doing to promote it?
Bili: Promoting it, I was already in other groups, and I didn't promote my group through Facebook at first. I already had an email list, through my website, so I invited people to the group by sending an email to my email list, like, "Hey, we have this amazing group. Please join for behind-the-scene and exclusive content." That, I believe we had maybe the first... That gave us probably the first 150, 200 members.
Bili: Then I ran a giveaway, and the giveaway really blew the group up. I believe it was like a $100 or $200 gift card, and all you really had to do was say why you love Tribe Beauty Box and add three friends who could love Tribe Beauty Box to the group. That probably tripled the group numbers in a day. Then, we kept going, we kept going, and I believe that first give-away helped us hit the 1,000 member mark.
Felix: Got it. What about today? Are you still running these giveaways, or are there other ways for you to drive sign-ups?
Bili: Yes. We lost members, not sign-ups. We actually run giveaways every box that goes out to every two months. What we do is that we ask people to create looks with the products that they got in that month. Not only does it keep the group engaged, but it actually encourages people to use the product that they received and find cool and quirky ways to use the items that we sent that month.
Bili: This month, one of our admins did a zodiac challenge, and it didn't have to be exclusively Tribe Beauty Box product, but just makeup products that you have in general, create a look that was your zodiac sign, so just cool things like that to keep the group engaged. Often, we just find people adding their friends to the group because they get such great content and information through the group.
Felix: Do you find that's the most profitable channel for you, having this group and discovering the products through the group?
Bili: I would say what helps us drive sales and awareness is one, YouTube, and then our email marketing. We have an email size of 22,000 people on our email list, but for the group, it just really just helps us keep the community and probably help us reduce churn because people get closer to the founder, they get closer to other members of the team, and they learn to love the products. Even if somebody doesn't like a product, or is not happy with the box this month, they'll post about it transparently, and we allow that. Other members would either be like, "Oh, yes, I want this product so much," and myself and my admins can give them tips and ways to use the product, or other members of the group would be like, "Hey, how about you try this? I paired this with this. Try that, and you'll probably like it."
Felix: I got it. The Facebook group is useful for, again, reducing churn because people will feel like they're a part of the community. What do you do to get them... Like, a new customer signs up on the website. When and where do you invite them into the group?
Bili: We have an email series. We use a really great email software called Klaviyo, and part of our welcome series is a video. The first email has a video of myself introducing them to the brand and we're like, "Hey, welcome to Tribe Beauty Box. This is what we're all about, and this is why I started the company." The second video is all about the benefits of being part of the tribe and the community, and that's where the Facebook group comes in. Then, afterwards, we have other emails that send them promotions and discount codes and gift items, and things like that.
Felix: Do you know what percentage of your customer base ends up making it into the group?
Bili: No, I don't know the exact percentage.
Felix: Got it. Okay, let's talk about when you first launched the business. Actually, let's say that you understood that this was a... These two [inaudible] that we taught early on was something that you wanted to pursue, and you saw a lot of companies popping up that were doing it already. You could've gone down a route of just inventing your own product, inventing your own brand around that, but you decided to build this kind of platform for existing brands. Did you have this kind of dilemma in your head of which path you wanted to pursue?
Bili: Absolutely. Yes, I could be putting this much effort into my own brand and promoting my own product, but that will come along the way. We have many ideas for expansion. I believe that what we're doing with Tribe Beauty Box, we're not only a box, but we're really the marketing channel. We're like a marketing agency, and it's a really interesting type of marketing because it's direct to consumer. Brands get first-hand feedback and reviews of the product that we put in our box, and they get to collect that data and really help themselves grow as a brand. That's how we're starting, at first, and with that, we're able to grow a loyal base. From there, we'll be able to release our own product, and we can already tell that it's becoming more and more successful because we do a lot of limited edition boxes.
Bili: In April, we launched a limited edition CBD box. It was the first CBD beauty box, and we practically sold out within the first two days. We had some logistical issues with payment processes, but apart from that, we sold quite a number of the boxes. We would've sold out if we didn't have any of the payment processing issues, but it just comes to show you that customers who are already engaged with you via a different platform, or via a different product offering, doesn't mean that they won't be ready to move into a new product offering when you, yourself, as a brand, is ready. It's all about that brand loyalty, first.
Felix: I like this approach of being a platform first, and then building a brand around that platform, and then learning a lot along the way to, then, apply to the products you might release. When do feel like you'll know when you're ready to release, or focus, really, your attention on your own products?
Bili: We've already started working on that. I actually just got back from [Cosmo] Cruise in Vegas yesterday, and we've already started working on our products, but it doesn't mean that we'll stop doing the subscription box. It just means that we'll have add-ons, and customers can have Tribe Beauty branded products. We already private label a few products, and we'll continue doing that. As soon as it's ready... I believe that, by early next year, I'd just like to get everything as perfect as possible before the launch, especially that we're expanding to UK in Q4 of this year, so we have quite a few things to do, but I believe that Q1 of 2020, we should start having our own product.
Felix: Was this always a goal from early on, or did you start recognizing things inside the business, or with the customers, that made you realize that, "We should release our own products?"
Bili: Yes. It was always an idea for me, but it wasn't something that I was actively looking to do, just because having your own brand is, not that it's more work, but it's a whole different ballgame than putting other people's products in your box. With customers asking for Tribe Beauty Box branded products, we have PopSockets on the website, and we sell those literally every day. We'll start with tools like makeup bags and accessories, to start off, to test the market and test the brand. Then, we'll start working on products, but we never want to be a competitor to the brands in our boxes, so we have to make a firm decision of fully transitioning into a brand with similar products as the brands that we featured in the past, or just having complementary products like tools and accessories.
Felix: What do you think the pros and cons are, of those two approaches?
Bili: I would say, for the tools and accessories, we're obviously very limited, but the pro is that it's an easy add-on. If you're having a box that has a lipstick, a palette, and things like that, why not add on a makeup bag and having something to store your products? Having your own brand is also great because we really get to say, "We've had all this experience, working with different brands, and here we are, now, with our own product as experts and as top of the industry because we've worked with so many brands, and we know what customers want."
Felix: What are some of the things that you've learned, from having your own platform, that you will want to apply to releasing your own product, like knowledge that you didn't have if you were to just start off with your own brand from the beginning?
Bili: I would say one that we would really want to work on is customization. It's a thing where customers... A lot of people... You'd be surprised. When a new, let's say, eye shadow palette comes out, some people only buy it because they like, maybe three, four, five shades in the eye shadow palette, and that's the only shades that they use for their makeup. Let's say it's a 12-pan palette. They like only a fraction of those shades, and that's the reason why they would still buy it at full price.
Bili: One thing that we really want to work on, on our brand, is customization, really allowing customers to pick their own colors, pick their own shades, and make things their own. That way, they're having full use of it. That's one big that I've learned that some brands are missing out on, that we would absolutely try to put in our brand.
Felix: Makes sense. I want to talk about the very early, early days. You mentioned to us that you had an initial investment of only $200. Again, you mentioned that you bootstrapped the business through over $360,000 in sales in less than a year and a half. Let's talk about that. 200 bucks, I think, is certainly not a lot of money, at all, and I think it is feasible for a lot of people that want to start off. What did you do with the first $200?
Bili: Yes, definitely. It's actually pretty feasible when you break it down. I went on fiverr.com. I'm sure you know what it is but, for the audience, it's basically a platform where you can work with outsourced developers and designers and artists and things like that. It's fiverr.com, and I was able to buy a logo from, probably, someone in India or something. They made my logo for five dollars. Then, the box design that I still use now cost me $35.00, so that's 40 bucks, right there.
Bili: Then, I needed to create awareness for the brand and collect emails. That way, when I launch, I'm, sort of, guaranteed sales, so I used KickoffLabs, which is one of these viral lead generation platforms. I created a mock-up of my website. It cost me $79 for the month, at the time, so I made sure that I set a goal for the month because I couldn't afford a second month. My goal was 2,000 emails and, in three weeks, I was able to raise 2,300 emails.
Bili: I was close to a couple of Facebook group admins, big groups that had, like, 150,000 members, and I would post my landing page in there and be like, "Hey, this is what we're doing. If you're interested in getting more information about the launch, and if you're looking for a subscription box that is offering all of these things, please sign up and give us your email." I did that, and I added a $50.00 gift card giveaway that I used across the groups. I got permission, of course. One person won the $50.000 gift card, and I did that. That was basically all I did. By then, I had obviously found wholesalers and things like that.
Bili: Working with wholesalers, at first, you're not making any profit because they're giving you very, very low discounts, opposed to working with brands directly, so around $200.00, in total, and I did that, and I was able to raise 2300 emails. I believe I was still on my seven-day Shopify trial when I opened sales, and I was able to sell about 143 boxes in my first week. Then, I launched. I actually launched on Black Friday, which was really smart because it's the biggest sales day of the year. People, were ready, had money saved up to buy things. I still remember the name of our first subscriber. I wrote it on my computer and got that first sale. It was one of the most amazing feelings, ever.
Bili: Yes, so I got the money. I told people that we would ship in three, four weeks because it was the first box. They were okay with that, as long as I was transparent. I got the monies, paid my suppliers and shipped the box. That's how I did it for the first, I would say, three boxes until I'd made enough profit to start paying upfront. Now that I work with brands directly, some brands give me a net-30 or net-60 term. Right now, for cash flow, we're still great because we charge on the 15th and ship on the first, so we usually pay our brands before anything. Yes, that's how it worked out.
Felix: That's awesome. To recap, you used KickoffLabs. It was, kind of, like a viral contest platform, and you spent 79 bucks on that account, got 2300 emails. It sounds like the crux of what kicked things off for you was the postings inside these huge Facebook groups. You mentioned that you were close to the admins. Was there a reason why you had a relationship with them already? How do you... If someone out there is like, "Well, I want to take this kind of step-by-step, methodical approach that Bili took," to start establishing relationships in communities that they want to be a part of, how were you able to get access to the admins of 150,000-member groups?
Bili: I would say, for sure, that I had the thought, and I knew that then, either I needed to start something like a community like those groups had. So many groups are just there. I would say monetize the community, but you're putting in a lot of effort. When you have a member base of 150,000, you're seeing hundreds, if not thousands, of posts a day that you probably have to approve, and you have to screen and make sure that they follow your community guides, so I started talking to admins and just finding out their tactics on how they're managing their groups and just, when they're posting, I'd comment. I always know who the admin, and I'll comment, and I commented enough that they recognized my name.
Bili: It was, honestly, all strategic because I had an idea of what I wanted to do and what my vision was, and who I needed to be on my side in order for this vision to come to life. With that, I was able to get close to them, and we became friends. We were able to talk almost every day, and that was that. There was also some admins who I wasn't friends with. I just sent them a proposition like, "Hey, this is who I am. This is what I want to do. We're happy to give you 10% of each sale that you generate, from your group, for us. We'll send you a box. We'd love for you to do a Facebook Live. We'd love for you to post this landing page on your group."
Bili: It's really all about collaboration, and if they believe in what you do. It was honestly fairly easy for me. I would say I probably did a master list of, maybe like, 200 groups. Maybe it only worked out with 15 of them, but that was enough to get me 2300 emails and 140 sales, when I opened, which was more than enough for me.
Felix: Yes. That's definitely not a bad conversion rate, at all. I think, in any industry, you could probably find 200 groups that you can try to message and see if anyone will want to work with you. That makes sense. I want to talk about these specialty boxes that you ended up creating, which I believe is... Is it the limited edition boxes that you have on your site?
Bili: Right now, we have a tab for the limited edition box on my site, but the regular box is what's advertised on the home page.
Felix: I got it. The limited-edition boxes that you create, these specialty boxes that you came up with, how did you know what kind of themes to go with?
Bili: That's also just being able to stay on-trend. I subscribe to quite a few professional industry news, not just what you see on social media, but actual research. I get trends and forecasts of what's to come in five years. I put my ear down. I talk to people. I ask them what they're doing, what they think will happen in a couple of years, in the industry. Myself and a couple of other indie brand owners have a group where we share articles and interesting things that we see on social media. Then, what we also do is that we follow other brands and see what they're venturing in.
Bili: There's a really awesome brand called Milk Makeup, and they basically revamped their brand entirely into a hemp-based brand, where they have a cush mascara, and CBD-based products, primers, mascaras, and things like that. We studied them very closely and saw how much more of response they got from consumers with that move, versus when they were just offering regular makeup like everybody else. With the laws and regulations of different countries changing, we will get to a point where CBD-based, hemp-based makeup products will be a norm, so we decided to do that limited edition box with hemp-based CBD products. It was extremely popular.
Felix: Okay, that makes sense. Let's talk about the curation process for your ongoing boxes, your monthly boxes. Tell us about that. I imagine that there is a lot of work that goes on in coordinating all of the brands and products you want to put in each box. Let's say that you are planning the next box, and you're putting it together. Walk us through the steps that you need to take to make sure everything is ready to go, once it launches.
Bili: Absolutely. Absolutely. What we do is themes. I have general themes for the year, in terms of Valentine's Day, summer, fall, Christmas. Then, we niche down those themes to products that are trending or products that are popular. For example, there's a product called the Beauty Blender, and you're supposed to change your Beauty Blender every three months. Although we don't send a Beauty Blender every three months, we'll maybe send it twice a year, and we'll curate the box around that. Most of the products in the box... The four products in the box are, sort of, complementary to the one hero product that represents the trend for that season. That's how I curate my boxes.
Felix: Got it. When you figure out what you want to... I guess, like the theme, what's your research process to find out that vendors that make sets to put into the box?
Bili: We have pre-relationships with brands where they know that we could potentially ask them for X amount of products in two months, or in three months, or in four months. They usually tell us that, "Hey, we have inventory for this, this, and this." We have certain brands that update us with their inventory levels, almost every month, or we have brands that come up to us and like, "Hey, we have this new product launching. Will we be able to launch it with your box and put it in your box to have people test it?" We'll get feedback from it, and if ever we do a restock, we'll be able to use that feedback to revamp and make the product better, to improve the product, basically.
Bili: It's really all a process. It's definitely a lot of work because you're working with different brands, different timelines, different brand marketing goals, different brand awareness goals, and you have one product, which is the box, and you try to help everyone fill their goals all with one product. It's definitely a lot of work, and the way we put different brands on social media is very respective to what their advertising goals are. Certain brands don't want us to focus on the process point. Certain of them want us to focus on the ingredients. Certain of them want us to focus on the fact that they're cruelty-free. We have a lot of communication between us and the brand, and we've asked them, "Hey, we're basically a marketing agency. What is that you want us to market for you?" That's how we work.
Felix: Is it a pretty simple proposal to them, or do you have to do some convincing to get them on board?
Bili: Yes, definitely a lot of convincing because we're not asking for thousands of units, or even millions, like some of the big boxes, so we really have to show the results. We have to show them conversions. We have to show them how and what has worked for past brands that have been in the box, or we just have some brands that just really like us as a company and are happy to just sell us their products. I would say it's about a 60/40 balance. It takes some convincing in the beginning because they really could be selling these products at retail price and making much more profit. Thankfully, the fact that we buy products from brands, so they're not losing out on any money, and they're having their brands, and their product directly in the hand of X amount of subscribers every two months.
Felix: Usually, these brands that you work with, the value prop that they're attracted to, is it just new customers that try their products, or basically new customers? They're not looking to make a profit, necessarily, on this transaction. They're looking to get their product in the hands of new customers?
Bili: Yes, exactly. A lot of the brands, their marketing strategies are all different. Everybody has a different way of marketing their product, but really a subscription box is one of the easiest to get your products in the hands of real people. They could put $10,000 in an ad, and then try to convert sales, but if a customer hasn't had the first touch with your brand facilitated, it's difficult for them to make that purchase, especially if it's a big-ticket item. If I'm being advertised a $40 cream or a $50 cream, I want to make sure that it works first. That's why people read reviews, or people go to retailers and get samples and try the product out first, before buying the actual product.
Bili: If I received a product from a brand, through a subscription box, and I liked the brand, if the subscription box gives me a discount code, and even if they don't, I will most likely be more willing to try more from the brand because my first impression has been good. It could go two ways. It could either be a great impression, or you may just not like the product. That's why brands give us multiple products in a year to feature in a box, so it's not just a one-time experience. You get, maybe, two products in a year to try from the brand before you decide, "Hey, I like this brand or I don't," and "I'll purchase from them or I won't."
Felix: Got it. When you do have a product that is a huge hit, everyone loves it, and everyone wants more of it, what can you do from there? I do see that you have your subscriber favorites section. Are those like a certain, kind of, a relationship that you established with the brands that you have noticed that they have a product that really resonates with your customers?
Bili: Yes, exactly. When there's a product that our customers really, really love, what we usually do is that we put it up on the website, or we give customers a code to allow them to replenish the product and get other items, too. There are certain skincare products in our Subscriber Faves tab that we created bundles of, because customers love it so much, and they want to have it for a certain amount of time. If the brand is okay with that, we're paying them regardless, so they don't mind us buying the product and putting it on the website for retail price, but some brands, obviously, want the direct sale, so they will give us a code, and we're actually able to track how many people used that code, and what they were able to purchase with that code, for our own stats and metrics.
Felix: Earlier, you mentioned that one of the most profitable or successful channels for you is with YouTube. What do you do on YouTube?
Bili: Why YouTube is so profitable and popular, for us, is because before we read reviews, I feel like we're such a visual generation, especially my generation. We are so visual. We need to see someone open product and their reaction, and the packaging, and the little details, and the little ribbon. People are so obsessed with the details. YouTube is a great lead for us because our, either influencers are just other subscribers who've gotten the boxes are able to share their experience with the world, and tell them, "Hey, I really like this product. I don't like this product. It was a good box, overall." Another thing that works really well for us is that people compare the present box to the past box, and future subscribers are able to know that we've been increasing in quality, month to month.
Felix: How do you find YouTubers to work with?
Bili: We get quite a few requests. I would say we probably get between five and 10 PR requests every day, so it is quite taxing, but twice or three times a year, we do something called the PR Search, where we basically post on Instagram or on the platform that we're looking to advertise. We'll be like, "Hey, if you have a Facebook group, please comment below," link to the group, and we'll check it out. That way, we have the power to really filter who and what works for us. We did that recently and that was pretty successful. The first one we did was with Instagram pages, but we're not focusing on Instagram influencers anymore, because we find that we convert into sales through Facebook groups and YouTube.
Felix: Got it. Okay, and you also mentioned the other channel is with email marketing, with your 23,000-member email list. You don't actually have 23,000 customers. Right? These are just prospects as well-
Bili: Email subscribers.
Felix: How did you build that list up?
Bili: We have a very easy way of building the list, and it's a Shopify app called Privy. I'm not sure if you're familiar with it, but it's actually really great because they have this amazing feature called Spin the Wheel. What you do is plug in different gifts, and codes, and coupons into the wheel, and when people log into your website for the first time, they can spin the wheel and get assurance to win... for us, it's either, like, a free eyelash, or a free mascara, or 10% off, or if you're really, really lucky, you'll get free shipping. You have to put in your email, first, before you spin, so there is a chance that you don't win anything, but most of the time you win at least a free gift or 10% coupon, which you can actually use when you purchase the box for the first time. It's a win/win for everyone.
Felix: Awesome. Any other apps or tools that you use, to run the business?
Bili: Yes. I think it's really important for brands to be transparent, so we have this great free app on the website called Customer... Let me just open it. It's called Products Reviews. Loyalty is really important, so we use Smile Rewards and Loyalty for our loyalty program. Every time a customer renews, buys a new box, they get points, and then they can redeem their discounts towards the next box. We use ReferralCandy for customers... for our influencers. We give our influencers a code, and they have their own dashboard where they can actually see the leads that they're generating to the website and who's converted, and we pay them automatically through PayPal. We use Pirate Ship to purchase our labels.
Bili: There are so many great apps on Shopify, and that's why it's honestly one of my favorite platforms, because it's so easy to build a platform with all these plug-ins and all these apps, and have an amazing store running smoothly.
Felix: Awesome, so tribebeautybox.com is the website. The last question to ask you is, what needs to happen for you this year, and for Tribe Beauty Box, for you to consider this year a success?
Bili: I think that for this year to be a success for us, we, obviously, have certain metrics that we need to hit, but I won't be sharing, on here, but the biggest thing is having a very smooth UK expansion, in terms of logistics. We're just about to start selling in the UK, so we'll have a UK website that charges customers in pounds. We've secured a fulfillment center in the UK, as well. So that's, honestly, one of our biggest focuses for this year, and we really do hope that we hit it out the park with that, as we did in the U.S., and it'll be a really great year for us.
Felix: Awesome. Thank you, so much, for your time, Bili.
Bili: No problem. Thank you, so much.