On the company website, Birchbox is labeled the leading discovery commerce platform. Founded by Hayley Barna and
Question:
On the company website, Birchbox is labeled the leading discovery commerce platform." Founded by Hayley Barna and Katia Beauchamp, the company is an e-commerce venture specializing in beauty, grooming, and lifestyle products, with a subscription-based marketing strategy. Each month, subscribers receive samples in a mix of categories, determined by a profile that subscribers complete. Birchbox lists their business partners on a brand page on their website. If subscribers like the products they sample, they can then purchase more through Birchbox. The company has a point system that enables subscribers to enjoy discounts and other benefits. As one subscriber expressed it, "They send products I wouldn't necessarily spend money on, but once I get them, I realize I really like them."
1. What risks are Barna and Beauchamp taking by giving away samples every month?
2. If you owned a beauty product company, would you partner with Birchbox to market your products? Why or why not?
3. What questions would you want to ask Birchbox before signing up to pay the subscription fee?
Step by Step Answer:
Fundamentals of Corporate Finance
ISBN: 978-0321818171
2nd Canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford