Luxury Commerce Site Svbscription Ups the Ante on the "Stuff in a Box" Trend

By Erin Griffith , written on May 30, 2012

From The News Desk

Subscription commerce is one of those things: A new one crops up every week, and, if coverage in glossy magazines is any indication, consumers love it. But investors, as we noted a few weeks ago, are wary.

That hasn't stopped Svbscription, a luxury subscription site for men, from launching today. The company believes it has a take on the trend that addresses many of the concerns sub-comm haters (myself included) have expressed.

The site charges an unheard of $300 per quarter for its package of exclusive, upscale goods. CEO Andrew Apostola tells me the model has been compared to Visionaire magazine, which subscribers shell out something like $500 per year for two issues.

The idea is that, because of their low price points, other subscription goods sites aren't able to provide much beyond swag, samples, and not-that-valuable junk. "You can't give someone something great for $20," Apostola says. The $300 per quarter price point is comparable to the cost of a gym membership. In the way that a gym membership might help a person improve their body, Svbscription is aimed at improving a person's taste, he says. Svbscription boxes will include five or six high value items in the tech, apparel, grooming, and content categories.

Svbscription is (obviously) targeting the super-high end gift market. The items are sourced directly through designers and brands, so the company gets them at cost and can provide $400 to $600 worth of value in the $300 box. "We know it's not for everyone, but it's for the person who wants something they know they can't find anywhere else." Apostola says. Svbscription will win or lose on the quality of its goods, he added.

Hard-to-find commodities like a Nike Fuel band just after its release, or a hot new book from Penguin Publishing that has yet to hit the market are some examples of items Svbscription might feature. Upper and mid-tier boutique brands that haven't managed to cut through the marketing noise are interested in releasing new items through Svbscription, and larger brands like the idea of a unique channel for their product launches. Apostola's partners come from the editorial and luxury goods sourcing worlds.

Of course, ecommerce isn’t an easy business to be in. The subscription model doesn’t suddenly lead to magical, never-ending guaranteed streams of revenue, as we learned when ShoeDazzle, the largest and oldest subscription commerce company, dropped its subscription model.

Apostola is aware of that; he is in the process of selling an Australia-based subscription ecommerce site he launched three years ago. It never really broke out beyond the $1.5 million revenue mark, but the company gave him the technical understanding of customer acquisition costs and churn expectations. That site was a project that came out of Portable, the agency he co-founded, which produced skunkworks projects like Portable.TV.

Svbcription is in the process of raising venture capital from New York investors, who asked the same critical questions many have lobbed at any new subscription commerce business: Can it scale? How much will customer acquisition cost? What will your churn be?

Apostola's answers: With new categories such as women's, hopefully not too much with positive press coverage and a slow roll-out, and 25 to 30 percent.

They also ask about that name. The company has purchased, but the "v" in subscription might also help with SEO. Apostola said he discussed whether the "v" in Svpply was a sticking point with Zach Klein, who said it hadn't negatively affected the company.

There's no gaurantee it will work, which Apostola readily admits. In the same way that Birchbox found success with the recent limited release of men's subscription product, the company is starting small with limited amounts of boxes, with just 100 parcels going out. Next quarter it will do a few thousand, and next year it will send out 10,000.