29 Dec 2010

Business Idea # 1 - Subscription Service for Hygiene Products

Everyone has probably had a business idea for a startup but didn't implement it. After seeing it implemented by someone else they think "Why didn't I follow through...". This happened to me a couple of weeks ago, and after seeing the recent XKCD comic I decided to write this blog post to be able to charge some money for it ;-)

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I had an idea this past summer that I really liked, but didn't follow through on and I recently saw that Amazon Germany implemented something similar and now offers subscription services for hygiene and other products as "Amazon Spar-Abo":

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The Idea

I don't really remember how I got the idea, but I liked it: I wanted to offer a subscription service for dental hygiene products. Dentists recommend to change toothbrushes every month/every other month (depending on who you ask), but usually people don't remember exactly when they started using their current toothbrush. The idea was to offer a monthly or bimonthly plan to send out a fresh toothbrush. This signals that it's time to change toothbrushes and automates the aspect of buying and changing toothbrushes. The shipping costs could be subsidized by sending out promotional material for private tooth insurances, just like Amazon does. The plans would be purchased for a full year ahead and would include a welcome package containing toothpaste etc. at the beginning of the first month.

Advantages and Disadvantages

The advantages of this idea would be the upfront payment for a whole year, which also makes this possible as a present, and the rare handling of sending out stuff (only at the end of a month). The obvious disadvantages of this idea are the really small margins as toothbrushes cost only a couple of Euros. Brand toothbrushes cost about 2,50 €, but you can buy cheaper store brands at discounters like Aldi. I guess that's why Amazon is also focused on higher priced products like electric toothbrushes. The target demographic for this business idea would be single, "young professionals" that want to automate this aspect of their life and are willing to pay for it. I don't think "soccer mums" with kids that go shopping once a week anyways would pay for this service. I have to admit though that I never invested enough in e.g. Google Ads to really research this.

The Competition

I also researched the competition and found Refresh your Smile. Refresh your smile also offers toothbrush subscriptions, but on a bi-monthly plan only. And obviously Amazon recently joined the game. They offer a wide range of hygiene products as subscription, the payment isn't upfront and they can use their already existing logistics infrastructure. The subscription idea can easily be extended to not only cover toothbrushes but also razor blades and other consumer items. This is also what Amazon does and myMuesli recently started offering orange subscriptions to produce home-made freshly pressed orange juice at http://www.oh-saft.de/. Another website is Manpacks, which offers subscriptions of underwear, shirts and socks for men. I think in the future we'll see more and more subscription services for physical goods as ecommerce gains even more market share. This perfectly fits more mobile and busier lifestyles.