How to Start an Online Business: Bellabox

by Helen Hawkes
Posted: November 17, 2015

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Bellabox was among the first in Australia to send out beauty boxes on subscription. The complementary skills of the twin sisters who founded it have made it a runaway success.

 

What’s the big idea?

Each month, bellabox’s 40,000 subscribers pay A$17.95 and are posted a personalised beauty box filled with at least five samples from high-end boutique and cult brands. Customers can try out a sample and, if they like it, buy a full-sized product from the bellabox website.

The company began in 2011 and is growing by about 12 per cent a month. It now has 400 beauty brand partners including Lancôme, Clinique, Guerlain, Aveda, Jurlique and Terax haircare. It has also attracted A$7 million from investors including Allure Media, Square Peg Capital, serial entrepreneur Lance Kalish, Elevation Capital and Apex Capital Partners.

Bellabox boasts close to 100,000 Facebook followers, 22,000 Instagrammers, and was named in the Rising Stars section of the 2014 Deloitte Technology Fast 50.

How did it start?

Bellabox CEO Sarah Hamilton was working as general manager of Spin magazine in New York when her twin sister, Emily, approached her with a business proposition.

“Emily has a background in digital marketing and, in the United States, a company called Birchbox had just pioneered the idea of sample beauty boxes online,” says Sarah, 38.

(Started by two Harvard Business School graduates in 2010, Birchbox now has more than one million subscribers and annual revenue estimated to be between US$25 million and US$50 million.)

The skills to succeed

Previously Emily had co-founded Singapore-based mobile services company Teracomm, while Sarah had worked at influential fashion magazine Dazed & Confused in London before moving to New York to work at Spin.

“I have always focused on numbers but for fun companies,” Sarah explains.

That came in useful not just for the initial start-up – “we were self-funded for 18 months” – but also later when the pair was looking for investors and when Fairfax bought 50 per cent of the company.

Challenging the status quo

Initially Emily took on the digital responsibilities for the site and the sisters hired staff who had a background in beauty to build relationships with beauty companies.

“In Australia we did find that some companies were a little bit closed to new ideas,” says Sarah.

She believes the best thing about not coming from the beauty industry themselves was that she and Emily didn’t accept the status quo of “this is how it works in the beauty industry”.

“You think about how you can challenge that and how you can get a better result.”

While beauty companies have always done sampling, Sarah believes bellabox gives customers ownership – “they pay to receive products” – and the opportunity to have a box curated for their beauty profile.

In 2013, bellabox expanded its range to include luxury lifestyle treats such as LUXE City Guides and Parlux hair dryers.

The beauty box concept has now been embraced in Australia and spawned competitors for bellabox including Lust Have It!, which bought the Australian operations of US-based Glossybox, Her Fashion Box and marie claire magazine’s The Parcel.

Valuing the customer

Samples convert people into new customers, says Sarah, and it’s on this basis that bellabox has been able to do deals with beauty companies. In exchange for providing free samples, the beauty brand receives a basic marketing campaign.

“If they go from there, further costs are involved,” Sarah explains. “More and more there’s a paid element as we become more sophisticated in how we market to our customers.”

But bellabox is careful not to over-contact customers, nor does it sell its database to companies.

Global expansion

The founders of bellabox have always been keen for it to expand. “Australia is one feather in our cap,” says Sarah.

The digital service has just launched into China through a partnership with Australia Post’s online storefront platform on Tmall. Rather than its subscription product, bellabox will offer a range of themed beauty boxes.

“We are doing more on-demand boxes with beauty products from Australia,” says Sarah. “If we sell out of a [particular] box, that’s a good problem to have.”

Analysts predict the cosmetics market in China will become a US$113.9 billion industry by 2017, of which 25 per cent will come from online sales fuelled by “tech savvy millennials”.

Hands-on business

While Emily is based in Singapore, Sarah is in Melbourne, where bellabox maintains a warehouse.

“We have 20 to 30 staff in operations, marketing and brand. Because our customers are a very engaged community, it takes a lot of time to manage all those customers,” she says.

Her own role is mostly operational, although she would prefer it to be more about forward strategy for the business. Even though she has three children aged under three, Sarah is at the office between 9am and 6pm every day, and she has no intention of stepping away.

Special bellabox offer: $10 for your first box. Redeem here

Want to learn more about starting a business? Check out our guide to business careers

 

Remember, it’s not what you know but what you practice that makes you a great leader. Want to know what else makes a great leader?

 

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Helen Hawkes

Helen Hawkes

Is a lifestyle journalist, happiness coach and author who has written for major magazines and newspapers in Australia and the United Kingdom. She is also an avid follower of fashion although she currently lives in Byron Bay, where a hippy dress, sandals and floppy hat are considered the style of the day.

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