Direct Subscription
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Part of the joy and fun of having your own business is being able to take it in any direction you want to go.
It is one of the reasons why Stuart at Kako Chocolate continues to innovate. He is a creative chocolatier that makes beautiful and tasty treats. Stuart is always experimenting with new flavours, colours, ingredients and packaging.
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During the last few years, he also shared his knowledge freely with anyone prepared to attend his chocolate mastery classes in Auckland, New Zealand.
Like any artisan maker business, Stuart has to overcome the massive obstacle of getting his product to customers. It is a constant struggle to deliver an affordable product, and also have enough margin to continue to be in business. Typical options include retailing, wholesaling and markets. A key strategy is to sell directly to consumers to maintain higher margins. At the same time, the challenge is to keep overhead low to hold on to the hard-earned cash.
A store on the main street of a town or in a shopping mall makes it easy for customers to find you, but the rents and license fees can quickly make it unprofitable. The alternative is wholesale supply. The typical portion that would have gone to the landlord instead ends up as retail margin in someone else's pocket. That is why markets provide an attractive option for makers. It is a more economical way to sell directly to consumers. However, there is not a market every day.
Online sales is another and increasingly popular option that allows artisans to sell and supply directly to customers without expensive overheads. Shipping cost makes up a fraction of the expense of the sale, and it allows the artisan to keep his or her product affordable with more margin in their pockets.
However, the online world is an enormous place, and it is hard (and can be expensive) to get the attention of prospective customers and keep the awareness of existing ones. This is the single biggest obstacle to overcome. Most artisans do overcome it if their product is delicious, unique and good value and they invest their time and marketing budget carefully in curated and engaging promotional online content.
That is why the direct subscription model is becoming more and more popular particularly for artisans producing consumable products like chocolate, coffee, jams, jellies and more. The thinking is that a customer is likely to buy the product anyway, and the maker fills the anticipated need with a periodic (monthly or weekly) delivery of a favourite and something new, to keep the interest.
The subscription model is favoured over a simple once off sale because, while it may have been relatively easy to get the attention of an online customer once, it is becoming increasingly difficult to get attention and keep it regularly. Ideally, once a customer is engaged, it is better to retain it without the need to entice them frequently for another sale in a very noisy online market. Rather, keep an open channel with the customer through a captivating communication flow like a subscription.
This way everybody wins. The artisan has a steady commitment of customer orders and can plan production accordingly. He or she has the opportunity to make the product more affordable and earn more from it while building brand loyalty. The consumer has the convenience of online shopping and delivery, and one less thing to worry about in their busy schedules. In most cases, the products may even be more affordable and better quality than the store bought options. There is ample opportunity for the maker to innovate and experiment and get timely customer feedback on new products, flavours, preferences and tastes.
This is precisely where Stuart's latest innovation lands. More chocolate, different flavours, more margin, simplicity and great value for chocolate lovers through a My Chocolate Box subscription. All Stuart and his team's chocolate experiments and innovation delivered directly to consumers through a monthly chocolate subscription service.
Like any artisan maker business, Stuart has to overcome the massive obstacle of getting his product to customers. It is a constant struggle to deliver an affordable product, and also have enough margin to continue to be in business. Typical options include retailing, wholesaling and markets. A key strategy is to sell directly to consumers to maintain higher margins. At the same time, the challenge is to keep overhead low to hold on to the hard-earned cash.
A store on the main street of a town or in a shopping mall makes it easy for customers to find you, but the rents and license fees can quickly make it unprofitable. The alternative is wholesale supply. The typical portion that would have gone to the landlord instead ends up as retail margin in someone else's pocket. That is why markets provide an attractive option for makers. It is a more economical way to sell directly to consumers. However, there is not a market every day.
Online sales is another and increasingly popular option that allows artisans to sell and supply directly to customers without expensive overheads. Shipping cost makes up a fraction of the expense of the sale, and it allows the artisan to keep his or her product affordable with more margin in their pockets.
However, the online world is an enormous place, and it is hard (and can be expensive) to get the attention of prospective customers and keep the awareness of existing ones. This is the single biggest obstacle to overcome. Most artisans do overcome it if their product is delicious, unique and good value and they invest their time and marketing budget carefully in curated and engaging promotional online content.
That is why the direct subscription model is becoming more and more popular particularly for artisans producing consumable products like chocolate, coffee, jams, jellies and more. The thinking is that a customer is likely to buy the product anyway, and the maker fills the anticipated need with a periodic (monthly or weekly) delivery of a favourite and something new, to keep the interest.
The subscription model is favoured over a simple once off sale because, while it may have been relatively easy to get the attention of an online customer once, it is becoming increasingly difficult to get attention and keep it regularly. Ideally, once a customer is engaged, it is better to retain it without the need to entice them frequently for another sale in a very noisy online market. Rather, keep an open channel with the customer through a captivating communication flow like a subscription.
This way everybody wins. The artisan has a steady commitment of customer orders and can plan production accordingly. He or she has the opportunity to make the product more affordable and earn more from it while building brand loyalty. The consumer has the convenience of online shopping and delivery, and one less thing to worry about in their busy schedules. In most cases, the products may even be more affordable and better quality than the store bought options. There is ample opportunity for the maker to innovate and experiment and get timely customer feedback on new products, flavours, preferences and tastes.
This is precisely where Stuart's latest innovation lands. More chocolate, different flavours, more margin, simplicity and great value for chocolate lovers through a My Chocolate Box subscription. All Stuart and his team's chocolate experiments and innovation delivered directly to consumers through a monthly chocolate subscription service.
Observations
My Chocolate Box is a deliciously tasty new way for chocolate lovers to experience a better quality chocolate delivered directly to their door. Unfortunately, the chocolate subscription service is currently only available in New Zealand at the moment. However, if you are in the consumable artisan product business anywhere else in the world, you should pay attention.
Each month, a subscriber receives a chocolate box containing an assortment of gourmet New Zealand handmade Kako chocolate products. They promise not to use flash packaging, which in the chocolate business can sometimes cost more than the product itself. Instead, the subscriber gets more bang for their buck, with lots more product. Less cardboard and plastic. More chocolate!
Stuart's commitment to the new service is to get his subscribers the perfect balance of quantity and quality to wholly capture and keep their chocolate attention. His target for 2017 is to have 2,000 chocoholics enlisted. It sounds like a whole lot of fun and a great way to generate a huge amount of value all round for everyone involved (including the Dentist).
We congratulate Stuart on his newest innovation at Kako and will eagerly follow his journey as he makes his chocolate (prescription) subscription business a reality in New Zealand. Who knows, we may have some of it in Canada soon.
P.S. To become a Kako Chocoholic enlist here: https://www.sweetest.co.nz/my-chocolate-box/
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