3 Biggest Failed Subscription Boxes and What Went Wrong

I analyzed three well-funded subscription box companies to uncover the reasons for their failure.

Learn the biggest mistakes that led to the downfall of these subscription box businesses. I’ll also discuss my strategies to succeed with the subscription business model and share a free price calculator tool.

3 Failed Subscription Boxes in the United States: What Went Wrong?

A subscription box is a business model where consumers pay for the regular delivery of products.

The biggest failed subscription box businesses include Juicero, Loot Crate, and Julep Maven. 

Despite raising millions of dollars in funding, these companies couldn’t survive in the cutthroat subscription box industry.

1. Juicero

Juicero was a promising startup offering Wi-Fi-enabled juicing machines and a monthly juice pack subscription.

It was promoted as ‘the first at-home cold-pressed juicing system’ but later shut down after people discovered its glaring faults.

What Went Wrong

• An overhyped and over-engineered product with no real value
• Bloomberg revealed people could squeeze the pre-packed juice bags just as efficiently by hand, causing public backlash. Who knew people’s hands are pretty good at squeezing things?
• The $400 price point (initially $700) for a juicer, plus the required $5 to $8 monthly subscription, was too expensive compared to alternatives.

Key Takeaway: Juicero’s failure emphasizes the importance of introducing a product your target audience truly wants or needs. Don’t overcomplicate your product. Offer clear value and reasonable pricing to attract and retain customers. (And maybe don’t try to reinvent the squeeze.)

2. Loot Crate

Loot Crate became popular with its “comic-con in a box” catered to geeks and gamers.

While the company rapidly gained over 200,000 subscribers worldwide within two years of operation, it filed for bankruptcy in 2019 and was sold to Money Chest LLC.

Today, Loot Crate operates under The Loot Company.

What Went Wrong

• Deteriorating quality of products and repetitive items, causing disappointment and loss of excitement (Turns out, there are only so many Funko Pops a person needs.)
• Poor customer service, especially with shipping delay problems
• High operational costs from fast expansion

Key Takeaway: Building strong customer loyalty is a must for long-term success. Keep your consumers happy with consistent quality and a smooth overall experience, from order placement to delivery. And don’t promise more loot than you can crate!

3. Julep Maven

Julep Maven was a well-loved subscription service that delivered personalized boxes of nail polish, makeup, and beauty products.

A new firm acquired Julep in 2016 and filed for bankruptcy after two years. 

The new owner, AS Beauty, abruptly shut down the beauty subscription program.

What Went Wrong

• Mismanagement after being acquired by its parent company. Talk about a bad makeover!
• Tough competition in a crowded beauty market
• Numerous complaints, mostly related to shipping errors

Key Takeaway: Julep Maven’s downfall highlights the risks of poor management after an acquisition, especially in competitive markets like beauty and cosmetics. It’s important to ensure smooth transitions and maintain efficient operations, like quickly resolving shipping errors, to strengthen brand reputation.

How to Build a Successful Subscription Box Brand

While a subscription box business model offers a steady, predictable income, statistics show that over 40% of subscription box businesses fail in the first year.

What’s more, 50% of consumers cancel their subscriptions in the first six months because of delivery issues and poor product quality, making retention a huge challenge for subscription box companies.

Follow my strategies to succeed in running a subscription box business:

• Target niche products. Competition is intense as subscription markets have become oversaturated. Offer something unique to stand out and drive excitement.
• Prioritize quality. Some of the best publicly traded subscription box companies, such as Blue Apron, Stitch Fix, BirchBox, and Chewy, have a solid reputation for consistently providing top-notch products that meet customer expectations.
• Offer multiple subscription plans and payment methods. For example, Amazon provides premium memberships with discounts and free delivery to build loyalty.
• Ensure the subscription process is smooth from start to finish. Your website should provide a user-friendly interface, making it easy for visitors to complete their subscriptions without confusion. Have an experienced website design agency build a professional website that effectively showcases your subscription offers.
• Provide occasional discounts and extra perks to satisfy existing subscribers while attracting new audiences. Everybody loves a good surprise, unless it’s another Funko Pop.
• Take advantage of social media marketing to widen your reach. Encourage website visitors to follow your social pages to build lasting relationships with them.
• Personalize your products or services to boost subscription box conversion rates. Curated boxes are great as they allow consumers to customize the contents based on their preferences.
• Optimize logistics and supply chain to maintain product quality and ensure timely delivery, keeping your subscribers happy. Entice customers with free or low subscription box shipping costs (mostly absorbed into your subscription fees). Because nothing says ‘I value you’ more than not charging $15 to ship a $20 box.

What’s the Average Cost to Start a Subscription Box Business?

Starting a subscription box involves product, packaging, fulfillment, technology, and advertising costs.

Aim for a 30% to 60% subscription box profit margin to cover costs and earn a profit. 

Your ideal profit margin depends on your niche, product cost, and subscription levels. 

Here are sample business cost estimates:

Type of Subscription Box Business	General Average Startup Costs
Basic, home-based business	$10,000 to $20,000
Mid-scale	$30,000 to $60,000
High-end	$70,000 to $150,000

Once you’ve created a well-researched business plan, determine an accessible price point that fits your target market and revenue goals.

Use my subscription box calculator below to estimate your subscription box pricing:

Learn From the Past, Succeed in the Future

Whether you plan to start your subscription box business in the streaming, e-commerce, pet care, or health niche, remember to deliver real, consistent value and find ways to keep your subscribers engaged.

After all, you don’t want your business to become another ‘unsubscribe’ story.

Learn from the critical mistakes of failed subscription boxes. 

Apply my tips and strategies above to achieve sustainable growth and position your business for lasting success.

Remember, in the world of subscription boxes, it’s not just about thinking outside the box—it’s about creating a box worth opening month after month.