FabFitFun Business Model | How FabFitFun Makes Money?

FabFitFun is an online subscription box service that sends quarterly boxes filled with electronics, cosmetics, fitness, health, and fashion items. 

It began as a simple website in 2010 and grew in popularity, eventually adopting a similar subscription-based strategy to Birchbox. It now earns money by selling memberships and sponsoring brands.

FabFitFun business model is based on a subscription service, offering two plans based on how frequently customers wish to pay. 

FabFitFun is an online subscription box service that sends quarterly boxes filled with cosmetics, electronics, fitness, fashion, and health categories.

Daniel and Michael Broukhim, as well as Katie Echevarria Rosen Kitchens, launched the company in 2010. 

FabFitFun began as a website dedicated to female-oriented material, complete with a newsletter and offers area.

The network grew to 200,000 subscribers after a round of funding of $3.5 million in 2016. The FabFitFun brand grew by partnering with brands and influencers and helping to foster a strong community.

What Is FabFitFun?

FabFitFun is an online membership service that provides quarterly boxes filled with primarily female products. Electronics, beauty, and fashion are just a few of the product categories.

FabFitFun earns money through subscription boxes, styling fees for clothes boxes, and advertising for other businesses and goods.

FabFitFun Business Model

FabFitFun was founded in 2010 as a website focused on female-related content. The company’s founders started by selling subscription boxes in 2013, which earned them over $200 in income in 2018.

Company NameFabFitFun
Company TypePrivate
FoundersKatie Ann Rosen Kitchens, Michael Broukhim, Daniel Broukhim
Producthttp://www.fabfitfun.com
Founded Date2010
HeadquarterLos Angeles, California, United States

How Does FabFitFun Work?

FabFitFun is an online membership service that provides quarterly boxes containing eight products to its users. Products may fall under various categories, including home & lifestyle, fashion, and beauty cosmetics.

Members can subscribe to a seasonal or annual plan. When it comes to the former, they mail out one package every year, while the latter sends out four.

Members may also choose to personalize portions of their box by specifying which goods they would like to receive, depending on the plan selected.

Additional benefits of membership in FabFitFun include the following:

  • FabFitFun TV gives users access to cooking, exercise, and do-it-yourself films.
  • FabFitFun community access.
  • Social media outlets of the company distribute lifestyle content daily.
  • You’ll have the option of saving 30% to 70% on member-only sales.

FabFitFun can be accessed via its website, Android and iOS mobile applications, and social media platforms.

How Does FabFitFun Make Money?

FabFitFun earns money through memberships, styling service fees, and paid collaborations with other firms looking to advertise in the box.

We will examine each revenue stream in more detail below.

Subscription Fees

FabFitFun’s revenue predominantly comes from its monthly or annual subscription fees.

A subscription to the seasonal box costs $49.99, and an annual subscription costs $179.99. are eligible for. The packages will retail for more than $200 each, according to FabFitFun.

The subscription box provides exclusive content. Users also receive exclusive products. You can also find FabFitFun TV, its Shop (where users can buy products at heavily discounted prices), and special promotions on the site.

The annual plan also offers several additional benefits, including the ability to customize portions of the box, early access to customization, and a window for early shopping for Add-Ons.

Additionally, the company has expanded its subscription box into the retail realm. FabFitFun hosted a two-day pop-up store in downtown Los Angeles in 2018 to promote the debut of its newest box. 

This contributes to the company’s ability to improve customer relationships and increase consumer loyalty.

Brand Sponsorships

FabFitFun purchases most of the things in its boxes and partners with manufacturers looking to promote their products through the box.

The companies provide FabFitFun with cheap (or even free) products in exchange for exposure. They are also compensated for FabFitFun’s efforts in promoting these products.

As FabFitFun co-founder Broukhim explained, a large portion of the company’s revenue is generated through sponsored brand collaborations.

The primary benefit for customers is discovering new products they would not otherwise have known about.

Style Service Fee

FabFitFun Style is a unique styling service available to members only. Members complete a quiz in which they indicate their preferred styles, sizes, and body shapes.

Following that, a box comprising five items of clothes will be mailed to the member’s address. The member may then choose which items to retain. Members who keep all five products will receive a 25% discount on the box’s MSRP.

FabFitFun Business Model

FabFitFun earns money by profiting from apparel and charging a $20 styling fee for developing clothing ideas. This covers the expense of the designer, who selects attire for each member individually.

Stitch Fix, a pioneer of this strategy, that FabFitFun battles with for market share in the style space. 

Stitch Fix generates styling suggestions through a combination of computers and human feedback. 

While FabFitFun caters mostly to female customers, Stitch Fix also offers apparel recommendations for men and children.

What are The Funding, Valuation & Revenue of FabFitFun?

Crunchbase reports that FabFitFun has raised $83.5 million in venture capital funding over two rounds. 

Venture Capital firms like 500 Startups, Anthem Venture Partners, New Enterprise Associates, Kleiner Perkins, and Upfront Ventures are notable investors.

There have never been any public disclosures about valuations. FabFitFun earned over $200 million in revenue in 2018.

Success Story of FabFitBun

FabFitFun was started in 2010 in Los Angeles by brothers Daniel and Michael Broukhim and Katie Rosen Kitchens.

The Broukhim brothers are initially from a legal and political science background, having completed their undergraduate studies at the University of California, Berkeley (Daniel) and Harvard (Alexander) (Michael).

Following graduation, both brothers opted to pursue a legal degree. However, this was intended to serve as a safety net as they expanded their digital marketing agency Charlie, founded in 2007.

Charles’ first customer was Rudy Giuliani, then running for president as the mayor of New York. 

Michael, collaborating with a college classmate on the project, managed Giuliani’s digital media strategy.

On the other hand, Michael had always intended to return to California, where he and his brother were raised. On one of his return journeys, he met with someone who stated:

“Politics is Hollywood for the unattractive. If you can do this for politicians, you can certainly do it for celebrities and other members of the entertainment industry.”

After creating the website for Rachel Zoe, he was introduced through mutual friends to the celebrity stylist. 

Shopee Business Model

Zoe was quickly followed by many more clients, including Samuel L. Jackson, the Golden Globes, and Tumblr.

The Broukhim brothers (together with Katie Ann Rosen) founded FabFitFun as a side project in 2010 to diversify away from client work (which can be extremely unpredictable) and experiment with different digital media platforms.

FabFitFun began as a website dedicated to female-centric content. A collaborative effort between Giuliana Rancic, host of E!, and the company created the site. Among other things, it had a blog, a newsletter, and a bargains section.

To make ends meet, the Broukhim brothers maintained a laser-like focus on their agency. However, as FabFitFun increased in popularity, more of their attention was required to manage the site.

After three years of constantly releasing material, the founders desired to test a new business model. 

Subscription boxes (such as Birchbox) were exploding at the time, with entrepreneurs investing hundreds of millions of dollars.

This niche of e-commerce was quickly developing, and FabFitFun sought to capitalize on it. 

To validate the concept, they constructed approximately 2,000 boxes and promoted them to the site’s visitors. They began selling the boxes in March 2013 and sold out in less than two days.

This trial provided the founders of FabFitFun with the confidence they required to pursue the business full-time. 

Within the next two years, box sales increased by more than 300 percent annually. This expansion brought the company to the attention of venture capital investors.

The company raised venture capital from Upfront Ventures and New Enterprise Associates to $3.5 million. 

A year later, in the fall of 2016, FabFitFun had topped 200,000 subscribers, and its website was being visited over 3 million times per month.

While other subscription box providers began to fail, FabFitFun maintained its growth streak despite not catering to a specific user group (the company’s box comprises everything from perfume to headphones).

It occurred for a variety of reasons. To begin, the organization recognized the critical nature of community building through content. 

Mint Business Model

The videos, which ranged from cooking workshops to fitness instructions, compelled its largely female user base to return every day, which aided in developing brand loyalty and awareness.

Second, FabFitFun established its brand early on through collaborations with influencers in the segments it targeted. 

The brand has collaborated with over 20,000 influencers throughout the years, including Khloe Kardashian and Venus Williams.

Third, FabFitFun established several relationships with brands across every possible industry, significantly expanding their reach. 

For instance, in 2017, the company collaborated with MTV to create a branded box to commemorate the MTV Video Music Awards.

Today, FabFitFun offers its boxes to over a million subscribers throughout the United States and the United Kingdom (it expanded into 2019). 

Today, the company employs over 500 employees and has offices in Los Angeles, Chino (California), and Dublin.

Key Takeaways From FabFitBun Business Model

FabFitFun is an online subscription box service based in the United States that offers beauty, cosmetics, health, fitness, and technology products. Initially, the service operated as a content website focused on female-oriented advice and bargains.

Wix Business Model

FabFitFun earns money through a subscription service, giving two subscription levels based on the frequency with which the user wants to pay. Additionally, the company charges for a customized style service based on data from user questionnaires.

FabFitFun collaborates with brands to assemble products for its boxes. A brand may provide free products in exchange for more visibility. Additionally, the company also charges them for advertising.

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