How they did it: Sample boxes create high-margin revenue streams
One topic that turned heads at the 2024 Niche Media Summit’s round tables was the size of profits from old school sample boxes, sometimes called gift or subscription box, programs.
Advertisers can pay up to five figures to put a sample in a box that goes out to B2B purchases and total sales can run into the low to mid six-figures publishers said.
B2C publishers with high end brands are also selling directly to consumers and create an additional or premium subscription level.
What all the sample box programs have in common are product samples from advertisers, beautifully packaged and arriving separately from the magazine.
Included in this report:
* Use cases for B2B and B2C
* How it works
* How to price it
*Finding a fulfillment partner
Use cases: B2B
B2B magazines are selling sample boxes that are distributed to event attendees or mailed around the country to welcome new business start-ups.
Welcome to our event
Take Parking Today Media. Publisher,
Once a parking lot vendor, providing technology such as ticketing systems for the parking lot industry, he acquired the magazine in March, 2024, noting the strength of the $2 billion industry.
While he had no publishing experience, he had deep experience in industry, and ideas about what kind of promotions that vendors would be interested in.
One idea was placing welcome boxes inside hotel rooms of attendees of the Parking Industry Expo, their annual event.
Each item in the box is tied to – and paid for by – one of the event sponsors or advertisers. They can be personalized to a particular customer, “such as a bottle of bourbon.”
The list of who gets what goes to the hotel which delivers the gift boxes inside the guests’ rooms, in this case about a 200 room block. Vendors will pay five figures to participate.
The beauty of name-based hotel delivery, is that it can be tailored to to recipient, something that doesn’t work at scale for mailed box programs.
Another attendee of the 2024 Niche Media Summit, James Byles, president Washingtonian’s Custom Media, said he found a welcome box of samples in his car when he picked it up from the valet during a conference.
At least one person at the round table mentioned total sales in the low six figures from selling samples into event baskets.
Welcome new store owners
Events are not the only way to distribute welcome boxes, another choice is mailing them out.
In the case of Fresh Cup, an online magazine dedicated the coffee shop industry, publisher Garrett Oden, sends a sampler “Welcome box” to new coffee shop owners who opt-in from a page on the website. He estimates he can sign up around 2500 new shop owners a year.
The website promotion notes that there is no cost to the coffee shop owner who gets a Welcome Box, but they need to have opened a coffee shop in the past year, or will open in the next year. The cost to the magazine is minimal, the labor to assemble the boxes whether inhouse or through a third party, and postage. The advertisers pay for the rest, and generate a sizeable new revenue stream.
Oden said the program accounted for 10% of revenues in year one and an estimate of 20%+ in year two. A postcard with the a QR code for the advertiser’s product is included to help drive sales to the advertisers.
“It was inspired by by becoming a new parent with our first child. We were receiving boxes of samples,” he said. “It’s very fun.”
Use cases B2C
The Local Palate
For B2C media companies with high end brands, sample boxes also work well.
The Local Palate, which covers the food and culture of the South, is a great example.
Publisher Joe Spector, who had a background in retail merchandising at Target, launched The Local Palate, a vertical brand with a national B2C audience, 14 years ago.
He decided to go deep into the market with a variety of reader driven revenue streams, from paid subscriptions to an online store for culinary goods.
Gift Sample boxes sold directly to consumers are an extention of this marketplace.
“Since we are a media company we are in the fortunate situation that we can drive traffic to our website to sell products.”
In fact, everything the company does from telling stories to native ads, and recipes works to promote the store.
The boxes are imprinted with The Local Palate brand,” said Shannon Scheel, Senior Sales Representative at CJK Group’s Sheridan which fulfills the Gift Box program through CJK’s subsidiary, Continuum.
“Within that holiday box, Joe is going to have barbecue sauce from North Carolina. He’s going to have salt rub from, South Carolina,” Scheel said.
“It’s going to be a box that has kind of the best of the local ingredients,” Scheel said.
From Conde Nast to GQ
The idea to for gift basket sales is not new. Welcome baskets that are delivered to new homeowners have been around for decades.
Condé Nast was one of the first magazines to send boxes of samples to customers of iconic fashion brands, separately from the magazine’s delivery, that also had small samples inside.
What is new is how the model works to create online sales, support subscription sales, or create its own kind of subscription.
“Today I think the model is being really well done by GQ magazine,” said Scheel.
“I can go to the GQ website and sign up for their subscription box. The promotions on the website for a quarterly membership are elegant, promising trend-setting style brands.
There is a separate subscription fee for the box, in addition to what advertisers pay.
Scheel, who has been seen GQ winter boxes go out from one of CKJ’s fulfillment center, says each send is in the neighborhood of 75,000.
“They are not physically branding the product as GQ. They’re promoting to retailers who get the exposure, because they’re getting their product in front of a GQ reader.”
Pricing, packaging and fulfillment
The first decision is what type of packaging to use. It could be an outer bag, or if the items are breakable some sort of clamshell or corrugated box, Scheel said.
The second decision is how and where the packages will be shipped. If it’s an event, drop-shipping may be simpler and less expensive. On the other hand, mailing to event attendees or homes places the vendor outside the “clutter” of a large event, Scheel siad.
CJK’s Digital Lizard has its own fulfillment facility in New Jersey but also relationships with USPS facilities around the country in cities from Las Vegas to Idaho.
“In most cases our fulfillment center will ship via USPS, because that is typically the most economical, he said.
“The USPS give a rate based on the structure and the different postal zones.”
After the costs are known, “it’s time for the publishers to establish a pricing that makes sense,” Scheel said. If the merchants are paying to be in the box, price is often simply a derivative of the perceived value.
At the high end, pricing ranges NPB has seen run up to $5000 per sample for a B2B box that goes to executives with massive corporate purchasing power. A consumer-paid holiday gift box, on the other hand, may be in the range of $75 to 150. GQ sells its quarterly gift box subscription for $186 a year.
Any product with reoccurring revenues – say a type of razor sold as a monthly subscription, or a type of coffee that could be ordered on a frequency plan – has a bigger incentive.
Scheel said the key to keeping costs under control for mailed subscription boxes is consistency.
“Put the same thing in every boxes, and you will always know the rate and your margin.”
He can be contacted for more information at Shannon.Scheel@Sheridan.com or 703-622-9371.
Stay tuned – NPB will also host a roundtable with publishers who have – and those who want to – run a sample box program.
