Small Business: Home delivery by subscription - Lizzi Hines, Shave Union

Lizzi Hines, founder of Shave Union.

This week, small business editor Caitlin Sykes talks to business owners about home delivery by subscription.

Lizzi Hines is the founder of Shave Union, a subscription business that home delivers razors.

When and how did you come up with the idea for Shave Union?

I came up with the idea about 18 months ago, but then doing research on suppliers and testing products took a further nine months before we launched the brand. I'd seen Dollar Shave Club in the US, which does the same sort of thing - subscription razors sent to your home - and I liked the business model around the whole convenience factor.

Also, I have five brothers, two fathers, a husband and a son and I wanted a vehicle to bring awareness to men's issues. Ten percent of all our sales go to what we call the Shave Union bank; Shave Union members can nominate an ordinary guy who could use some money for a good cause and a panel then chooses recipients of those funds.

What kind of customer base have you built so far?

We've got a couple of hundred subscribers and we've been profitable from early on, so we're pretty happy with that. But I'd say it's been a slow burn. Dollar Shave Club offers three products but we wanted to start here with one, and then get feedback from customers about what we'd offer next before doing a harder push into the market. It is a low-margin item, though, so we have to be pretty careful with our marketing spend.

What channels have you found have worked for getting your message out to consumers when you're on a small budget?

We've focused mainly on social media. Instagram in particular has worked for us, which is interesting. Obviously we initially thought our target market was men, but it's actually been a 50/50 split. Although the brand is male-focused, women seem to quite like it and what it supports - I guess for the same reasons I do.

We've also had high conversion rates from radio advertising. I would have thought converting someone from radio to an online business would be hard because often you're listening to the radio in the car where the two mediums are quite disconnected. But we gave it a go and have had good success.

What's been challenging about setting up a business like this?

Certainly trying to get the e-commerce side of it running smoothly initially was a nightmare with a subscription model. One-off transactions are easy to set up, but we had to try a number of solutions early on to make sure managing regular subscriptions was simple and smooth for customers. When we've set up websites for a number of my other businesses in the past, we've led with 'what is it going to look like?' and then focused on the back end later. With a business like this there are three areas that need to come together smoothly in a transaction - courier, despatch, and e-commerce - but we didn't focus on that back end first, and we should have.

I still feel now that we learn something new every couple of weeks. We were about six weeks into the business, for example, when we had a package returned due to an incorrect address. It looked horrendous, and that gave us an insight into the condition our packages could arrive in. We'd done test deliveries to ourselves, which had all arrived perfectly, but after that insight we quickly came up with another solution that means products arrive in a much stiffer box.

The feedback process is also really important in these kinds of businesses. A lot of the other businesses I've set up are service based, where I think it's easier to get feedback than with a product based business. A business can live or die based on the feedback it gets so coming up with a model that gives us the most honest feedback we can gather is what we're working on now.