Small Business

Birchbox Reshapes the Beauty Delivery Business

Redefining the Business of Beauty

You can say it's beauty by mail. In exchange for a subscription fee ranging form $10 to $20 a month, members of the hot beauty retailer Birchbox receive a curated box of luxury beauty samples every month.

When you're ready, you can buy full-sized products directly from Birchbox. There's also editorial content and social media wrapped around the products and how to use them.

"We're both a marketing partner and a retail partner," said Katia Beauchamp, one of the company's co-founders. She made the comments on CNBC's "Squawk" Monday.

And the company has branched out to male consumers. Birchbox for men launched in the spring and costs $20 a month. Birchbox for women runs $10 a month.

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Suppliers have been providing samples to Birchbox as a way to reach potential, long-term customers. Suppliers offer the samples as a marketing expense.

"Birchbox is actually the first way where they can track the ROI (return on investment) and and get those samples in somebody's hands in a targeted way," said co-founder Katia Beauchamp. "We're both a marketing partner and a retail partner," she said. (Read more: Amid 'Fiscal Cliff' Stalemate, Main Street Deteriorates)

The monthly box of customized samples range from skincare to fragrance. "We're a try, learn and buy business model," said co-founder Hayley Barna. "It's a complete 360 from discovery to purchase," she said. The duo met at Harvard Business School.

Birchbox's business model includes warehouses, stocked with inventory. Launched in 2010, Birchbox has more than 300,000 subscribers and is available in the US, the UK, France and Spain. The startup has received roughly $11.9 in venture funding.

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