It’s always tough to pinpoint the exact moment when an industry has grown too saturated, but we might already be there with the number of e-commerce companies that deliver boxes of goods to monthly subscribers.
You’ve probably heard of Birchbox (beauty products), Trunk Club (clothing), and Dollar Shave Club (razors). There are hundreds of others, offering everything from gluten-free snacks to dog toys to wine. There’s even a dirt of the month club, which sends people samples of “rare, gold-laden pay dirt from active and often famous working mines.”
As in any frothy sector, a reckoning is coming.
“There is no doubt in my mind that there will be a correction, a consolidation,” says Jalem Getz, founder and president of Milwaukee-based Wantable, which sells young women curated boxes of clothing, makeup, and fashion accessories.
The serial entrepreneur hopes his latest company isn’t one of the casualties. So far, so good: Wantable will more than double its 2014 sales this year, Getz says, and it has grown to 48 employees, up from 23 when we last wrote about the company in mid-2014. He declined to say if it’s profitable.
When the sector’s first wave of shutdowns hits, companies won’t fail because of what they’re selling in those boxes each month, Getz predicts, but because of how they sell them. He thinks the first to die out will be those with “nefarious subscription tactics.”
“These are the ones that won’t let you opt out unless you call—they say for security reasons. It’s absolutely not. It’s to create friction,” he says.
“Companies like that, to be honest, I just absolutely despise,” he continues. “I’m excited for all those companies to crash and burn.”
Getz says Wantable makes it easy for customers to unsubscribe from its monthly service with a single click, e-mail, or phone call. It also alerts customers before it charges their accounts or ships them products, he says.
Attention to detail and to customers’ needs is a constant theme for Wantable, Getz says. Another example: the company carries out every aspect of the business except shipping; it handles order fulfillment, customer service, and technology development in-house.
All of that has helped Wantable consistently ramp up its sales during the three-and-a-half years since Getz founded the company. The growth spurred Wantable to move to a bigger space in September, its third location. Wantable took over 16,000 square feet in an industrial building in the up-and-coming Walker’s Point neighborhood near downtown Milwaukee. The previously vacant building is at least a century old, and over the years it has housed a paint factory, a beer bottling operation, and an antique shop, Getz says.
Getz and company have turned the space into an employee haven fit for an e-commerce startup. There’s a bar for sipping on coffee or wine. A line of hammocks provide cozy shelter for a mid-afternoon break, or an impromptu meeting. Wantable also put in a runway that it uses for events and product photo shoots. “Someone mentioned, which is very flattering, that we’re kind of a Milwaukee Google,” Getz says, alluding to the type of hip, tricked-out headquarters often associated with Silicon Valley tech titans.
Wantable is clearly nowhere close to Google’s league in terms of size and societal impact, but it’s one of the more notable startups in Milwaukee’s small tech community right now. And Getz is happy with the trajectory thus far. He says Wantable is growing faster than his best-known company, BuySeasons, did in its first three years. He co-founded that online retailer and distributor of costumes and party supplies in 1999, helped grow it to $170 million in annual revenue, and sold it in 2006 for an undisclosed sum.
Besides growing revenue and staff, Wantable has expanded its products to five categories: makeup, fashion accessories, intimate apparel, fitness apparel, and—most recently—“style” clothing like dresses, jeans, and sweaters.
“We started out as more of a makeup brand three-and-a-half years ago,” Getz says. “We would definitely consider ourselves more a fashion company today.”
Next year, Wantable is less likely to add new products, and will instead try to “get better at the things we’re already doing,” Getz says.
Some of Wantable’s competitors (and e-commerce companies in general) have begun opening brick-and-mortar stores to complement their websites, reflecting how “everything in retail is a pendulum,” Getz says.
So, is his company considering opening a physical store? “I’m not disclosing that in this conversation,” Getz says.
Wantable has raised $2.3 million from investors and has no immediate plans to seek more outside capital, Getz says. “But if we decide to do something that is very capital intensive, then we may,” he adds.
