So with a few exceptions, these boxes are giving you around $50 worth of product for less than $20 a month (shipping included). How can these services make any kind of profit?
In short, it's because they typically aren't paying anything for the products that go into the box. There's a reason these are frequently referred to as "sample boxes" -- even when the products inside are full-sized, the vendors are happy to give them away as a promotion. It's the same principle as the sample table at your grocery store, except with a national distribution network: A vitamin brand is happy to give away thousands of pills at a loss if it knows that thousands of consumers will be trying them for the first time and potentially becoming regular customers.
"The business model is very similar [for every service]," says Bashkin, of KLUTCHclub. "They want to be in the box for exposure."
That's especially true of smaller brands.
"It's a way for our partners who sell on our site to get in front of a much bigger audience," says Zucker. "Most of our brands are not P&G-sized brands. They're very concerned with [return-on-investment] on these."
It's a win-win-win: Brands get mass exposure, the sample-box company gets to sell subscriptions with huge operating margins, and consumers get to try a bunch of products without paying much money.