We are closing Secret Sex Box. After 15 months we decided to call it quits.

I would be dishonest to say that it’s been a great run. There are three main flaws to the business.
1. We didn’t think customers loved it. After a few months we doubt they are thrilled to get a new, inexpensive item every month. Within a year you end up with a nightstand full of stuff.
2. With a $19.95 budget (including shipping) we were limited in what we could send, so the quality of the items was lower than what we like to sell.
3. We weren’t making any money. We weren’t bleeding money either, but it was clear to us that profit and quality weren’t going to be friends in this business and that is a problem.

So, the business wasn’t loved, was low quality, and didn’t make any money. We are going to call it a dead-end.

It is no fun doing work that isn’t great and it is very hard to deliver a great box for $19.95 a month. Also, it is difficult to deliver something new and exciting month after month. The result was a subscription service that we aren’t proud of, so we are quitting.

Economically, the business wasn’t terrible, but it wasn’t great either. We think our box was worth slightly more than $19.95 a month, typically we felt the goods alone were worth $25. We were suspicious though that some customers might have felt that they were getting “$25 worth of stuff they didn’t ask for”. Our company was making about $5 a box in gross profit from long term subscribers, so there was a very small amount of money there. Most of that money was offset by some type of promotion.

Initially we gave customers a $5 trial month, so that trial cost us $15 to send, so if a customer stayed around for 3 months we were working for free. If they lasted longer, we could make a little bit of money. After over a year, our average person was staying for 3.2 months. So we were sending out hundreds of packages and getting paid less than a dollar a box to do so. Ouch! Then thinks got worse.

In August of 2013 a blogger decided to tell the world that they could sign up for our service and then cancel the next day and get a box of sex toys for $5 including shipping. It was the last straw. Over 200 people signed up and then immediately canceled. We had to jump through hoops to get the inventory to send out these new subscribers’ boxes knowing that none of them had any intention on continuing. It was exhausting and demotivating, a feeling we weren’t used to.

Our other websites like
Vibrators.com, RomanticGifts.com, and ShopInPrivate.com operate on a more traditional model. People order what they want, and we privately and quickly ship it to them. They are well-liked, successful and fun to operate. In hindsight I’m not sure why we tried to mess with that.