Cloud Paper's co-founder Ryan Fritsch explains why a subscription model isn't a one-size-fits-all solution for DTC brands, despite its success for their bamboo toilet paper. This episode provides crucial insights for ecommerce operators to critically evaluate if a subscription offering truly aligns with their product and customer needs, or if it's merely following a trend.
Key takeaways
Carefully assess product suitability for subscriptions: Not all products are ideal for a subscription model. Only implement a subscription offering if it genuinely aligns with customer needs and product characteristics, like being a routine essential.
Leverage B2B partnerships as an acquisition channel: Explore using corporate customers (e.g., offices, hotels) as an initial acquisition strategy, especially if they are aligned with your brand's values and can help promote your product within their facilities.
Prioritize infrastructure for B2B expansion: If targeting enterprise-level B2B clients, invest upfront in warehouse capacity and logistics to ensure seamless onboarding and prevent delays.
Consider sustainability as a core differentiator: For commoditized products like toilet paper, a strong sustainability focus can create a significant competitive advantage and resonate with a growing segment of consumers.
Themes
b2b salesdtc strategysubscription business modelssustainable commerce
Cloud Paper is trying to get more people -- and businesses -- to try its products.
The company makes bamboo-based tree-free toilet paper. When it first launched in 2019, co-founder Ryan Fritsch said the goal was to grow via business-to-business partnerships by selling to businesses like corporate offices and hotels. Its first major account was a Seattle WeWork. But then the pandemic hit, and office buildings shut down. As a result, Cloud Paper had to pivot its business to be consumer-facing.
Two years later and the company is continuing to see year-over-year growth. But it's no longer a business focused solely on supplying toilet paper to other businesses. "Consumer sales are still driving the majority of our sales today," Fritsch said on the Modern Retail Podcast.
The idea behind Cloud Paper was to make an environmentally conscious toilet paper. "Toilet paper hasn't changed much for many, many decades -- and it hasn't changed much, especially in terms of sustainability," said Fritsch. "It's very much lagging behind other household goods." With this in mind, the company decided to use bamboo as its source since the plant is both abundant and renewable.
In addition, Cloud Paper decided that its consumer-facing business needed to be subscription-only when it first hit the market as a way to rope in repeat shoppers. The bet seems to be working out, even after the coronavirus-induced toilet paper mad dash. The company recorded a huge sales bump in 2020, but didn't see much churn after inventory leveled out. "We actually didn't see much change at all kind of once things got back to 'normal,'" Fritsch said.
But even though the subscription business is healthy, Fritsch is dubious of it as a one-size-fits-all model. He's seen many subscription companies come and go -- and it's usually because the product didn't fit with the business plan. "Everyone wants to launch a subscription box or a product on subscription," he said. "But it was our idea early on that most products out
Frequently asked about this episode
What does this episode say about b2b sales?
Carefully assess product suitability for subscriptions: Not all products are ideal for a subscription model. Only implement a subscription offering if it genuinely aligns with customer needs and product characteristics, like being a routine essential.
What does this episode say about dtc strategy?
Leverage B2B partnerships as an acquisition channel: Explore using corporate customers (e.g., offices, hotels) as an initial acquisition strategy, especially if they are aligned with your brand's values and can help promote your product within their facilities.
What does this episode say about subscription business models?
Prioritize infrastructure for B2B expansion: If targeting enterprise-level B2B clients, invest upfront in warehouse capacity and logistics to ensure seamless onboarding and prevent delays.
What does this episode say about sustainable commerce?
Consider sustainability as a core differentiator: For commoditized products like toilet paper, a strong sustainability focus can create a significant competitive advantage and resonate with a growing segment of consumers.
