Episode 31: Overcoming the Unique Challenges of Fashion Subscriptions with Avi Zolty

Online sales in the fashion industry can be tough. Even more challenging is online subscription sales in the fashion industry. 

On this episode of the Subscriptions: Scaled podcast host Nick Fredrick of Rebar Technology is joined by Avi Zolty, Founder of EarFleek—a subscription fashion earring platform. Avi shares his journey through involvement in several previous startups, his unconventional approaches to customer engagement and acquisition, and how his company is completely data driven—an uncommon way to approach fashion sales. 

What is EarFleek?

EarFleek is a fashion subscription service that sends its customers a pair of fun and trendy earrings every month. Its $13+ MSRP earrings are hypoallergenic and a subscription runs at just $3.49 a month, making it one of the most affordable subscription fashion boxes in the industry.

From the initial sign-up, EarFleek gives customers a choice from four personality subscription options to ensure that they get earrings each month that are in line with their personal style. 

In addition, the company uses a fun and innovative approach to further drill down to the styles each customer likes and dislikes—the Swipe game, which is based on the popular dating app, Tinder. Customers are shown photos of earrings and they swipe left for dislike and swipe right for those that appeal to them. 

EarFleeks´ algorithms take over from there, and the results are happy customers who receive earrings matched to their taste, and a much higher than average customer retention rate for the company.

Driving Sales Through Facebook

From the beginning, EarFleek has used Facebook to drive most of its sales. Facebook offered the perfect platform for Avi’s vision—a very low-priced subscription box with a high conversion rate, meaning more people than average are trying out the products. Follow that up with exceptional product quality for the cost, and churn is extremely low. 

Avi admits that Facebook isn’t the only platform that is suited for his business model, it just happens to be the one he started with. He has his eye on the big opportunities presented by video platforms like TikTok and YouTube, but so far it has been easier to focus on Facebook, where the cost and time involved in video production are not required. 

The Price is Right

If $3.49 per month seems inexpensive for a subscription box, that’s because it is. EarFleek has tested some higher end, more expensive options, but the company keeps coming back to its focus of choosing one thing to do, and doing it exceptionally well. 

As Avi says, if EarFleek wanted to sell high-end jewelry, it would create those types of boxes, but that is not its focus. It wants to mass market super affordable earrings, and to do that it needs to keep its focus on being the best at selling those products and giving its customers the best buying experiences. 

Data and Automation

EarFleek runs its business on data collection, data analysis, and using that data to develop procedures and processes that create efficiencies in all aspects of the business. 

As Avi puts it, “We’re 100% data driven. I know those are naughty words to say for a fashion company. We don't have any employees but we handle about 17,000 units every month. Because data drives everything. It drives how we acquire customers, it drives how we place orders, it drives how we optimize, how we monitor things like damage rates, and how that correlates with the products we send. 

“It drives how we market the product. It drives how we engage with the customers, and it drives our completely automated logistics that are heavily based on where customers are and how we can ship them the product.” 

EarFleek has tried having both employees and partners in the past, but over time the company has come to rely more and more on software. For its specific business model, it makes sense. It is trying to get as many subscribers as it can with the lowest possible amount of churn, and do it at a very low price. The only way to be successful with this approach is to cut costs wherever possible, and a key way for EarFleek to cut costs is to automate as much as possible through software. 

Maintain Focus

One big lesson Avi has learned through his entrepreneurial journey is to maintain a laser focus on the mission of the company, even when it sometimes feels like you are leaving opportunities and revenue on the table. Losing focus can mean starting to scale prematurely, and that can lead to exponentially increasing complexities.

An example of what he calls cascading complexities happened a few years ago when Avi and his co-founder began to support several initiatives that weren’t part of the core vision, including international shipping and accessories for handbags. 

What they found was that those additions created additional cash flow, but it wasn’t enough to justify the distractions that those new complexities threw into the way of the core subscription model. They got rid of all those distractions in order to maintain focus on what they knew was important.

Solve Your Own Problem

Avi’s initial steps into entrepreneurship came along with the help of Y Combinator. And through his time with them, he has developed a strong ability to determine whether or not an idea is right for starting a business. 

It starts with solving your own problem.

As he puts it, most everyday entrepreneurs are faced with two different kinds of ideas to base a business on, bad ideas that sound like good ideas, and good ideas that sound like bad ideas. And he says that even though it may sound counterintuitive, a good entrepreneur will look for ideas that sound like bad ideas. 

Those ideas are most likely to be ideas that address a problem that nobody has come up with a solution for. In most cases, that means that an entrepreneur is coming up with a way to solve his or her own problem. 

If you are solving a problem that you have, there's a high chance that others have the same problem, and they could become users or customers of your solution. As Avi says, it is a pragmatic approach that is much more likely to result in success than building something like the x of y, or the Doordash of cat sitting. 

If you can take that pragmatic approach, if you can identify your problem, then you can raise money to solve the problem. Cash is king and nothing else matters unless you have the backing to build something that creates users who will pay to solve the same problem.

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