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December 24, 2012

BabbaBox: Helping You Spend More Time With The Kids

Too little time to spend with the kids? Not able to plan activities with them because it takes a lot of research and preparation? Well the team at BabbaBox has a solution for that.

Why We Like This Business?
It fills a need: One of the areas that parents are most concerned about is the development of their child in the early ages. Many parents are working and are unable to be part of that development. Either they hand it over to someone else, or stress themselves out trying to make it work.

So BabbaBox’s premise is that they will provide you with educational activities monthly so that all you need to do, is to join in the fun.

Tapping on the rising trend of Subscription commerce businesses, they are able to cater to the needs of the busy parents who would like to get rid of the hassles of research and preparation to focus on spending time with their kids, doing interesting things.

So How Could We Make this Bigger?
Well, if you look at the current Asian markets, there are a lot of countries where parents would want such a service, especially in the more developed cities. BabbaBox costs US$29/month with free delivery to the US. Sending it overseas would be difficult. Also they cater to a certain age group, which are the 3-6 year olds.

So there could be 2 ways to expand this business from what we see.

  1. By the numbers
    You could partner up with the company to get them to allow you to produce and pack in Asia. Offering them a way to expand outside the United States.The main 2 costs they face would be:
    1) Manufacturing and Packaging and,
    2) Shipping which would deter many customers.

    So perhaps we could have a manufacturing/packaging office outside of the US that would help them cater to other markets, by expanding their business, whilst still offering the same pricing.

  2. By Expanding the Target Market
    Currently companies that are in the same business (Educational Subscription Boxes) are targeting pretty much the same age group (3-6 year olds). Even though that age group is pretty big and strong, there are other variations of this business that can be done.
    1) DIY Hobbyists Market:to teach people how to build gadgets, electronics. Think along the lines of a project a month from Maker Magazine. This could be expanded to other hobbyist groups like, art, photography, engineering, jewelry making, baking, cooking etc.2) Religious Market: To help parents teach religion to their kids via activities that would help them engage more.

    3) Other Age groups: Tapping on the educational development, activities could be made to cater to children in the lower Primary or even for subjects in the later years.

Looking at the numbers
By selling at $30/box per month, if you could hit 10,000 subscribers a year that would be revenue of around $2.4 Million a year. Which makes it a very feasible business to do.

Looking at costs, you could expect to spend around $10-13 per box (on the high side). Which would still give you a sizable margin to play with.

There is a huge change coming in the education industry. New methods are being introduced to teach (Khan Academy) and the roles of teachers are changing to facilitators. Parents are looking at ways to enhance their childrens’ skills and to find more ways to enrich their childhood. Which makes is a very good industry to look into, as there are more willing and able customers in the market that would test out new products.

 

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