In a climate where album sales are scraping the bottom of the revenue mix, Mike Frankel had a novel idea: Why not put merch first? In December of 2012, the27-year-old Columbia business school grad and long-time music blogger put his money where his mouth was with a new company called Merchbox. A subscription delivery service in the vein of the hit cosmetics startup Birchbox, Merchbox is based on the daringly simple premise that even digital music lovers will still flip for physical goods— provided that they’re fun and well curated.
“I had been in a friend’s college dorm room and I realized that everything was digital: his music, his books, his movies. There was no stuff,” Frankel says. “I thought there might be a way to bring back a more intimate experience with media.”
Each Merchbox customer pays $10 per month, plus shipping, and receives a customized monthly care package that includes nostalgia-inducing merch and two exclusive CDs by indie artists. Subscribers fill out an initial questionnaire to define their tastes and are then placed into one of six internal categories, each of which gets a different box. Past Merchboxes have featured cassette-shaped wallets, t-shirts and lollipops as well as music by bands such as The Last Royals and Beat Radio. Since launch, the company has grown to 1,500 subscribers and isserving places as far as Dubai, Australia and Guam.
Frankel, who also helps run the actor Adrian Grenier’s record label and online concert series, both under the name Wreckroom, has so far acquired the music used in Merchboxes by donation. That’s a tough sell for more established artists, but it works for baby bands eager to engage with passionate music fans. The non-music goods inside the average Merchbox-- typically procured from toy conventions and other wholesalers-- add up to between $5 and $6 in expenses per box.
“I want to get to the point where I can say to labels ‘Hey, this is a great discovery mechanism,’” says Frankel. “Because I know that’s one of the most difficult things in music right now.”
Merchbox subscribers are young— the average age is 21— and active on social media. Because the company never discloses the contents of each box publicly, customers have taken to sharing photographs of their boxes online with the hashtag “#merchbox” in order to compare notes.
“I think what I’m really selling is the excitement of discovering something new,” Frankel says.
Next up for Merchbox is a series of guest-curated boxes featuring goods chosen by artists with a higher profile— think “Oprah’s Favorite Things,” but for music lovers. And the company doesn’t plan on stopping at music, either. Frankel says he’s in talks with a food company to create a similar service that would give beloved local foods a national audience.
“Each month you’d get an artisanal food from a different city,” he says.
Having outgrown a small office in Manhattan, Merchbox just moved to a larger space in Brooklyn. The company plans to expand its current staff of four employees (plus a rotating staff of friend volunteers) in May. Frankel promises interested applicants need not fear the manual labor.
“Like any startup, we wake up to new challenges every day,” he says. “The actual boxing is the relaxing part.”