Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Artisan Soap Shop Used a Custom-Scent Club to Beat Amazon
Transcript
- Lucas: You know how most small businesses talk about competing with Amazon as if it's this existential, abstract threat — like, how do you possibly fight a giant that can undercut you on price and deliver in two days? Luna: Right, and most of the time the answer is 'you can't, so don't try.' But some shops actually find a way. Lucas: Exactly. So today I want to talk about a small-batch artisan soap maker in Portland called 'Fettle & Fizz' — not their real name, by the way, the owner asked me to keep it anonymous — but the numbers and the strategy are real. And they've built something that a lot of subscription businesses dream about: a 90 percent six-month retention rate. Luna: That is insane for a physical product subscription. Most boxes in that space see 30 to 40 percent churn within the first few months. Lucas: Yeah, and the industry average for subscription retention after six months is something like 50 to 60 percent. So 90 percent is genuinely exceptional. The question is how they did it. And the answer starts with something that sounds almost too simple: a custom-scent club. Luna: So it's a 'scent of the month' type thing? But with a twist? Lucas: Exactly. It's called the 'Scent Lab' subscription. You pay $28 a month, and each month you receive a 5-ounce bar of cold-process soap in a new scent that the shop develops exclusively for subscribers. But the key is that the subscribers don't just receive — they vote. Luna: Vote on what? The actual fragrance? Lucas: Yes. Every month, the owner develops three potential scent profiles — say, a smoky cedar with bergamot, a lavender and sea salt blend, and a honey-tobacco thing — and then subscribers vote on Instagram Stories or through a quick email poll. The winning scent gets made and shipped. The losing scents sometimes show up as limited editions in the shop later, but subscribers get first access. Luna: So the customers feel like they're part of the creative process. That's a pretty powerful psychological hook. Lucas: It's co-creation, essentially. And it solves two problems at once. First, it creates anticipation and engagement — people are checking their email to vote, they're talking about it in the comments. Second, it eliminates the biggest risk for the business: guessing wrong about what customers want. Luna: Inventory risk. The classic small-business killer. Lucas: Exactly. Most soap makers produce in batches and hope the scents sell. If you make a big batch of, say, pomegranate and clove and it doesn't move, you're stuck with product that ties up cash and shelf space. Fettle & Fizz essentially pre-sells every batch through the subscription, so they only make what's already been voted for. They produce to demand, not to forecast. Luna: That's the dream for any small manufacturer. What kind of volume are we talking? Lucas: The shop launched the subscription in March of 2023, and as of June 2026, they have just over 1,100 active subscribers. At $28 a month, that's about $30,800 in monthly recurring revenue — call it $370,000 a year from subscriptions alone. And the owner told me that subscription revenue now makes up about 42 percent of total revenue. Luna: So the rest comes from walk-in retail at their storefront and online one-off sales. But the subscription is the backbone. Lucas: Exactly. And the most interesting part is that the subscription actually pulls people into the store. About 20 percent of subscribers, the owner says, live in the Portland metro area, and they'll come in to pick up their monthly bar in person, and then they buy other things — gift sets, lotions, candles. So the subscription becomes a foot-traffic driver. Luna: That's a nice virtuous cycle. The subscription builds loyalty and predictability, and then the in-person experience deepens the relationship. Lucas: Right. And the owner was very clear that they didn't want to compete on price. A 5-ounce bar of cold-process artisan soap typically goes for $10 to $15 in a store. The subscription works out to $28 for one bar, which is actually a premium. But subscribers aren't paying for soap — they're paying for the experience of discovery and influence. Luna: So it's not a commodity sale. It's a membership in a little creative club. Lucas: Exactly. And that's the lesson for any small business looking at Amazon and feeling intimidated. You can't win on price or speed, but you can win on relationship and uniqueness. Amazon can't offer a voting process for next month's scent. Amazon can't have the soapmaker herself write a handwritten note in each box — which Fettle & Fizz does for the first three months of a subscription. Luna: That personal touch is huge. I've heard of subscription boxes that do that, but usually only for the first box. Lucas: And they do something else smart: every new subscriber fills out a 'scent personality quiz' when they sign up. It asks about favorite smells, memories associated with certain fragrances, that kind of thing. That data helps the owner tailor the monthly voting options — so someone who said they love woody scents won't be voting on floral-only options. It adds a layer of personalization without having to do individual batches. Luna: So it's mass customization in a way. You get the efficiency of one production run, but the customer feels like it was made for them. Lucas: Exactly. And that quiz also serves as a lead magnet on their website. Before they even know about the subscription, a visitor can take the quiz and get a recommended scent profile — which the shop then uses to suggest a starter kit. The conversion rate from quiz-taker to buyer is something like 12 percent, which is high for ecommerce. Luna: That's smart funnel building. And it's all very low-tech. No AI, no complex software — just a Typeform quiz and an Instagram poll. Lucas: The owner's background is actually in graphic design, not chemistry. She started making soap as a hobby during the pandemic, and the business grew organically. The subscription was her way of creating stability after the first couple of years of chaotic demand swings. Luna: So this is a story about using a simple recurring revenue model to de-risk a handmade product business. I love that it's not about getting venture funding or scaling to millions. It's about 1,100 people who love what you do enough to pay $28 a month. Lucas: And that's the thing I want listeners to take away. You don't need a massive audience. If you can find 500 or 1,000 people who genuinely value what you offer, and you build a mechanism for them to pay you regularly, that's a real business. It's sustainable. It's not dependent on Amazon's algorithm. Luna: And it gives you the freedom to keep making your product the way you want to make it. Lucas: Right. And I think that's honestly the whole point. If these conversations have moved your work forward in some small way, you know, the show stays ad-free because of listener support. If today was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Luna: Yeah, it's a tiny ask for a lot of practical ideas. We appreciate everyone who chips in. Lucas: Alright, so back to Fettle & Fizz. One more thing I want to highlight: the owner told me that the subscription has also changed how she thinks about product development. Before, she'd create a scent and hope it sold. Now, she creates scents specifically for the voting process, and the losers give her data about what people almost liked. That feedback loop is gold. Luna: So the subscription is not just a revenue model — it's a market research tool. Lucas: Exactly. She knows that if a scent gets 60 percent of the vote, it's a hit. If it only gets 10 percent, she knows not to invest in a full batch. And over time, she's built a library of 'almost-winners' that she can bring back as limited editions, which creates urgency and FOMO. Luna: So the losers become winners later. That's clever. Lucas: And it all ties back to that core insight: don't try to sell soap. Sell membership in a community of scent explorers. That's a much harder thing for a big competitor to replicate. Luna: I think that's the perfect note to end on. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.