Here’s the Skinny on the Chubbie’s Business Model

I recently received an email from my significant other with this subject line: Can I wear these to your cousin’s wedding?

Intrigued, I opened the email and saw this:

“The Captain” Chubbies Short. It’s a classic, bro.

To be fair, my cousin’s wedding is at a camp in the Berkshires, so it’s not totally out of line to wear shorts. But, these aren’t just any shorts. These areChubbies. And, yes, of course, my boyfriend can wear Chubbies to the wedding. I would never deny him the chance to show off his thighs while supporting a company that has masterfully crafted a brand that appeals to millions — literally millions — of men.

There are many things to love about Chubbies. For one, they offer a shorter inseam (5.5”) than the average knee-length short. The brand itself has a laid back, far out and totally awesome attitude. They drink up life and encourage customers to do the same. They grew their Facebook following to over 500K when they offered everyone that “liked” them a free Chubbies koozie. They don’t take themselves too seriously, and this attitude clearly resonates with their customer.

One of the reasons Chubbies is able to be so amazingly bro-tastic has to do with their verticalized business model.

Vertic-ah-who??

Verticalization refers to the trend popping up all over e-commerce in which businesses hone in on one particular product or service. The idea is that focusing on one product from production to consumption allows verticalized companies to give customers a higher quality product, better shopping experience, top notch customer service and most importantly a better price than other traditional retailers. We’ve seen Warby Parker do it with glasses, Harry’s do it with razors and now Chubbies are doing it with men’s shorts.

Verticalization allows companies to capitalize on several key aspects of business:

1) All About Product

Companies that control their supply-chain get new products to market fast. Our friends at Chubbies release 3-6 new styles a week! One of the founders, Rainer Castillo, told Forbes.com, “We want to be the shorts authority. We want to have the coolest new stuff on the market and always offer cutting edge new ideas.” Because they are in control of the entire process from supply chain to consumer sale, they don’t have to follow typical seasonal transitions and selling patterns that you might find at a traditional retailer. This allows Chubbies to continually serve customers new, bro-dacious shorts as often as they want.

2) Creating an Experience

Freedom is a word that comes to mind when thinking about a verticalized company. When companies have full control over how their products are displayed, priced, merchandised and promoted, they can create an experience that is truly unique. As Chubbies co-founder Tom Montgomery said, “We’ve got a product that we friggin’ love and are just completely stoked to be bringing about the end of cargo shorts. Because of our passion, we have the liberty to just be completely ridiculous, and that’s awesome.”

3) Killer Customer Service

One of the best parts of being a verticalized company is that you get to talk to your customers every day. Providing top notch customer service is a priority for these types of businesses. They have been breaking the boundaries of typical e-commerce sites in an incredibly personable way. In the case of Chubbies, they offer customers a 100% satisfaction guarantee. If a customer is not satisfied, he can call Chubbies and speak to a person directly. This might sound small, but many online businesses still desperately struggle to master the art of superior customer service. Chubbies customers seriously respond to this sort of treatment because the company has built a relationship with them.

4) The Price is Right

Price is, and will always be, an enormous part of creating a successful online business. Verticalized companies benefit from “cutting out the middleman.” Everlane has famously built their business on the foundation that producing and selling their clothing directly allows them to control costs and pass the savings over to the customer. Chubbies benefits from the same direct-to-consumer model. In large part, this model is what allows them to manufacture in the USA and offer competitive pricing.

Adopting the verticalization model also presents challenges. It is difficult for companies who sell exclusively online to compete with marketplace behemoths like Amazon. Attracting people to your site and converting them to customers can be a laborious, and expensive, task. Furthermore, you cannot rely on walk-in traffic or the ability of the customer to feel and see before they buy like they can in a storefront retail space.

Ultimately, verticalized companies, like Chubbies, must be motivated to provide their customer with a truly unique and tailored experience. The ability to maintain full control of the brand and customer engagement is one of the most attractive aspects of this model. At Brass we endeavor to do the same: provide a high-quality product at an undeniable value, all while creating a community that shares our values.