How Does Hims Make Money? Business Model of Hims


How Does Hims Make Money

Hims is a San Francisco-based American telehealth company dedicated to men’s wellness and care that provides treatment options for hair loss, erectile dysfunction, skincare, and more. The company aims to provide its customers with the best quality products and services related to hair loss and other men’s concerns.

But how does Hims make money? Are you wondering how this company generates its revenue? If so, you’ve landed on the right page. Here we’ll dive into the company’s business model and find out how Hims make money.

Hims operates on a telehealth and medical delivery service model. Hims makes money through subscription fees and one-time purchases. Their assortment of products ranges from sexual health to mental health to hair and skin treatment.

About Hims

Hims is an alternative to primary care in that it is a telehealth platform. Clients can get their prescriptions without having to make appointments to meet with physicians. What makes them a unicorn is that they are always finding new ways to expand their market, including during emergencies of historical proportions.

Hims has been around since November 2017, and although still relatively new, it has been able to successfully build its brand to keep pace with the growing competition.

 

Business Model of Hims

The business model for Hims is that of telehealth and medical delivery service. It was originally founded as Hims Inc. in 2017, and, as the name might suggest, it was geared towards men.

One year later, it launched a sister brand, Hers, for women’s products and services. Due to a merger that was completed in 2022, Hims later became known as Hims & Hers Health, Inc. The company is now trading publicly on the New York Stock Exchange under the ticker HIMS.

Users can pay for a subscription for on-demand access to a doctor and regular prescription delivery. Users also have the option to make one-time purchases of several Hims products.

 

Product/Service

Hims is a platform that offers online consultations for health issues. Hims acts as an intermediary between clients and doctors, thereby reducing the need to actually schedule face-to-face appointments with physicians when all that is needed are prescriptions medications. This process is aided by intake forms and photographs.

In addition to medical sessions for procuring prescription drugs, Hims provides medical sessions for the purpose of actual treatment, albeit online treatment, as part of its telehealth model. That means that clients have 24/7 access to doctors, psychiatrists, and psychotherapists.

 

Marketing Plan

One could argue that the Hims marketing plan has been going well. They are a billion-dollar-plus unicorn and are now publicly traded on the New York Stock Exchange.

The company has been dubbed “D-To-C Brand of the Year” by Ad Age, a leading publication for the advertising, marketing, and media industry.

Due to the fact that they have changed their name from Hims to Hims & Hers, it is obvious that they are looking to expand their market at every opportunity.

In their bold move to include both sexes in their marketing, they have effectively doubled their demographic and their potential market share.

The products they offer are many and wide-ranging. Therefore, they are not niche marketers but, rather, have an inclusive marketing strategy.

 

Expenses

While Hims has relationships with many providers, they are not a provider themselves. Therefore, they do NOT have said expenses:

  • On site medical facilities
  • Salaries for doctors, nurses, and other medical staff
  • Medical malpractice insurance

Hims is a platform, however, so it has all of the usual expenses:

  • Server maintenance
  • Technical staff
  • Cloud services

 

Plan for Profit

Hims is actually not profitable at this time. Due to their SPAC merger, however, that is not their problem, so they do not need to have a problem. Their profitability is the concern of Oaktree Capital Management, their acquirer.

That being said, Hims’s ability to expand to new markets is probably connected to their plan for profitability. They started out with four products and now have dozens of products.

They started out as a product for men and have doubled their profit potential by including women and have managed to do so quickly.

Furthermore, their initial products were prescription drug-related, but they also have several OTC products and general health products like vitamin C.

The health and wellness industry is a trillion dollar industry and as long as there is a need for new products, Hims will be eager to market new products to fill that need.

 

How Does Hims Make Money?

Hims makes money through its subscription fees, one-time purchases, and paid online therapy sessions. It also has business relationships with various providers.

They have a multitudinous selection of products with the following breakdown of their revenue streams:

  • products relating to sexual health 57%
  • hair, dermatology, and other products 35%
  • wholesale sales 7%

 

Sexual Health Products

Sexual health is the lion’s share of their product revenue. Their sexual health products are divided into the following categories:

  • Sexual Health
  • Erectile Dysfunction
  • Premature Ejaculation
  • Herpes

General Sexual Health

The following products are offered in the general sexual health category:

  • Condoms & Lube Kit
  • Ultra-Thin Condoms
  • Glide Water-Based Lube
  • Roller Coaster Bullet Vibrator
  • Summer Sex Kits

Erectile Dysfunction

  • Sildenafil
  • Viagra
  • Tadalafil
  • Cialis
  • Stendra
  • Avanafil

Premature Ejaculation

  • Sertraline
  • Paroxetine
  • Climax Delay Spray

Herpes

  • Cold Sore Kit
  • Valacyclovir
  • Genital Herpes Treatment

 

Hair Products

Hims hair products are divided into the following categories:

  • Hair Loss
  • Hair Care

Hair Loss

  • Hair Power Pack
  • Finasteride
  • Topical Finasteride
  • Minoxidil Solution
  • Minoxidil Foam

Hair Care

  • Shampoo
  • Conditioner
  • Biotin Gummies
  • Non-Prescription Hair Kit

 

Dermatology Products

Hims dermatology products are divided into the following categories:

  • Anti-Aging
  • Skin Care
  • Fragrance
  • Acne

 

Anti-Aging

  • Custom Anti-Aging Cream
  • Goodnight Wrinkle Cream

 

Skin Care

  • Vitamin C Serum
  • Everyday Moisturizer
  • The Blur Stick

 

Fragrance

  • Small Batch Scent
  • Cologne

 

Acne

  • Acne Cream

 

Anxiety and Depression Products

Hims Anxiety & Depression products are divided into the following categories:

  • Mental Health
  • Performance Anxiety

Mental Health

  • Bupropion XL (generic for Wellbutrin XL)
  • Citalopram (generic for Celexa)
  • Duloxetine (generic for Cymbalta)
  • Escitalopram (generic for Lexapro)
  • Fluoxetine (generic for Prozac)
  • Paroxetine (generic for Paxil)
  • Sertraline (generic for Zoloft)
  • Venlafaxine (generic for Effexor)

Performance Anxiety

  • Propranolol (generic for Inderal)

 

Proteins & Powders

  • Unflavored Collagen Protein

 

Immunity Products

  • Vitamin C

 

Sleep Products

  • Melatonin

 

Hair & Nails Products

  • Biotin

 

Hers (sister-brand) Products 

In addition to all of the products for men that are marketed by Hims, their sister-brand, Hers, also owned by Hims & Hers, also has several female products that are marketed in parallel.

While some of the products are identical to their male counterparts, some are different, because women and men have fundamentally different bodies, and many are categorized differently. Therefore, they are listed separately to avoid confusion.

Hair

  • Salon Strength System
  • Complete Hair Kit

In addition to general hair products, more specific hair categories and their products include the following:

Hair Growth

  • Minoxidil Solution (for hair)
  • Minoxidil Foam
  • The Weekender Kit

Hair Repair

  • Rapid Repair Mask
  • Detox Scalp Scrub
  • Conditioner

Hair Strengthening

  • Biotin Gummies
  • Shampoo

 

Skin

Hers Skin includes the following categories and products:

Acne

  • Acne Cream
  • Teen Acne Cream
  • Deep Sea Cleanser
  • Tidal Wave Moisturizer

 

Anti-Aging

  • Anti-Aging Cream

 

Mental Health

Hers Mental Health includes the following categories and products:

  • Bupropion XL (generic for Wellbutrin XL)
  • Citalopram (generic for Celexa)
  • Duloxetine (generic for Cymbalta)
  • Escitalopram (generic for Lexapro)
  • Fluoxetine (generic for Prozac)
  • Paroxetine (generic for Paxil)
  • Sertraline (generic for Zoloft)

 

Performance Anxiety

  • Propranolol

 

Sex

Hers Sex includes the following categories and products:

Sexual Health

  • Birth Control Pills
  • Luxe Condoms and Lubricant Kit
  • All Natural Condoms
  • Glide Aloe Vera Lubricant
  • Roller Coaster Bullet Vibrator
  • OMG Ring Vibrator
  • Urinary Tract Health-D Mannose Powder
  • Yeast Infection Treatment (generic for Miconazole)

 

Herpes

  • Cold Sore Kit
  • Genital Herpes Treatment
  • Valacyclovir

 

Proteins & Powders

  • Unflavored Collagen Protein

 

Vitamins

  • Biotin Gummies

 

Services

In addition to online meetings with doctors and psychiatrists for the purpose of obtaining prescription drugs, Hims clients have 24/7 access to online therapy sessions through a Mental Health Dashboard.

The benefits of being digitized in their services are two-fold.

First, this digitization is a cost-saver, and clients can get the help they need at a fraction of the cost they would normally have to pay for offline, face-to-face visits.

Second, due to quarantines in response to the COVID-19 pandemic, many in need of non-COVID-related medical services and mental health services have been denied the help they need, especially in regards to face-to-face sessions.

Telehealth is a perfect solution to this problem and the timing of Him’s arrival could not have been better.

 

Mental Health Dashboard

Users can just log on to the platform and use the dashboard to schedule and reschedule sessions, track their progress, report their concerns, and network with other users for emotional support.

 

Individual Online Therapy

Individual therapy sessions with a psychotherapist are $99/session and no medical insurance is required. Users can plan long term online treatment programs with their therapists so that their progress can be tracked through the Mental Health Dashboard over time.

 

Free Group Support Sessions

Group support sessions are free for users. Even though this is not a revenue stream directly, it is connected to how Hims makes money in that it promotes their brand and gives users the opportunity to be exposed to paid services, like subscriptions and individual online therapy.

 

Master’s Level Counselors

Even though there are horror stories about people with urgent mental health needs being denied service during the lockdowns of the COVID-19 pandemic, Hims has succeeded in helping their clients where the public system has failed.

Hims gives users 24/7 access to Master’s Level counselors that are specifically trained and qualified to manage urgent mental health situations or crisis mental health situations.

 

Valuation and Revenue

YearValuation
2019$1 B
2020$1.6 B

In October 2020, Hims closed a deal for a SPAC merger with Oaktree Capital Management. The deal was completed in January 2021 and drove the company’s valuation up 60%.

YearRevenue
2020$141.8 M
2021$251 M (projected)

Projected revenue nearly doubled from 2020 to 2021. The Motley Fool has suggested that Hims is undervalued by the market.

 

Is Hims Profitable?

Hims, the direct-to-consumer telehealth company, is not profitable yet. Their costs are higher than the revenue as they are investing heavily in the growth of the business.

Hims had a net loss of $69 million in 2019. According to Forbes, as of January of 2021, the company expects to continue to lose money.

 

Conclusion: How Does Hims Make Money?

We’ve reached the end of this article. We explained their business model in detail, and hopefully, we’ve answered your question about how Hims makes money thoroughly enough for you.

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