If you’re reading this page you’re probably considering starting a subscription box business (aka “subbox”).
Or, perhaps you have an established business, but you’re looking to add the power of subscription payments to your business model.
We’ve drafted this easy to follow guide which covers everything you need to know about launching (part 1) and building (part 2) your subscription box business aka empire.
Talking or reading about starting your own subscription business is different to doing. So for all the ‘doers’ out there – rock on! You can start designing your very own subscription website for free right now using our drag and drop website builder.
Upload a product, connect a payment system, and you’re away in minutes. Don’t believe us? Watch how easy it is in the video below.
If you’re not quite ready, keep reading in order or click through to the topic you want to know more about.
This is version 3 of this guide. There will be more to come, and I welcome your feedback, so don’t be shy to ask the team or I questions. – Note from Stefan, Founder of Subbly
People have been making money from online subscription business models since at leat 2004.
The earliest subscription box we found appeared in 2004 and was called The Sampler. It was a simple collection of samples from indie craft producers, record labels and zines.
But, perhaps the most famous example which spurred the industry’s rise was Birchbox. They launched in 2010 and in less than a year, they had over 45,000 members. Everyone was talking about subscription boxes from that point forward.
Today, everyone is offering subscription offerings. Even Disney has jumped onto the bandwagon. In the four years between April 2014 and April 2018, the industry grew by a massive 890%
Clutch surveyed 528 online shoppers to find out and these were the results
Clutch’s 2019 survey found that more than half of online shoppers (54%) say they are a member of a subscription box service (n=285).
Another 2019 private study found 25% of all shoppers receive a subscription box regularly.
McKinsey’s more comprehensive study found 15% of all products and services sold in the economy are subscription boxes.
Either way, the category is huge and growing. Subscription models have passed mainstream adoption and you’d be foolish to ignore their power to drive superior business results.
Leaving our living rooms to do anything unessential just seems really inconvenient these days. Netflix, Postmates, Amazon Prime, and more bring everything to you. Just click on it, and it’ll be there. And one brilliant person said: Well, why stop there? What if you only had to click once and you’d get what you want on a consistent basis? Yes, brilliant person, we hear you.
Customers get monthly treats, surprises and helpful items they always need, at the convenience and recurrence they always want.
But for the merchant, it’s even better. As a subscription box business owner, you’ll have the stability of recurring monthly revenue that gives you the capacity to grow over time and build brand loyalty (more on this later). Talk to any accountant and they love high ‘free cash flow’ figures, which subscription businesses often allow for.
We hope the information above has convinced you to start your own business and carve a slice out of this expanding market.
If it hasn’t, chat with us or join our Facebook group to talk with a bunch of other people who will be able to answer your questions.
What’s my passion?
If you want to create a subscription box business, you first need an idea.
I can tell you from personal experience – that if you’re passionate about something, you’ll actually want to do it, and you’ll tend to do a much better job in the long-run.
So the first thing you need to do is figure out what topic you really enjoy and how it may be possible to share that interest via a subscription box with the rest of the world.
The most important aspect of this initial step is recognizing that there’s probably already a lot of others out there with the same passion. That’s ok. There’s ways around that which will cover later which will help reduce competitive forces.
You can differentiate yourself by choosing how specific and creative you get within your niche. This will also help you understand your customer persona better which we discuss further in Chapter 2.
Differentiating your business depends on how creative and specific you get in your chosen industry. Click To TweetSo let’s say you love fashion (like me). You’ll want to pick something that people want on a recurring basis that satisfies a particular need or desire and can give your customers a great experience when they receive their subscription box!
Do you want a discovery model (think Birchbox) or do you want a convenience model (think Blue Apron)? Read more on subscription box models to understand this better.
You don’t need to settle on an exact amount now, because nearly everyone changes their prices throughout the company’s life cycle. However, you need to choose whether you want to go for the premium market or the everyday market.
Companies like Blue Apron and HelloFresh are passionate about making healthy cooking easier for those who are much too busy to go to the store, come up with recipes, and don’t have hours to cook. This is their original customer persona (What’s this? Keep reading…). But now they are getting more specific: by creating options for those with gluten sensitives and other special food requirements they have access to a new target customer persona.
Get started right now and try Subbly for free or investigate all of the platform’s features here. Download an extended guide with exclusive content by clicking the PDF download link at the bottom of this page. Or, go to the homepage and talk with one of our team right now via live chat to ask the questions you need answers to.
Who’s my customer? Meet Jane and Bill.
So now you’ve got your subscription business idea. You’re excited and want to start selling, but who are you selling it to?
Creating customer personas will drive so many other decisions and keep you focused once you start a subscription box business.
This step is critical to making sure you are advertising to the correct market and making sure there even is a market out there for what you’re hoping to sell!
I can’t stress this enough – this is probably the number 1 most important step.
But how do you create personas?
You’ll want to understand your customers’:
The answers to these questions will help you with deciding anything from prices to design.
Use polls, surveys, or even just talk to family and friends to get an idea of what kind of customer would purchase your subscription box.
This will be an ongoing process and you’ll constantly learn about your target consumer. But getting started early on will make a big difference. You want Jane and Bill to be itching to get a piece of your box ????
What’s in my box?
Now this is the fun part! Designing and creating your first box. This is the first thing your customers will see and from the moment it arrives at their front door the experience begins. Ultimately this is your “test” box so don’t be afraid to get a little crazy and make it exciting for your customer. Imagine yourself opening it… what would you want to see?
McKinsey found subscription boxes fall broadly into three categories:
Get started right now and trial Subbly for free or investigate all of the platform’s features here. Download an extended guide with exclusive content by clicking the PDF download link at the bottom of this page. Or, go to the homepage and talk with one of our team right now via live chat to ask the questions you need answers to
Where do I get the products to put in my box?
There are plenty of places online that can not only give you ideas for products to put in your box, but also give you an easy place to buy them! Shopping spree anyone? As long as you don’t just buy everything in sight like I do, then you can find some awesome (theme fitting) items to make your box even better.
The real key here is to really just spend time doing this step, there’s no skipping this step and it’s probably the most important one. Alternatively you could try hiring a virtual assistant to help you with your outreach and product sourcing if you are tight on time. Right now if you’re not cash rich then you’re likely time rich so how you want to approach this is up to your circumstances.
You want to make sure you pick high quality products that give value to the customer and make them want to come back for more. Don’t cut corners, the customer will know. So find suppliers who agree with your mentality. You can’t start a subscription box business without products to put in the boxes! So it’s time to get to work!
Finding good suppliers will take effort and time but remember to:
Want a professional opinion? Check out TrendWatcher to see exactly what consumer trends are and what people are wanting!
Get started right now and trial Subbly for free or investigate all of the platform’s features here. Download an extended guide with exclusive content by clicking the PDF download link at the bottom of this page. Or, go to the homepage and talk with one of our team right now via live chat to ask the questions you need answers to
How do I create excitement for my new subscription business?
You’ve got the main components of your idea down and now you want to start getting in front of your target customer persona(s) on the internet and validate your subscription box business model by getting some email signups or pre-subscribers! When something is talked about and creates hype, people want to be a part of it! This is the time to start creating an online presence for your subscription box business so once you launch, everyone will be itching to be a part of your community!
Please do not skip this step when you start a subscription box business.
There are two approaches to a pre-launch campaign, one typically coming after the other:
Let me explain…
Someone is interested in your business and gives you their email address. It’s a signal of interest which can help validate your business concept. These people can be emailed when you go live.
Someone who has serious buying intent and puts their card details in to actually subscribe when you launch. This is a very strong signal of validation for your business idea & model.
The first thing you’ll want to do, regardless of which way you decide to go is to get the word out there about your business and get people excited about your business.
Some great launch page sites are: LaunchRock, Instapage and Unbounce. These tools will allow you to collect email addresses of interested people so you can communicate with everyone once you launch! And since this is a one-page intro, it will give you time to create your full store and site.
Back to it…
Alternatively you can skip the the email signup stage and go straight for the kill and get pre-subscribers. There are arguments for and against doing it this way, and if marketed correctly, you could do this and it would be very successful! FYI you can do this on Subbly.
Get started right now and trial Subbly for free or investigate all of the platform’s features here. Download an extended guide with exclusive content by clicking the PDF download link at the bottom of this page. Or, go to the homepage and talk with one of our team right now via live chat to ask the questions you need answers to
Ok, now how do I get my business set up and online?
Please note that if you’ve already got a business you might already be set, but if you still need software that can handle subscriptions then read on.
Your idea is becoming a reality and if you’ve completed all the chapters and steps then you need to get your actual subscription enabled website ready for going live. You may already have decided to go with the pre-subscriber approach using a platform like Subbly that can handle this stage. If so, then you’re on your way.
If not, then let’s talk about ecommerce platforms and software to get you setup!
This step is really critical. You need to consider multiple aspects when you decide on what platform or solution to go with to start your subscription box business. (Yes, more considerations… it ain’t easy getting a business going but I promise we are going to make it as painless as possible!). In fact this part is a paramount when you decide to start a subscription box.
You want to choose something that…
Sounds like the handbook to a successful relationship if you ask me… minus the customer part, that’s kind of weird.
There are 3 different main types of solutions:
We’re going to make a big assumption right now… That you’re going to go with #1 (because we’re totally and utterly biased ?).
Ok, so you need to consider the features for the software platform that you’re going to choose to start a subscription box business. What do you need and what are nice to haves?
Some features to consider:
There are many more… but those should get the cogs turning a bit for what is important to you and your business. Realistically you want something simple yet capable to help you start your subscription business efficiently!
Be wary of features you don’t need! They may seem appealing but could end up complicating your decision and making your business model more complex than necessary. No, thanks!
When you’re weighing up features, you should also weigh up the costs. Those could include: monthly, transactional, setup or even hidden costs. Make sure to look into your recurring costs for running your business and what makes the most sense!
This one is super important. How responsive is the platform’s support? Is speed important to you, or quality of care? Or both?!
Customers need to know they are going to be looked after, no matter what. You don’t want to be left behind if the platform expands or shrinks or if they add features.
One thing that might be really advantageous and important to you is being able to get on the phone with someone. I’m proud to say that since Subbly launched 3 years ago, even to this day you can still schedule a call with our CEO. This might mean nothing to you, you might just care about email support. So whatever is important to you, just make sure you factor it in.
This one might be important to you if you’re on a tight deadline. But how long does it take to set up and have a site ready to sell? An hour? A day? 1 week? When you start a subscription box business, you want to make sure you can remain LEAN (I highly recommend reading The LEAN Startup by Eric Ries). So make sure you can launch fast and scale fast to validate your business (more on this later).
Naturally you’re going to grow your business and you must consider if the platform or company you choose can scale with you.
If you have any questions about Subbly feel free to tweet us. GIFs are welcome 🙂
Ahhh, I have my first orders in! Now what?
Okay breathe. Now jump up and down with excitement. You’re officially a subscription box business owner! … Ok now savour it for a minute, and then back to work for the next mile stone. There’s no rest for the wicked when you start a subscription box. 🙂
If you haven’t already gotten emails or pre-subscribers from the time of your pre-launch you’ll need to apply some of the advice featured in the “Building Hype 101” section and the two strategy suggestions to get your first customers! You will also likely need to utilise social media and dip into Chapter 6’s marketing strategies in order to get people to know about your business and sign up!
The best way to go if you didn’t opt for a pre-launch strategy? Social media! Tell everyone you know to post something about your new business and you’ll have people coming through your website in no time.
Your launch is a big part of how you’ll keep going with the business. Once you have your customers and your ship date all set, you’ll need to start getting fulfilment underway so people can start receiving their boxes!
We’ve come to end of our guide on how to start a subscription box business. I am really glad you joined me, and I hope our journey and relationship doesn’t end here. Keep reading the second part of this guide which is all about how to grow a subscription box business.
If you’re serious about starting a subscription box, then I’m sure you have more questions, if so, then let’s talk. Feel free to tweet us.
If you have any questions or need any help starting your business, then please feel free to contact our friendly support team! We wish you the best of luck in starting your subscription box business.
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