As of the last couple of years, subscription box services have been taking the internet by storm. You may have heard of booming businesses such as Barkbox, Dollar Shave Club, and Birchbox. This highly profitable online business model has a great potential for success. Customers absolutely love to have a package full of surprise goodies to look forward to each month – it’s like a monthly birthday present – so it’s an easy premise to sell.
Advantages of Starting A Subscription Box Company
There is the obvious advantage of selling subscription boxes; most of your customers will receive and pay for an order every month. It’s especially prone to creating repeat customers, so you will have to worry less about customer acquisition and retention than you would with other business types. You’ll still need to market your service, but every sign-up will be much more valuable and your revenue will be relatively predictable.
Disadvantages Of Starting A Subscription Box Company
Since your customers will expect new and exciting items every month, you’ll need to be especially savvy at connecting with vendors and finding innovative products to offer. You’ll always have to be on the lookout for the latest and greatest products in your niche, or your subscribers will get bored with your selections and cancel. In some situations, this won’t be the case. A subscription service that sells diapers to busy parents, for example, will deliver the same product each month, making supplying a no-brainer.
Some Subscription Box Business Ideas To Get You Started
- Cosmetics
- Snacks
- Coffee
- Socks
- Fitness supplements
- Children’s toys
- Pet supplies
- Romance kits
- Art supplies
How To Start A Subscription Box Website
If you’re not familiar with web design, or don’t have a huge budget for creating a highly functional e-commerce website, don’t worry. Platforms such as Subbly and Cratejoy make it easy. For a monthly fee, these platforms help you set up and maintain a website with all of the functionalities you’ll need to sign up and manage customers. You can begin collecting pre-orders for subscriptions before moving on if you’re not sure if your idea will flourish.
To make the monthly fee as inexpensive as possible, you’ll need to purchase products at wholesale prices from vendors. Look for small brands to partner up with that do not sell their products in major stores. Small vendors will often be happy to offer you a bulk discount and get their products into the hands of brand-new customers.
Your customers will be thrilled to receive interesting new products, rather than the same old items they can easily find at Wal-Mart. Opt for premium, high-end or gourmet, even if it means offering higher subscription fees.
The optimal way to price your service is to offer three levels: a basic, cheap option, a mid-level option, and a premium option. This allows you to serve a range of customers without overwhelming them with choices.
This subscription box fad does not seem to be going away anytime soon. It’s nothing new, either; fruit/cheese/wine-of-the-month clubs have always been popular, and now it’s easier than ever before to create a fun, recurring delivery service. If you love discovering new products or serving up convenience this could be the perfect entrepreneurial venture for you.
If you need help with your business taxes for your subscription box services, contact us for a free quote.