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How to Start a Subscription Business


Step 2: Choose your subscription products

Choosing the type of products you want to offer each month is fundamental to starting your subscription business. You can reach out to brands to create partnerships if you’re not manufacturing your own products. You can also create a “prototype box,” or sample subscription, so new subscribers can get an idea of the types of products they will receive each month.

Step 3: Price your subscription boxes

There are several things to consider when pricing your new subscription service. Consider the items in your box, the cost of packaging materials, fulfillment, shipping, transaction fees, and platform fees. You should price your package with at least a 40% profit margin to be viable. Pricing is an essential part of your subscription strategy, and a one-size-fits-all approach could turn some people off while leaving money on the table for your most engaged customers. One of the best ways to price your offerings is to use a tiered model.

For example, you can offer discounts to people who commit for a certain number of months or to specific customer groups, such as students. Then adjust your prices over time based on your customers’ experience. If possible, keep your existing customers at a fixed rate and only raise prices for new customers. Also, if you set a price but feel something is wrong, don’t hesitate to offer customer surveys or special offers. Look for details – which prices seem to resonate most with your audience? When you are diligent about pricing, you give your business the foundation for a strong and sustainable revenue stream.

For example, the Variety Fun subscription offers two options: a less expensive “Fun Box” with more traditional snacks and a more expensive “Fit Box” focused on healthy snacks. You can also offer different prices depending on your subscriber’s commitment length. A one-year subscription would have a lower monthly cost than a monthly subscription.

Step 4: Put together a prototype box

A common mistake when launching a subscription box is having your first mailing ready before you start marketing. The purpose of a prototype box is to introduce potential subscribers to the types of products they will receive month after month. A prototype box doesn’t have to contain the exact items you plan to ship in your first month. But it should match the quantity, quality, and value of the products you intend to deliver to customers once you launch. To create your prototype box, you must first choose your products, select your box, and your packaging materials. 

Step 5: Set up and design your website

Once you’ve chosen the type of subscription and the products you want to offer, it’s time to create your website. Creating your website can be intimidating, but there are many user-friendly eCommerce platforms and no-code designers to help you get started. Your website will allow customers to sign up to receive and customize their next box. You can also share information about the products they receive each month.

Step 6: Market your new subscription business

Marketing any business is the key to success, but it can seem daunting when faced with a blank slate. Selling a subscription is selling a relationship with your brand. You need to explain to customers how your subscription will enrich their lives.

  • Develop and brand all your social media platforms.
  • Run contests and giveaways to get people excited about your product.
  • Start building an email list and send out regular newsletters.
  • Take tons of product photos, so you have creative assets to promote.
  • Entice subscribers to refer their friends. You’ll gain more customers, and referrals will stay subscribed longer to enjoy their rewards.
  • Invite customers to give you feedback on each subscription box mailing. 
  • Send subscribers a survey after each mailing and ask them to rate each item in the box. You can then use this feedback to identify their tastes and send them items they are more likely to enjoy next time.
  • Offer collectible items or packaging with each shipment, such as a sticker or collectible box, to keep customers looking forward to each new arrival.

Be sustainable. According to a study by the National Retail Federation and IBM, 70% of North American consumers want brands to be environmentally friendly. Focus on sustainable practices in your business and share them with your customers. 

Consumers expect their subscriptions to become more personalized over time, and 28% of curation and access groups said a customized experience was the most important reason they continued to subscribe. With a subscription model, customer retention is key. To keep your paying subscribers, focus on high-quality customer service – without it, recurring revenue cannot be sustained. After all, it costs five times more to acquire a new customer than to retain an existing one.

Engage with your customers as much as possible, encouraging them to post on social media or asking for feedback on your offerings. A good experience can turn into recurring revenue, which is the foundation of your subscription service.



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