How To Start A Subscription Box Business (Easy Start-Up Business Ideas)

How to Start a Subscription Box Business

Subscription boxes are everywhere. They are one of the best ways to shop, for they offer customers unique buying experience through personalized products and themes, new product information and a lot of many offers. Subscription boxes like Birchbox, Blue Apron, Dollar Shave Club are interesting, fun and easy way to discover new products in the market or refill everyday goods. Subscription boxes are like customized monthly hampers for everyone.

Starting a Subscription box business

So, how sellers are benefited out of this, you may want to know. Although there are big names in the market, individually run, smaller subscriptions box companies can tremendously succeed by building their own business centered around the products and communities that they have an interest in.

As a subscription box company owner, you will be sending curated experiences to each individual subscriber. And the recurring revenue model will ensure a steady income stream from new as well as existing business. The best part? You can easily run the business from home; no hefty investment or big business plan required. Not only that, the earning potential is humongous. The more you offer cost-effective, personal experience to enthusiasts, the more your business will scale. And eventually, you will be able to make the gig your full-time business as well.

We have collected a few important steps that you need to follow to run a profitable and successful subscription box company. Here you go:

Step 1: Know What Entails A Subscription Box Business

Successful subscription boxes must have at least 4 of the following elements:

  • Ever popular category
  • Emotional connection
  • Continuous discovery for audiences (new releases in popular categories)
  • Recurring demands
  • A community of existing enthusiasts
  • Inspiration and motivation

According to a 2017 April Forbes Article, subscription market is gearing up with new enthusiastic providers of all sizes and types, with more than 5.6 million subscription box shoppers and over 2000 subscription box service providers.

There are two types of subscription boxes: discovery boxes and convenience boxes.

Convenience boxes offer the same product with each delivery but may differ in size, quantity, color, brand, design, and style. The goal is to provide essential convenience to clients on a regular basis.

Customers get to discover new products in Discovery boxes. There is an element of surprise with each delivery.

Step 2:  Decide Your Product For Subscription Box

You should always pursue a business venture that you are 100% passionate about. And it usually starts with the products and services you want to offer. While selecting your products you need to consider a lot of things, such as the cost of sourcing the product, the demand for the product, the size, the weight, and the shipping cost.

You can find many subscription box ideas online, specific to your niche if you do some research. However, you really need to think about what exactly you want to sell in the first place. You could take into account the customer’s lifestyle and choices before you decide on your box. For instance, if you are passionate about cosmetics and accessories, you cannot create subscription boxes for wrestlers. You and your subscribers must have something in common, probably the interest and passion.

Step 3: Determine Your Niche And Relate It To Your Customers

Once you have figured out what kind of products you want to sell, and under what category they fall, you have to put yourself in your customer’s shoes and create a buyer persona. A buyer persona is nothing but your target customers’ profile and habit. This includes:

  • Age and gender
  • Their income level
  • Their taste
  • Location
  • Their shopping habits or pattern
  • Their purchase type
  • And other related choices

Don’t try to chase two rabbits at a time. Since there are so many opportunities in the subscription e-commerce, we suggest that you do not cater to everyone. You have to define your buyer properly, and it should be as perfect as your product is.

Step 4: Sourcing Your Products

Initially, you will have to pay for the products to your suppliers. However, as you scale your business, you will have the benefit of receiving free products from suppliers and manufacturers as part of their marketing strategy. So, you will have to decide the way you want to operate:

  • Paid products: Approach suppliers and negotiate the cost of the products for your subscription box. Most start-ups choose this option as it gives them complete control over their products.
  • Free Products: Suppliers and brands, in a way of promoting their products to the targeted audience, provide free samples to subscription box companies. Although it may save your cost and time, it may not give you full control over your products.

Step 5: Set Your Subscription Box Price

Now, this can be tricky. If you charge too low, your products will be considered cheap. If you set the price a little too high, it will drive away your customers.

Price is the most important element that determines the success or failure of a business. Conduct research on your competitor’s pricing structure and use that as your starting price. After that, your product source, product quality, shipping cost, brand value, weight, transaction cost, fixed monthly costs, and acquisition cost should be brought into the picture to work out your margins.

Step 6: Think Prototype, And Shipping And Handling

Before you begin shipping your boxes, you need to get a prototype box readied for your potential customers. You have to introduce your box to your potential subscribers that they will be receiving month after month. Your prototype box should not just have the exact item you plan to ship, but it should be of the same quality, brand value, and quantity you plan to offer.

You have to ensure that your prototype box easily fits into the standard mailbox. Try this and we guarantee you will save a lot of shipping and handling charges. There was a company that reduced the size of their box by 2 cm and by doing so it eventually reduced hundreds of dollars on the shipping because it perfectly fit the standard mailbox. If you are just starting out, every penny should matter to you.

You should also think of how you plan to pack your products; do it on your own or appoint a third party.

Step 7: Find Right Membership Options

Before you even set out running the huge business, and even before you get your first customers, you should have an exact idea of what they want. Questions you need to ask yourself are:

  • How frequently do my customers want the subscription box?
  • Will the order be delivered weekly, bi-weekly, monthly or quarterly?
  • Should I offer a free trial to see the response?
  • What should be my unique selling point? A free product with every box, a coupon code of a brand or anything else!

The only way you can find this is by testing the water. Don’t create any contracts between you and your customers. You are not doing business with customers. You are actually dealing with everyday customers and everyday customers usually run away from obligations and commitments.

Step 8:  Begin Your Prelaunch

Before you launch your boxes fully-fledged, you need to pre-launch in order to attract and gauge interest and build a buzz around your launch. You can use a pre-launch website theme or sign up on landing pages, whichever is comfortable for you. There are several big things you need to manage during your pre-launch. Here are they:

  • The length of your prelaunch: Make it anywhere between 15 and 60 days. If you have not reached your signup goals in two months, then you should drop the market altogether.
  • Email signup goal: Do you want to start with 20 customers, 30, or 100? Your subscriber count will determine the conversion rate. For instance, if your target were 20 customers, you would require a minimum of 200 subscribers.
  • Connect your email to your prelaunch page: At the pre-launch stage, your focus should be collecting email addresses as many as possible. Create a simple landing page and link it to your preferred email id.

Once your pre-launch efforts are underway and succeeding, you should start working on your launch with tasks like product sourcing, ordering boxes, shipping schedule, and packaging.

Step 9: Marketing Your Subscription Box

You cannot run this business without subscribers and customers. You have to grab the earliest of opportunities to acquire customers. One of the most essential metrics for measuring growth is the Cost per Customer Acquisition or CPA. So, you have to be smart, practical, sensitive and innovative to market and advertise your business, and acquire buyers at the lowest cost possible.

Thanks to the advent of digital marketing strategies, our marketing scope has doubled in the past several years. Now, apart from the traditional marketing tactics, you can use the internet, your website, social media channels, and many other ways to promote your subscription box company.

Your focus should remain on making your subscription box go viral. We have mentioned a few easy and cost-effective ways here:

  • Establish a Website: You can either self-host your website or get in touch with a professional web designer for the work. Self-hosting will not cost you more than a few dollars a month. Make sure you add all the necessary information that makes a website interesting and lively.
  • Create a Marketplace Listing: Marketplace listings are accounts that are easy to set up and process. You have to make your store go live, submit your listings for approval, and become eligible for Marketplace marketing efforts.
  • Use Social Media: Use your social media reach to attract customers and talk about your products. Share the link to your website on your social media handles, such as Instagram, Facebook, Twitter, and LinkedIn. If you can, partner with a digital marketing service provider, who will be able to make the entire online marketing process seem like a cake walk.
  • Influencer Outreach: Influencers are popular figures or celebrities who have thriving followers (probably more than 1000). Get in touch with a suitable influencer and find out if he/she is willing to market your box to his/her followers and audience. Make sure the influencer is from the same niche as you.

Apart from these marketing tools, you could also try implementing SEO tactics, Google Analytics, PPC marketing tools, and video marketing. However, do not forget the traditional approaches, including posters, flyers, brochures, and word-of-mouth publicity; they are equally powerful and can be quite viral.

Step 10: Start Taking Orders – It’s Launch Time

Congratulations! If you have come this far successfully, you are almost there to open the gates for your customers. Over the course of the pre launch phase, you have been busy doing everything to ensure your launch takes off smoothly. Bring everything together and notify your customers of the shipping date. Make sure your email tracking is ready, your shipping partner geared up for orders, and your billing and payment processors set.

Make sure you are constantly in touch with your customers. If your shipping date is not until 45 days from the date of the first bill, make your customers aware to avoid confusion.

After the first set of boxes are shipped, reflect on your accomplishments, and gear up for the next few steps, such as feedback, more marketing, more promotion, and more sales. Evaluation and implementation should be carried in each process step for 100 percent productivity and efficiency.

Continue marketing and encourage feedback. You can eventually diverse your business by launching new product boxes or delivering one-time products to gain more subscribers. Hope this article provided exactly what you were searching for.

Good luck! Do write your questions and doubts below in comments.