How to Start a Subscription Box Business
Are you a boutique owner or creative entrepreneur wanting to diversify your income this year or increase profits so you can leave your full time job or bring your husband home? It’s not always smart to have all your eggs in one basket… so you can put some of them in a box!
Enter subscription boxes.
“Some research shows that the subscription ecommerce market is projected to reach over $450 billion by 2025, up from $15 billion in 2019—which makes it a massively interesting opportunity for existing and aspiring business owners, too.” — Shopify
Financial benefits:
Subscription boxes offer a personalized and affordable option on a recurring basis. This can turn one-time shoppers into repeat and even lifelong customers.
Subscription boxes are a predictable monthly recurring revenue (MRR) that you can accurately forecast for future growth and scale. Knowing how much money is coming in every month helps you plan and prepare everything from sales forecasting to inventory.
Customers make payments on a regular basis, so you don’t have to invest as much in new customers to keep your business going.
If done well, subscription businesses create extremely loyal, repeat customers—and repeat customers spend 67% more than new customers. This makes it easier to market additional products or services to them, because they already know you provide a valuable service.
Starting a Subscription Box Business in Six Steps
Step One:
Choose your subscription model and what products you’ll offer. Look at brands you already love and see what’s working and what you like. Think about your target audience and the needs you're filling—the solution to their problem. What would add value to their lives?
Step Two:
Pick the specific products you want to offer each month. Start making samples if you’re making some product yourself or start reaching out to brands to create partnerships so that you can offer their products at a lower cost to your business. Build a prototype box.
Step Three:
Start pricing your boxes. Once you know what products you’ll use and how much they will cost you can price your subscription. The key will be an appealing price to your customers and a profitable price for you.
Step Four:
Build your website. You will build an email list from here to sell to and you will share photos of products, allow customers to sign up for their next box, and share product information. Shopify offers a variety of subscription app options: Shopify’s subscription app collection.
Step Five:
The financials: Get your bookkeeping in order from day one. Open a separate business account so your business and personal are separate. Register your business. Create your business budget. Research shipping fees and other expenses, so you can start planning what will be coming in and going out of your business. Outsource your bookkeeping if you don’t want to do it yourself.
Step Six:
Brand and market your subscription box.
Brand your business if you’re starting from scratch. Choose your business or box name, your logo, color palette, aesthetic and research your target market.
Choose the social media platforms you will use and streamline all your content with cohesive branding. Add Pinterest, if you’re wanting to drive direct traffic to your website.
Create your own original product photos that continue to brand your box and add value to it, through high quality images that are aesthetically pleasing. You will use these creative assets across all your marketing platforms.
Start building an email list and send regular newsletters. Unlike social media you own your email list and your website so these are valuable commodities for your business especially if something were to happen to social media (account gets hacked, etc). Your email list is for selling your box. Create consistent, meaningful communication through newsletters that build trust and rapport, and nurture the relationships of current subscribers. Grow your list through a free download, pop up box on your website and calls to action on social media.
Set aside a small ad budget that you can use to start building brand awareness
Reach out to micro-influencers who you may be able to partner with for a small fee, or cross promotions, or product they would like to donate in order to get in front of your audience.
Write and publish press releases about your new product
Know where your people are and join those groups and online communities to build brand awareness.
Partner with like minded brands who will also share your brand running contests and giveaways to get more eyes on you that can convert to potential customers
If you’re a boutique owner or creative entrepreneur, join Boutique School, an online program to learn more about how to run a business. If you need to outsource bookkeeping, fill out the free estimate form here.