The subscription business model first appeared around a decade ago, and following a small lull, it has expanded into almost every major industry in recent years. With predictable revenue for businesses and convenience and cost-saving benefits for consumers, subscriptions are now an established part of consumer culture.
Last year, the UK ‘subscription economy’ was valued at around £395 million. Clearly, there’s a significant consumer attitude toward subscription services, highlighted by the fact that today’s millennials have an average 17 paid media and entertainment subscriptions each. But one area of the subscription market that has seen a recent boom is subscription boxes: featuring everything from beauty products to pet food, a subscription box can encourage consumers to forge a long-term relationship with a brand on a promise of ultimate convenience.
With the right product and the right model, subscription boxes are an ideal way to grow a loyal subscriber base — even for a startup business.
So, if you’re thinking of setting up a subscription box business — or adding a subscription box service to your existing offering — read on to find out how to start a subscription box business.
How to create your subscription box idea
The great thing about subscription boxes is that you can create a model that suits a range of demographics and interests. However, when it comes to launching your first box, it’s best to pick an area you already have a decent amount of knowledge about. It’s important to have a good understanding of your target market and what’s likely to resonate with them.
The initial ideation and research stages are the most important: no stone should be left unturned here! Assess the market and try to gauge the level of demand and competition that already exist. Then you can think about practical requirements such as developing a good website and of course, marketing your box to your target audience.
Find your niche
Some of the most popular subscription boxes include food boxes, shaving boxes, and beauty boxes, but the possibilities are (almost) endless — just as long as it fits inside a reasonably-sized box! Over the past decade, the range of subscription boxes has grown enormously, so whether your idea is tailored to crafters, coffee lovers, or fitness enthusiasts, you can create your own box for pretty much any and every purpose.
Of course, the more niche your product offering is the smaller your available market. That said, it’s likely there are fewer competing brands operating in more niche areas, so you need to strike the right balance between demand and competition. Do you have an idea that fills a gap in the market? What’s new or different about your idea? Don’t be afraid to think outside of the box.
Research your ideal customer
Another important step is to research your ideal customer. Once you have a few subscription box ideas, think about who would be interested in your products. Demographics are a key component of your target market — encompassing factors like age, sex, marital status, and income — as they will help you understand your ideal customer’s needs and interests.
Your subscription box won’t get off to the best start if you don’t consider your ideal customer. Take some time to create a persona, as this information can also be used in your marketing strategy to generate leads and build brand awareness. Once you have a good idea of who your ideal customer is, this is something you can keep referring back to.
Figure out your operational plans
Creating a subscription box includes a lot of operational planning. From storage to packing to shipping, you have to consider how you’re going to get your subscription box from A to B, as well as how you’re going to produce or source the products contained in them — and the packaging they come in.
Your operations have to run smoothly or you risk disappointing consumers by offering a sub-par service. Each month, your subscribers will be expecting a box to arrive at their door on time and for it to meet their expectations, so be sure to calculate the costs involved and choose the right suppliers. Shop around before deciding on things like courier services to find an option that fits your exact needs.
Build your website
Every subscription box needs a good website. As a new subscription box business, this means creating a website that encompasses a clean yet attractive design, includes helpful yet engaging content, and has the tools your customers need to enable them to manage their subscriptions from their devices without hassle.
To enable a seamless payment and billing experience, for example, you can partner with third-party service providers that enable you to automate recurring payments. This will keep things simple and convenient for your customers, and enable you to focus on important aspects such as marketing and generating great content rather than dealing with payment issues. Read this guide to understand how a recurring billing process should work.
Market your subscription
When marketing your subscription box, the initial aim is to increase your brand awareness. Social media is a great way of increasing your reach and getting your name out there. Instagram is ideal for sharing aesthetic content — such as creative flat lays of each box — while TikTok can earn you a global audience! Just remember to use the right hashtags to target your social posts appropriately.
How about reaching out to influencers, too? If you have a large marketing budget, sending out boxes to influencers in your niche can gain you social endorsements — find out who the big players are in your space and add value to them.
What are the benefits of a subscription box business?
There are many benefits of launching your own subscription box business. The subscription business model is a great way of securing predictable income while providing your customers with a cost-effective treat every month — win-win!
Here are three of the top benefits of subscription boxes you should know about:
Predictable revenue from customers
When someone subscribes to your box, it’s very easy to calculate your predicted income each month. Depending on which packages you offer, some subscribers may be locked into an annual subscription, or they may have the option to skip months here and there, depending on their needs.
Either way, knowing how much money is coming in will help you streamline your business so you can reinvest in its growth. Take Spotify, for example: their subscriber base has increased dramatically in the last few years and has more than doubled since early 2017. While you may not enjoy a similar level of global success, you can begin building a loyal customer base and a reliable income stream.
Subscription boxes represent future eCommerce trends
The subscription model has become more popular than ever before. Existing subscription brands grew their overall customer base by 31% in 2021 alone, as customers enjoy the personalized experience and cost-saving benefits of subscribing to a product or service they love.
Subscription boxes are set to become the new standard in shopping as e-commerce grows. Many brands are adding subscription boxes to their sites, as they’re quickly becoming the preferred way for people to shop due to the convenience and flexibility they provide.
A great way of fostering collaborations and partnerships
Have you considered collaborating with other similar brands to create diverse boxes? By teaming up with other brands in your niche, you can take your subscription box game to a whole new level and enhance your own brand’s profile.
Perhaps selling a limited edition collaboration box could help you gain more customers. For example, if you’re selling a coffee subscription, why not collaborate with other independent coffee brands by including their items in your box such as coffee beans, thermal cups, or mugs? When they share the collaboration on their socials and websites, you’ll reach a wider audience.
Starting a subscription box business won’t be easy, by any means, but with a lot of planning, hard work, and a high-quality service, you can quickly scale up and gain loyal subscribers across the country and beyond.