5 Reasons to Start a Subscription box

By Cheyenne Smith

Whether you’re an established e-comm entrepreneur or revving up to launch your first business, there’s one revenue model you don’t want to overlook: subscription commerce.

After all, the subscription box industry continues to grow in both supply and demand, and the business model’s reliance on recurring revenue makes it easier for companies to scale quickly or introduce new revenue streams to existing businesses.

Interested in learning more about the benefits of starting a subscription box? Check out our top 5 below:

Recurring revenue model

Ask any business owner about their top pain points and it’s likely “customer acquisition” will come up again and again. And though subscription boxes absolutely need new customers to grow, the issue of losing customers after each one time purchase is small peanuts compared to traditional E-commerce.

As a subscription box owner, once you acquire a customer, the right mix of exciting products, stellar customer service, and nurture-focused marketing can transform a one-time purchase into a lifelong customer. That’s right, the one time cost of acquiring customers automatically transforms into recurring revenue month after month when your business is built on subscription or membership rather than single transactions.

Growing Industry

According to the Harvard Business Review, the subscription industry has grown more than 200% every year since 2011. Moreso, in 2017 alone there were more than 2,000 subscription businesses with 11 million customers – and that number continues to climb.

The beauty of subscription commerce is that there is room for as many different offerings as there are interests. And whether you plan to sell something high level like makeup samples, or something more niche like cruelty-free skincare –  as long as there is an enthusiastic audience, your subscription box idea likely has legs to stand on. If you’re looking to validate your idea, Cratejoy’s subscription box marketplace is home to over 1500 boxes in 84 different categories and is a great place to find your market fit.

Easy-to-use tools

If you’re new to subscription box businesses, a cursory search will yield a few different results for starting your own box. The main things you’ll need to keep in mind when choosing your subscription box platform are rebilling, shipping, and customer management tools that work with the subscription business flow.

From there, SaaS platforms like Cratejoy will offer extra add ons or marketing opportunities to get your box in front of enthusiastic audiences. Ease of use will be especially important as your business scales, so when you’re looking at APIs vs all-in-one solutions, keep in mind your own level of tech sophistication and the reliability of your tools in conjunction with one another.

Enthusiastic customer base ( esp. for passion based businesses)

As we mentioned in our “Growing Industry” section, subscription boxes are most successful when they can tap into an enthusiastic customer base or existing community. Scribbler, a subscription box for writers, was able to generate more than $10k in 10 days by launching to a writer community that was hungry for tools by authors for authors.

Between social media marketing and an existing audience for aspiring writers, Scribbler was able to capitalize on the intersection of product fit and customer interest. This subscription box success story is a common thread among the businesses that are able to scale and can be seen across industries like fandom, stickers, outdoor supplies, and more.

Low barriers to entry (experience, funding, time)

Even with a great idea and hefty potential customer base, sometimes resources can get in the way of launching a business. And whether that resource is time, money, or bandwidth, subscription commerce offers one of the easiest, low-cost methods to getting started.

When it comes to price, most new subscription box entrepreneurs will need to pay for their platform tools up front – but with a proper prelaunch or presale, a savvy box owner can use their first month’s earnings to pay for the box and products themselves. Within a month, little up front capital can plant the seeds for a healthy, growing business.

Looking for more information on subscription commerce?

Check out Cratejoy’s comprehensive guide on “How to Start a Subscription Box” or visit Cratejoy.com/sell for more information on tools and features.

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