Last updated on July 16th, 2018 at 04:26 am
How To Start A Subscription Box Business – Important Things To Consider
If you are wondering how to start a subscription box business, there are a few important things to things to consider.
This post may contain affiliate links, which is at no cost to you. Disclosure.
Starting a subscription box business can be a very smart move, considering the overhead cost to run it is low, and the income stream is on a recurring basis, allowing yourself a lucrative profit margin.
Nowadays you have the opportunity to reach millions of customers thanks to subscription box marketplaces like Cratejoy, as they are the leader and all-inclusive platform to help run your subscription box business. You can try out a 14 Day Free Trial of Cratejoy as a seller here.
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Starting A Subscription Box Business
Although it can seem overwhelming at first, when starting any type of business, know that you CAN develop your idea into a real-life revenue source. If you have the dedication to learn and work, and the patience to market it and see it through, your subscription box business has the potential to be something really great.
Use this guide to help you streamline your ideas and develop your subscription box concept into a profitable business!
How To Start A Subscription Box Business – Important Things To Consider
In this guide, we will cover all of these important topics related to how to start a subscription box business:
- Nailing Down Your Niche
- Researching Your Market
- Subscription Box Type
- Website, Subscribers & Recurring Payment Gateway
- Box Curation: Vendors & Wholesale Acquisition
- Pricing & Shipping
- Packaging & Box Design
- Marketing, Advertising, Influencers & Bloggers
- Choosing Your Platform, Cratejoy Vs Subbly
How To Start A Subscription Box Business
1. Nail Down Your Niche
Just like when starting a profitable blog, the more niche you can be, the more money you are likely to make.
Why is this? Defining a niche and being very specific about the thing you will be known for builds your authority while building a community of targeted followers with a shared interest in one product.
When you know what your audience likes, you can sell that thing to them over and over.
Some examples of successful, super-niched-down subscription box companies are Vegan Cuts, which delivers vegan, cruelty-free makeup and beauty products, and BarkBox, a super popular subscription box for dogs.
Once you have decided on the niche for your subscription box, you can start researching the niche, your target market, and your soon-to-be competitors.
There are some easy ways to research your market
- Use BuzzSumo to see what is being shared online about your niche
- Check out the Cratejoy Marketplace to see what boxes are popular, and also investigate what is missing in the market, which your box could provide
- Use Sendible to find, monitor and analyze your competitors
Researching your market is important, but the research stage doesn’t have to be all that time-consuming. In fact, I would recommend that you don’t spend too much time in this phase, as it’s easy to get lost in research-mode, and lose sight of (or lose momentum for) your launch!
3. Subscription Box Type
You can create a subscription box for pretty much anything. But the most successful ones are the ones that address a problem, and then solve that problem with their product.
Ask Yourself: How Does Your Subscription Box Solve Your Customer’s Problem?
Typically, there are two types of subscription boxes, Convenience Boxes, and Discovery Boxes.
Convenience boxes deliver the same product each month, albeit with some variations to customers who need a product on a recurring basis. This service is known as ‘convenience’ because it saves the customer from having to go buy it from a store each month.
When you think of something that a customer would need on a monthly basis, the first thing that may come to mind is, um, tampons, hello!
Ellebox is a subscription box that tackles Mother Nature’s ‘gift’ with style. They send their customers a box of organic tampons (and chocolate, teas, and other period-time must-haves!) each month. Having tampons delivered to your door is a huge time saver.
More great monthly convenience boxes are BloomsyBox, which is a fresh flower delivery service, and Happy Legs Club which delivers razors and shaving items.
I am also a big fan of clothing convenience boxes. With the rise in popularity of minimalism and the concept of streamlining one’s closet for a minimalist capsule wardrobe, it’s no wonder that clothing rental is such a hot thing these days.
Fashion rental subscription Le Tote does this well, as they provide customers with stylish clothing items that can be worn and returned.
They even rent stylish maternity wear, solving yet another convenience issue, as anyone who has been pregnant knows the frustration of having to shop for maternity wear in-store. Using Le Tote is also cost-effective, as you simply return the maternity items when you no longer fit them.
Discovery boxes are ones that help customers discover new products, often as surprises. Discovery boxes are great because the element of surprise builds excitement for the customer and keeps them in anticipation for the next month.
Probably one of the most well-known Discovery boxes is FabFitFun, a subscription service that sends lifestyle, beauty and wellness items four times a year.
FabFitFun builds up momentum and excitement for each season’s box by running extensive advertising and influencer marketing campaigns of ‘spoilers’ and sneak-peek unboxings. I cover how you can do this in detail, further down in this post.
Other popular Discovery type boxes are Box Of Style, which sends luxury items curated by celebrity designer Rachel Zoe, and GlossyBox, which sends a selection of five beauty items from niche, high-end, and emerging brands.
4. Website & Recurring Payment Gateway
Before you even launch your subscription box, you should set up your website and start collecting email addresses right away.
I recommend purchasing your domain name and registering your hosting with Bluehost as soon as you’ve decided on a name for your company/box. This link gives you 65% off.
Enroll in this free course, it will show you step by step how to set up your website and blog correctly in a matter of minutes.
Or, you can have me set up your website for you. I build high-quality websites and offer amazing rates! Message me here!
Even if you just have one landing page set up, you can start building momentum by offering a pre-sale incentive and collecting email addresses, while you work on everything else before the launch.
Another important reason that you want a website is so that you can have a blog, and use the blog to drive traffic to your sales pages.
You can have access to my members-only resource library of tips, checklists, ebooks and other helpful tools on how to blog and how to make money blogging by signing up here, for free:
Recurring Payments Gateway
You should have your own website, as well as be on Cratejoy too, as they have a massive marketplace of customers for you to take advantage of. You can use Cratejoy‘s recurring payment gateway to easily and seamlessly integrate subscription payments on your own website as well.
Collecting Emails & Building Your List
I recommend using ConvertKit to collect emails and easily send newsletters to get your customers excited about your launch (and keep them excited for each month’s box!) You can get a free month trial of ConvertKit here.
5. Box Curation: Vendors & Wholesale Acquisition
Whether you decide on a Discovery or Convenience type box, remember that you are curating an experience for your customer, the items need to make the customer feel special in some sort of way.
When it comes to choosing the items for your subscription box, consider how each item adds to the overall experience you are giving your customers. How are your items different from any other box? How are they better?
Some places to source vendors and items for your subscription box:
Hubba is a great place to find vendors (wholesale suppliers). It is a free social network for businesses, where you can search for products and speak directly with the company reps to negotiate deals.
Etsy is a massive marketplace of creators.
6. Pricing & Shipping
Deciding on how you will price your subscription box can be difficult. Shipping can be a huge cost too, so you need to take into consideration if the shipping fee will be included in the price of the box, or if the customer pays shipping on top of the price of the box. The cost of shipping goes up by weight, so you don’t want to include too many heavy items in your box.
Also, will you be shipping your subscription box Internationally? That is another expense to think about and factor into your prices.
Once you negotiate a good price with your wholesale vendors, and figure out how much shipping will be, and have researched what your competitors are charging for their boxes, you can start to see what price makes sense for your subscription box.
According to Cratejoy:
If you plan to sell a box in a $25-30 price range, the price of your products should be $9-12 or less. This might seem low, but there’s a number of costs associated with sourcing the box itself and running the business.
Use this free subscription box pricing calculator to help you figure how best to price your subscription box.
Another thing to consider when it comes to pricing, is if you intend to offer incentives. An incentive could be an additional product as a bonus to entice more people to subscribe.
Luxury Boxes like Robb Vices and Box Of Style are famous for this, as they both offer expensive bonuses for free when you sign up at any given time.
Robb Vices offers new subscribers a complimentary bottle of Highspire Rye Whiskey when you join here. Offering an incentive like this is a great way to encourage more sales, but be aware that offering more items increases the weight of your customer’s subscription box, which means higher shipping fees for you.
7. Packaging And Box Design
The design of your subscription box adds to the overall experience you are curating for your customer. Take into consideration that the colors and look of the box design fit your branding.
You don’t want to skimp on the design of your box. The better it looks, the more likely people are to share their unboxings of it on social media.
You can create custom printed tissue paper at Noissue. Check out this post for more info.
Cratejoy offers its members a box design service that handles everything you need for box designs.
8. Marketing, Influencers & Bloggers
There is an ancient proverb:
If a subscription box launches and no influencers posted an unboxing review of it, did the subscription box launch happen at all?
Ok, that’s obviously not a real proverb, but it still holds up. You need people to be blogging and Instagramming about your subscription box, if you want people to discover it!
It’s a good idea to set up an affiliate program for your subscription box business too, then you can invite bloggers and influencers to join it, and soon you will have an army of promoters on your side, getting your subscription box noticed and sold online.
Another helpful thing about Cratejoy is that they have a popular affiliate program that brings in more sales for you, without you having to do a thing. The Cratejoy affiliate program handles paying out affiliates to promote and sell your products, and this doesn’t cost you anything, either.
I have this handy guide all about creating a social media marketing plan that you should definitely read!
9. Choosing Your Platform, Cratejoy Vs Subbly
There are two main subscription box business platforms used to sell and they are Cratejoy and Subbly.
As mentioned previously, you will want to use one of these platforms in addition to having your own website.
When comparing the two, I find that Cratejoy offers more, for a more affordable price. The fact that it has it’s own marketplace is a huge selling point for me, as it is a crucial way for subscription boxes to get discovered, as they have millions of customers who shop on the marketplace. Subbly doesn’t have a marketplace, although they do offer some great features.
For more information about these two platforms, including the differences in pricing and transaction fees, read this comprehensive post: Cratejoy vs Subbly Review
How To Start A Subscription Box Infograph:
So, Are You All Set To Start A Subscription Box Business?
I hope this guide has given you some insight into how to start a subscription box business! Let’s keep the conversation going, follow me on Instagram and keep me updated how your subscription box business develops!
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