How to Start a Subscription Box Business That Sells
For one, the boxes help an online store win over customers. They can provide much-needed fun or crucial convenience. You can send customers monthly curations of your products, like beauty boxes or farm boxes, or replenish the products they need regularly, like stationery or shaving kits.
By selling subscriptions, you can also build a reliable, consistent income, reduce churn and improve your customer lifetime value (LTV) with repeat purchases. Plus, by creating a shareable unboxing experience, you can get invaluable word-of-mouth marketing.
If you’re ready, start your subscription box business now. If you want to learn more about the industry and best practices, read on.
How to Start a Subscription Box Company in 7 Smart Steps:
01. Choose your concept
Before you get into the details of selling product subscriptions, you’ll need a subscription box business plan. What kind of subscription box are you selling, and why? What unique value are you offering your customers? Let’s start with the basics.
What is a subscription box?
Subscription boxes are a type of recurring order that online stores can offer. Subscriptions often come in multiple-product boxes, though they can also consist of a single product and arrive in other packaging.
There are two main business models for subscriptions:
Curated boxes: Different products that you choose to send with each shipment. You can either let customers know what’s arriving or send surprise mystery boxes.
Recurring orders: Repeated, regular orders of a specific product you sell. These replenish customers’ stock of your product, so it’s a more popular model for disposable supplies and perishable goods.
Find your subscription box niche
Make sure to corner a specific market so your subscription box stands out. The subscriptions industry is growing by 100% each year, which means it’s as lucrative as it is competitive.
Craft an exceptional subscription service by taking a look at the competitors in your industry. If you want to sell beauty boxes, for example, conduct a competitive analysis of other successful cosmetics companies selling subscriptions. Spot the market potential they leave open:
Who is their audience? Which consumer audiences are they missing?
What market are they targeting? Are there untapped geos, demographics or market segments where your subscription business can step in?
Look at their customer reviews. What do customers love about their boxes, and what weaknesses can you improve?
To target your niche, develop a detailed buyer persona. Determine the age range, motivations, interests and spending habits of your niche. This information will help you build and personalize your subscription box business.
Keep in mind that an 85 year old grandparent in Wyoming will likely want a different grocery box than a 23 year old hipster in New York. Use your persona’s desires and needs to determine your subscription frequency, box contents and branding.
As you grow your subscription box business, keep checking that you’re addressing your niche. Stay dynamic—if you learn more about your niche market as you sell, adjust your subscription business in turn.
With your niche established, you can choose what type of products to include in your subscription box.
Popular product ideas for starting a subscription box business:
Food and grocery: Meal kits, farm produce, coffee roasts, cocktails, baby foods, spice mixes
Health and beauty: Beauty boxes, haircare, shaving kits, vitamins and supplements
Home and lifestyle: Cleaning supplies, plants, petcare, toys, clothing, craft kits
Office supplies: Calendars, stationery, stickers, printer ink, notebooks, planners
02. Start your online store
Next, you’ll want to start an online store to sell your product subscriptions.
If you’re adding subscriptions to an existing online store, go ahead and skip to step 3. If not, here’s a quick guide to choosing a platform and building your eCommerce website.
What to look for in a web platform for subscription businesses:
a. Design the best customer experience
Your website will act as a technical storefront and build your brand credibility. You’ll want a web platform with professionally designed online store templates. That way, you can customize a website that’s already optimized for customer experience, with strategic CTAs, page layouts, cart page and more. If you’re working with a web designer or are coming in with your own skills, opt for a platform with advanced design capabilities.
b. Get more subscribers
Choose a platform with built-in marketing tools that will help you grow your subscription sales. With Wix eCommerce, for example, you can give shoppers flexible order options on one product page, like one-time orders or multiple subscription packages. Your shoppers can also manage their own subscriptions from a login-only members area.
c. Manage fulfillment smoothly
With so many moving pieces, fulfilling subscription orders can get hectic. Make sure your platform offers professional eCommerce features that help you manage every order efficiently. Firstly, choose a platform that auto-renews subscription orders for you. When subscriptions need to be fulfilled, the platform will automatically create new orders on your dashboard and charge your customers.
Secondly, make sure your platform notifies you when each new order needs to be fulfilled. We suggest going with Wix eCommerce, which offers these fulfillment features and an integrated orders dashboard, so you can manage single-product and subscription orders in one place.
03. Build your subscription box
Once you have your concept and online store set, it’s time to build the subscription itself. This first subscription will be a prototype. Of course, you’ll want to succeed, but you’re also leaving room for insights and adjustments. Start with these questions:
How frequent is your subscription?
Do you want to offer your subscription box on a daily, monthly or yearly basis? This can depend on:
Budget: How often can you afford to ship your products, considering shipping costs and the price of your packaging?
Products: How often do your customers need your products? How long will your products last?
Buzz: To keep your customers enthusiastic about your subscriptions, you’ll need to strike the balance between reliability and rarity. How often should you ship to remain on your customers’ minds while still keeping your product exciting?
What’s in your subscription box?
Aim for 5-7 products for curation boxes. This first shipment will give customers an impression of your taste, your product quality and your brand. Start boxes with a mix of popular products and less-known products that you want to highlight. Vary your product sizes, colors or flavors to give your shipment an abundant, “eye candy” appeal.
Tailor your replenishment boxes to the shipment frequency. Calculate how long your products will need to last until customers receive their next shipment. How long will a shaving kit last? How many ounces of tea do customers need per week?
Where can you find product suppliers for your subscriptions?
If you’re outsourcing products for your subscriptions, curate brands based on what you’ve seen and love. This can either be inspired by other subscription boxes you’ve seen from competitors, or by products you’ve used yourself.
Contact these suppliers and negotiate a price that works for your budget. If you haven’t used their products yet, order samples to ensure quality and understand what you’re sending your customers. When you can personally vouch for the products you sell, you can provide better customer service and marketing.
To streamline order fulfillment, connect your eCommerce site to your manufacturer and automatically notify them when you need new stock.
How much should your product subscription cost?
Offer your subscription box for less than its total worth, especially if you also sell the products individually. Highlight the price difference on your product page with a percentage discount or by comparing the products’ total value with your box price.
Although discounts seem counterintuitive, they can actually help increase your revenue over time. Well-priced boxes are more likely to garner repeat customers and brand loyalty.
When determining your subscription discount, learn from your successful competitors. Keep your pricing consistent with your industry—similar subscription boxes can teach you what your potential customers are willing to spend. Also make sure your profit margin covers your practical business costs, like production, packaging, storage, fulfillment and your eComm platform’s fees.
04. Develop branding and packaging
With subscriptions, the products included can be just as crucial as the hype and packaging that surround them. Smart eCommerce branding attracts new customers and builds brand trust. First, cover the basics of a strong online brand, like a custom domain and a memorable logo. Then, develop your unboxing experience.
What is an unboxing experience?
An unboxing experience is what customers see and feel when they open your subscription box. Brands have stepped up their unboxing game in the past few years, including reusable packaging and gamified cardboard inserts.
When customers open your subscription boxes, you want them to feel delighted. Emotion is a powerful driver for purchase, and simply put, happy customers will order again.
Moreover, though, a unique experience begs to be shared. Send customers a beautiful box they’ll want their social media followers to see. That way, you set up a strong source of user-generated content and word-of-mouth marketing. Packaging will help you grow your group of dedicated customers and build brand awareness.
Subscription box design ideas
Your unboxing experience will vary based on your brand and products. Get creative with these packaging elements:
Use eco-friendly materials: 60-70% of consumers say they’d be willing to pay more for a brand that uses sustainable or reusable packaging. Include minimal, recyclable materials to support both your sales and the earth. Encourage your customers to reuse and feel good about ordering from an eco-conscious company.
Get playful: Include games, clever notes, creative confetti and more to add fun to your customer’s day. Adjust the tone here based on your brand—if your products are more refined, for example, opt for consistent, bright brand colors and sharp, clever messaging on your inserts.
Surprise your subscribers: Consider adding a lightweight, unexpected product in the box like a branded coaster or laptop sticker. These elements of surprise excite your customers while spreading the word about your business.
Tag your accounts: Write your brands’ social media account handles on your packaging and encourage customers to tag your business in their posts. This will help new customers find you, and help you find and repost the best user-generated content.
Beautiful packaging lends itself to great photo ops. Be sure to take high quality photos of your boxes to showcase on your business’s social channels and product pages.
05. Set up your business end-to-end
Although payments, tax and shipping aren’t as glamorous as your box contents and branding, they’re just as important to your business. Subscription boxes require multiple moving parts because of recurring orders and varying products per box. Plan ahead efficiently.
Payments: Accept secure payments on your site through methods your customers know and trust, like major credit cards and Paypal. Not all payment providers support recurring payments—make sure yours does.
Tax: Calculate sales tax automatically so your store stays compliant with minimal maintenance. Give your customers geo-specific, updated tax rates even before they check out.
Fulfillment: Prepare your entire fulfillment process in advance so it runs smoothly once your subscription goes live. Place a test order to get a precise estimate of timing. If anything goes wrong, be it an extended shipping time or a missing product, test again. Perfect the process before the subscription reaches your customers.
Shipping and returns: Clarify your rules in advance and include them in your site footer. As you write out your shipping and return policy, imagine and answer your customers’ questions: What are your shipping fees? Do you ship internationally? How long after purchasing can a customer return a box? Do you refund subscriptions, and under what circumstances?
06. Start selling with strategic marketing
Your subscription box is almost ready to sell. Start promoting your subscription through email marketing and social media to direct shoppers to your site. Consider building suspense before launching with a countdown, revealing one product in the subscription box each day.
Next, take your subscription business live online and start accepting orders!
To attract your first shoppers and keep growing your audience, run a Facebook ads campaign. The more specific you can tailor your ad’s target audience, the better you can reach the shoppers who convert. Draw from your subscription box niche research here. Write captions that speak directly to the needs and wants of your audience.
If you’ve built a great unboxing experience, consider reaching out to bloggers and influencers to promote your subscriptions. 62% of shoppers watch unboxing clips while researching a product. By partnering with content creators, you can build your brand credibility and expand your commercial reach.
07. Strengthen your subscriptions
Your subscription box company is off the ground! To help it soar, keep learning and developing your subscriptions.
Subscriptions are ideal ground for testing because you’re shipping to the same audience on a recurring basis. Create your strongest offering by continually listening to customer feedback.
After every box shipment, provide customers with clear outlets to tell you what they loved, what didn’t work and what they were missing:
Collect positive reviews on your online store and product pages. This creates a bank of word-of-mouth marketing and testimonials, and can also give your business actionable feedback.
Establish strong customer service with onsite chat. Customers will get the answers and recommendations they need, and you’ll get more data to develop stronger, more desirable subscriptions.
Ready to create a steady cash flow and spark a loyal customer base? Start your subscription box business now.
Tova is a content marketer with a passion for compelling business stories. Perhaps more obsessively than others, she watches the Super Bowl for the ads.