Start A Digital Subscription Business - Business Ideas
Digital subscription models have become increasingly popular over the last few years. These businesses can offer anything from online courses to software, digital downloads, or access to content.
Customers typically pay a monthly or yearly fee for access to content, products, and services.
This typically involves some form of recurring billing where the consumer is billed at a predetermined interval for as long as they continue using the service.
Starting a digital subscription business requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell digital subscription, or selling digital subscription online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a digital subscription business ➜
Key Stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $0 | $7,000 |
| Employee & Freelancer Expenses | $151 | $352 |
| Website Costs | $223 | $7,215 |
| Business Formation Fees | $600 | $4,700 |
| Software Expenses | $150 | $2,794 |
| Advertising & Marketing Costs | $0 | $3,000 |
| Total Startup Costs | $1,124 | $25,061 |
Case Studies
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$15K/mo
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$500K/mo
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$155K/mo
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$6K/mo
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
WSJ Subscription | subscription.wsj.com | #419 |
|
WorthPoint | worthpoint.com | #1,768 |
|
PressReader | pressreader.com | #4,767 |
|
Digital River | digitalriver.com | #35,892 |
|
International Code Council | iccsafe.org | #45,159 |
|
The West Australian | thewest.com.au | #49,433 |
|
Dark Horse Comics | darkhorse.com | #87,609 |
|
Press and Journal | pressandjournal.co.uk | #129,822 |
|
MiloTreeCart | milotree.com | #228,765 |
|
Coffee and Contracts | coffeecontracts.com | #302,266 |
|
Draftss | draftss.com | #324,805 |
Pros & Cons
| Pros | Description |
|---|---|
| Flexibility | You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
| Rewarding work | Starting a digital subscription business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about. |
| Traffic to your website | A digital subscription business gives people a reason to visit your website and to keep coming back to you! |
| Meaningful business connections | You never know who you will meet as a digital subscription business. This could be the start of an incredible business opportunity! |
| High customer retention rates | Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Gain exposure and experience | This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you! |
| Cons | Description |
|---|---|
| Motivation of employees | If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees. |
| Longer Sales Process | A digital subscription business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers. |
| Low margins | The gross margins for your digital subscription business are typically around 30%, which can make it more challenging to incur new expenses and maintain profitability. |
| High employee turnover | In the digital subscription business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
| Taxes | As a digital subscription business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it. |
| High overhead expenses | With starting a digital subscription business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below. |
Marketing Ideas
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1
Affiliate Program
Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.
Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.
The affiliate typically gets a unique link where clicks and conversions can be tracked.
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2
Direct Sales
Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.
For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
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3
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
Hey! 👋I'm Pat Walls, the founder of Starter Story.
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