Start A Subscription Box Business - Business Ideas
A subscription box business is a type of business where customers subscribe to receive a niche set of products on a monthly basis. Subscription boxes are in high demand today as customers enjoy receiving a variety of products from various brands.
Some of the benefits to starting a subscription box business are:
- The revenue is predictable as it is a recurring business
- Adds more value to customer service as this creates a unique shopping experience
- Customers can access exclusive products and also customize them based on their interest
- Profit margin can range from 40%-60%
You can start a subscription box business by understanding the real market needs. Because of its highly competitive nature, it is important to find your niche and provide quality products based on your customer's interests. Additionally, it is important to decide what items should go in your box. The quantity, size, and design of the box plays key role in grabbing the customer's attention. Apart from the basics, you should also make sure that the items are bright and colorful.
Lastly, building a good relationship with the fulfillment companies will be profitable as this business is a routine task. If you have 100 subscribers, you will need a service that will pick up and deliver your products. In addition to this, marketing your service can be an advantage. In order to promote the service, you can build your website, create special offers to attract and retain customers.
Starting a subscription box business requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell subscription box, or selling subscription box 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 subscription box business ➜
Key Stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $0 | $7,000 |
| Inventory Expenses | $350 | $14,750 |
| Software Expenses | $150 | $2,794 |
| Website Costs | $13 | $215 |
| Advertising & Marketing Costs | $0 | $2,450 |
| Total Startup Costs | $513 | $27,209 |
Case Studies
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$400/mo
•
$20K/mo
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$60K/mo
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$350K/mo
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
Smithsonian Magazine | smithsonianmag.com | #6,893 |
|
Vikatan | vikatan.com | #17,948 |
|
Birchbox | birchbox.com | #48,571 |
|
ConseCrate | consecrate.cratejoy.com | #52,046 |
|
Colorado Springs Gazette | gazette.com | #55,763 |
|
Flaviar | flaviar.com | #56,813 |
|
Urban Tastebud | urbantastebud.com | #57,002 |
|
BOX | box.co.uk | #57,756 |
|
Loot Crate | lootcrate.com | #59,584 |
|
Bokksu | bokksu.com | #65,228 |
|
Daily High Club | dailyhighclub.com | #130,248 |
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. |
| Ability to start your business from home | It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning! |
| Little startup costs required | The cost to start a subscription box business costs significantly less money than most businesses, ranging anywhere from 12 to 27,209. |
| Rewarding work | Starting a subscription box 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. |
| Scalable | With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers. |
| Traffic to your website | A subscription box business gives people a reason to visit your website and to keep coming back to you! |
| Cons | Description |
|---|---|
| Crowded Space | Competition is high when it comes to your subscription box business, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies. |
| Finding The Right Supplier | Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section. |
| Security Issues | With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road. |
| Lack of benefits | With a subscription box business, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming. |
| Isolation | Often times, as a subscription box business, you typically work alone and do not have much face-to-face interaction with other team members. |
| Taxes | As a subscription box 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. |
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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