How To Start A Subscription Box Business
With the growth in the subscription business models, there are huge incentives for companies to shift what traditionally would be one-time purchases into stable recurring revenue month after month or year after year.
So the question is how do you start a box subscription business?
In this article we will share 6 simple steps needed to start your first box subscription business:
- Start with the RIGHT idea
- Develop your prototype
- Set up your website
- Set up your marketing strategy
- Perfect your operations
- Strength your subscriptions
Step 1: Start with the RIGHT idea
What problem is my business solving?
Start with the problem and then work backwards towards your solution. The goal is to create something that brings value to your customers month after month. Think about things that bridge the gap between what you are passionate about and solving a problem for your customers.
If you are still stuck on answers to what the problem is you are trying to solve, keep it broad and work backwards! This could be something like; I am passionate about x but struggling with y, so there is a need for z.
Who is my audience?
Once you’ve defined the problem you’re trying to solve, spend some time thinking about your customers. Start thinking about it at a granular level; personas, buyer habits, interests, age, income levels, and preferred social platforms.
Creating these customer personas will drive future business decisions that will range from price to design. The best way to find out who your customers are is through market research. You may have an opinion on who your customers are but surveys will help turn speculation into educated decisions!
Who are my competitors?
After you’ve defined your problem and who your customers are it’s important to get the landscape of the business. Do a competitive analysis, find gaps in your market, and stand out by delivering greater value than your competitors.
The best subscription box businesses are not always totally unique but those that are able to improve an existing concept being delivered to the market today. Stand out by marketing those improvements vs. your competitors effectively and take some of that market share for your business!
Ask yourself these hard questions and you’ll be setting yourself up for success. If you haven’t, clearly define these answers, write it out and you’ll be helping yourself in the long run.
Step 2: Develop your prototype
Now you have a good idea of what your problem is, who your audience is, and the competitive landscape it’s time to start building. The process of building your prototype will fall into product selection, box type, and packing materials.
Keep in mind your own personal unboxing experiences with packaged products you’ve received in the past. An unboxing experience is what the customers will see and feel once they’ve opened your subscription box.
Try different ideas in the prototype and don’t be afraid to push the limits to creativity. Remember this is the first step in the experience with your customers, display your brand and personality through creativity messaging and build something that makes your users feel comfortable and excited about your product every step of the way.
Step 3: Set up your website
Next you’ll want to start an online store to sell your product subscriptions. Your website is the foundation of your box business and the public face of your brand. Your marketing, customer service, and every customer interaction will revolve around your site.
Two great options for marketplaces for you to begin selling are on; Cratejoy and Subbly. These popular platforms will help you promote your products and services and include tools to help you build your website.
Many ecommerce websites are also available for use such as Shopify, WooCommerce, and Magento will help you manage your sales and subscribers in a single place.
Keep in mind that you should not get stuck in the weeds of building the perfect website as there will always be room for improvement and should not prevent you from moving forward in the process of launching your business.
Step 4: Set up your marketing strategy
You’ve got the main concepts now it’s time to build the hype around your business. This is the time to start building your online presence and reaching the community of people to purchase your products. The best place to market will depend on your customers and you’ll be utilizing tools such as ; Facebooks Ads, Google Ads, Instagram, Pinterest, and Twitter Ads. Start by promoting your subscriptions through email marketing and social media to drive traffic to your website. Consider promoting your business through exclusive offers and only revealing one item at a time.
Using a small budget a/b test various ad types and invest in good content creation to draw attention. Sample different subscription box types and reach out to a community of bloggers who can talk them up.
Explore partnerships with content creators to build your brand awareness and gain commercial exposure. Influencer marketing is a new digital strategy and can help brands explode.
Step 5: Perfect your operations
Congratulations by this point you should have received your first order. Organization is the name of the game here.
It’s important to always communicate with your customers both before and after their purchase. Making sure they are aware of their shipment date and sending regular status updates.
Analyze your operations at first and leave room for growth. After you’ve developed your business a popular option is to consider outsourcing to fulfilment companies. At some point, packaging your boxes in your garage and printing shipping labels isn’t going to cut it.
Step 6: Strengthen your subscriptions
As you grow your business you’ll have plenty of options to learn your subscription model. Learn from your churn and create an exit survey to help you understand why someone cancels.
Send regular emails to your subscribers and offer incentives for other customer referrals and repeat business. Regular communication to your subscribers about upcoming product releases is a sure way to build interest in your box.