Thinking of launching a subscription box? Here's what you need to know
The subscription box industry has become big business for budding entrepreneurs looking to find a new way to bring their products into customers’ homes. These services are often run by people who are passionate about the products they sell and just as excited about getting it into the hands of consumers who care as much as they do. The exponential growth in popularity of companies like Dollar Shave Club, HelloFresh, or Loot Crate goes beyond specialist interests, though, spanning across all age ranges and demographics.
With such a rise in interest in the subscription business model, you’d be forgiven for wanting to get your foot in the door, and there’s every chance your company would benefit from offering weekly or monthly boxes of your products. However, before you jump right in, here are a few things you should bear in mind before sending out the best bits of your stock to customers.
Know your product
As a business owner, you will of course already be familiar with the products you sell. However, the subscription box marketplace has shown that real expertise is the key to success. According to McKinsey research, 55% of subscription box users look to them for “a curated selection of…items” which offer new discoveries for them to enjoy on a weekly basis. The bespoke nature of these boxes also allows you to engage directly with your customers, and gives you a better idea of what individual subscribers do and don’t want from your business each month.
The Cheese Geek, for example, promises such a range of different dairy delights that it guarantees “you’ll never receive the same cheese twice” in each monthly cheese subscription box, but also lets subscribers rule out any types of cheese they know they don’t like. Similarly, while subscribers can take their pick of the literature on offer from the Book Of The Month Club boxes, all options are chosen by a “panel of judges”, to ensure that everyone chooses from only the best novels during any given month.
Be timeless with your product
There is little that the most popular subscription boxes have in common, but one thing’s for sure—they don’t conform to trends. The services of the major boxes are broad enough to have a mass appeal, allowing users to tailor them to their own needs, rather than starting with a narrow scope. Not only that, but if you choose to establish a subscription service for something too faddish, you may end up losing customers once the trend passes. A fidget spinner subscription service may have been big business in 2017, but it’s hardly a sustainable business model in the long term—just ask the founders of Spinner Box.
Keep your pricing and services transparent
The fate which befell once-popular cinema ticket system MoviePass offers a cautionary tale of sorts in this regard. While the idea of a movie ticket subscription service which allows users to see a film a day at cinemas is a noble one, the constant changes to its service—such as introducing Uber-style surge pricing, and reducing the number of films available to subscribers—have caused the company to take a huge financial hit. Business Insider also reported that a recent glitch in the MoviePass app also prevented some disgruntled customers from cancelling their service altogether.
One of the most appealing aspects of subscription boxes is their affordability, and many are lured into signing up by a free trial, a reduced rate for their first few months, or promo codes to incentivise existing subscribers to encourage their friends to sign up. However, although these are extremely beneficial to the overall success of the majority of subscription boxes, it is critical to be open about exactly what your customers will be spending their money on, including postage. In a worst case scenario—say, if your financial circumstances change— you may need to downsize your boxes or up your prices, so no matter what your subscription box contains, just be honest with your customers.