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How to Start a Subscription Box Business [2020] – A Step-by-Step Guide

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It’s likely that if you’re here, you’ve heard about the subscription box business model, and you’re interested in learning more about how it works. In this article, we’ll be discussing how to start a subscription box service.

I’ll be sharing how the subscription box business works, what the demand is like, how you can find the costs, and step-by-step how you can get started. If that sounds interesting, stay tuned…

The Perks of Running a Subscription Box Business

You might have heard of subscription box services like Barkbox or Blue Apron. They curate goods for a particular interest of people, and make recurring revenue as a result of satisfying a set number of subscribers.

Subscription box services are ideal because:

  • They can have steady and predictable cashflow
  • You can source products and get help predictably
  • You can grow a loyal community of people and long-term customer relationships
  • There’s lots of variety that you can offer thru a subscription box

Are Subscription Boxes in Demand Online?

Yes. Subscription boxes are in demand online. In fact, Fast Company has said the e-commerce subscription revenue went from $57 million in 2011 up to $2.6 billion in 2016!

This includes subscription services like membership sites.

Subscription boxes are becoming a major part of the subscription revenue market. There are subscription boxes for clothing, perfume, makeup, undergarments, trinkets, and the list can go on.

Who buys Subscription Boxes?

The most in-demand subscription boxes:

  • Satisfy a recurring need
  • Make it more convenient for their customers to access things they’d already want to buy
  • Avoid customers having to place repeat orders
  • Save money when bundled
  • Encourage self-care
  • Make good gifts
  • And, prevent customers from running out of things they like to keep in stock

Why do people buy Subscription boxes?

It’s very common for people to buy subscription boxes to:

  • Maintain a consistent stock of items they love
  • To avoid running out
  • To give as gifts
  • To try a curated box of new things they might not try otherwise
  • Or, to support a cause they’re passionate about

How much does it Cost to Start a Subscription Box Business?

The costs to start a subscription box can vary based on several factors including:

  • Your domain costs
  • Administrative costs (like cloud storage, software integrations, fax costs, etc.)
  • Legal costs (like incorporation, trademarks, legal disclosures, etc.)
  • Accounting and bookkeeping costs (consultation and/or software)
  • Packaging costs
  • Web design (plugins, software, and services)
  • Ecommerce software to handle billing and customer payments (like Cratejoy or SamCart)
  • Email marketing software costs
  • Customer relationship management and Help desk software (CRM software)
  • Labor costs (how much you’ll pay yourself, how much you’ll pay contractors and employees)
  • Costs of the products within your boxes
  • Shipping costs
  • Payment processing costs

In order to truly know the costs to start your subscription box business, you’d want to:

  • Choose your tools and the people who will be helping you
  • Choose your software
  • And, choose your costs associated with your boxes

Are Subscription Box Businesses Profitable?

A business is profitable when the expenses are less than the income, therefore, the subscription box profitability is up to YOU. Since there is a demand for subscription boxes, then it’s possible to get sales, but you’d have to ensure that you keep your sales volume high enough to cover your costs, and keep your expenses lower than your income.

How to Start a Subscription Box Business – Step-by-Step

If you’re interested in starting a subscription box business, then these are the steps I’d recommend to get started…

1. Choose a Niche

There are subscription boxes that offer all kinds of products, however, you don’t want to offer a variation too wide that it doesn’t appeal to anyone. For example, there are subscription boxes that offer dog treats, cosmetics, or food, but can you imagine if one subscription box tried to offer dog treats, cosmetics, and food in one?

Instead, it’s important to choose an audience that you’d like to serve, then think about what types of products could be compiled together for them to make their lives easier.

Subscription Box Business Ideas

Some subscription box business ideas include:

  • boxes for bakers
  • boxes for people who like to fish
  • boxes for aromatherapy
  • boxes for people who want to deal with a sickness naturally (like arthritis, etc.)
  • boxes for athletes

2. Build a Website

Once you’ve decided on your niche, then it’s time to build your website, which will serve as the homebase of your business. With your website, you’ll be able to build an email list, meet new prospective customers, engage with them, and convert sales. Having a website will help automate some of the marketing and sales tasks that every business has to do.

3. Monetize the Website

Once you set up your website, it’s important that you add ways to pay for your products, and other options for you to make revenue–this includes selling your boxes, but it also can include sponsored posts, ads, events, and affiliate marketing.

Resources:

4. Create Content

In the online world, creating content is like an alternative to handing out flyers or business cards. You create content to let people know about your business and to attract new potential customers. You want to create content on your website, on social media, and run ads to attract new potential customers to your business.

5. Set up Social Media Accounts

Social media sites are some of the most popular places for people to hang out online. As a result, it’s a great place to meet new people or build more brand awareness. You want to set up your social media accounts to play a role in attracting potential customers to your website. Eventually, it would be ideal to attract customers from social media organically, with shares, and with ads.

6. Get Traffic

By creating content, sharing it on social media, and running ads, you’ll be getting traffic to your website: organic and paid.

7. Make Money

Ideally, you’d offer paid products and services that are relevant to your website visitors: your subscription boxes and other products, services, affiliate products and services, sponsored posts, and ads. As a result of attracting your ideal customer to an offer that’s relevant to them and asking for the sale, then you’d make sales and money.

Conclusion

Overall, starting a subscription box business is a great way to make a recurring revenue, provide something of value, and help people. Hopefully, this step-by-step guide on how to start a subscription box business illustrated how you can make your subscription box business a reality.

If you’re ready to get started with your subscription box business, I’d recommend you get started with our free business planner, and begin honing and refining your plan. Download the digital business planner here.

Are you Ready to Start your Subscription Box Business?

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