A Guide To Set-Up Subscription Box Business
A
subscription box business delivers boxes filled with a certain type of product
at set intervals. Customers typically pay a set amount to receive a new box at
the same time each month. Some subscription box businesses vary the frequency
of deliveries and offer the product at different tiers, which changes what the
customer will receive.
The
product can range from items like organic snacks and children’s books to pet
toys and treats. Regardless of the product, the subscription box business model is experiencing major growth.
There
are two models for subscription box businesses.
- In a convenience commerce model, customers receive the same products automatically on repeat purchases. They choose how often they would like to receive the products so they are not without the items. “This type of subscription box is all about making people’s lives that little bit easier,” according to digital marketing agency Pretty Klicks. “By providing frequently purchased items on a subscription basis, businesses can save their customers a lot of time and effort.”
- In a discover commerce model, customers receive and sample new products that they may not have heard of or tried before. If consumers enjoy the sample size they received, they may purchase the full-size version. This works particularly well in the beauty industry.
7 Steps to Subscription Box Success
Come Up With a Unique Idea
Think
of a product that people are likely to want or need on a regular business. Pay
careful attention to the community associated with the product category. “If
you don’t know what your potential customers care about, it can be very
difficult to create a product they’ll care about,” according to entrepreneur Jameson
Morris. Try a product idea in a category where culture is important (e.g., yoga
or veganism).
Research Your Target Audience
Learn
as much as you can about the community and niche you have chosen. This will
help you position your product in a meaningful and appealing way.
Find the Right Supplier
Pretty
Klicks recommends looking at the suppliers of your competitors’ boxes. Once you
identify potential suppliers, make sure they can meet your requirements, check
if they’re reputable, negotiate costs, and don’t forget about your
packaging.
Determine the Price
Morris
recommends leaving at least a 40 percent to 50 percent gross profit margin
after all cost of goods.
Build Your Brand
Consider
the name of your business along with your website, logo, order management
platform, and more.
Market Your Product
Develop
a marketing plan that incorporates email marketing, social media, content
marketing, and search engine optimization (SEO). Sending promo boxes to
influencers and advertising on Facebook can help you get started. Identify some
initial steps to take and mix them in with long-term approaches to marketing
your product.
Ship Your First Boxes
Pay
attention to any feedback you receive. Address any problems and implement
changes so that you will be prepared when your business grows. Customer service
is crucial to your business.
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