Why summertime is the perfect season to kickstart a subscription box

Businesses worldwide have recognized the power of subscription boxes. What began as a way to sell affordable razors quickly evolved into an entire box ecosystem that gives consumers recurring deliveries for the products and services they want most.

Subscription Box – Market Analysis

The popularity of these services is due to both consumer demand and the meaningful benefits they offer. Research shows that the global subscription box market reached US$22.7 billion in 2021 and is expected to reach US$65 billion by 2027 — highlighting the huge opportunity that exists for businesses in virtually all industries.

So, have you considered starting a subscription business or adding subscription boxes to your existing Ecommerce store? There’s never been a better time to get started.

Summertime is the perfect season to launch your next big subscription box idea. Why? Because consumers looking to simplify their lives during the business of summer are more likely to splurge on luxurious products. And when the summer ends, your subscription keeps going. 

What Exactly is a Subscription Business?

Subscription boxes are a unique service that offers customers a convenient, often personalised, and cost-effective box filled with items they want or need. Subscription boxes, sometimes called customer clubs, began with Dollar Shave Club – a service that offered razors and shaving items every month. The company had astounding success and launched an entire business model. 

Yet, subscriptions aren’t a new concept. Magazine subscriptions have been popular since 1898, and several companies had success with CD subscriptions in the 1990’s. It’s a business model that’s ensured recurring revenue for media companies for over a century. 

But it wasn’t until online shopping became the norm that the modern spin on subscription services took root. Now, consumers can subscribe to receive easy-to-make healthy dinners, the clothes they wear to work, and a never-ending supply of coffee.

Top Benefits of E-commerce Subscriptions

There’s a lot for consumers to love about subscription boxes. Some provide recurring deliveries of products they regularly buy, while others let them experience new items they might never discover otherwise. 

But why do businesses love e-commerce subscriptions? Of course, the exact benefits will depend on the subscription box model you pick, but let’s explore some universal business benefits appreciated by all of them.

Enjoy Predictable Revenue

The most potent benefit of this business model is securing predictable monthly revenue. Unlike traditional e-commerce stores that rely on single purchases, subscriptions provide a straightforward recurring revenue stream. 

Predictable revenue creates a consistent baseline for your business, with single purchases or upsells allowing for added revenue. You’ll rest easy knowing that you can cover your operating costs and understand how much you’ll have every month to re-invest in the business. 

Spend Less on Customer Acquisition

Traditional e-commerce stores are constantly investing in customer acquisition. However, once customers are earned, they might only make a single purchase and never return. 

Subscriptions allow these same marketing efforts to earn customers that are inherently repeat customers. Additionally, as long as you provide quality products and reliable shipping, you can turn customers into extremely loyal brand advocates. They may refer friends to your customer club, earning the highly sought-after word-of-mouth marketing. 

You’ll still need to market your business, of course, but your business won’t be reliant on a constant stream of new customers to survive.

Read our subscription software guide to find out why a solid solution can help you automate, integrate and scale your subscriptions successfully.

Enhanced Upselling and Cross-Selling

It’s common for subscription boxes to have several tiers of boxes, and many customers start with the lowest tier to try it out. However, if they love what you’re offering, they may upgrade on their own to a higher tier.

That’s not the only way to upsell, though. The frequent customer contact in subscription services creates repeated opportunities to upsell higher tiers and cross-sell one-time add-ons. 

If your subscription box complements a broader online store, you can offer your box subscribers other products with special discounts or promos. 

Do Your Products Make Sense for a Subscription Box?

Some products simply don’t make sense for a subscription box. For example, products that a consumer would generally buy once every few years aren’t typically a great fit for this business model. Additionally, boxes filled with non-consumable novelty items can experience success but may struggle to retain customers. 

On the other end of the spectrum, some niches are oversaturated with subscription boxes, and entering the market may prove difficult. For example, the meal-kit category is particularly oversaturated since these products are a perfect fit for subscriptions. Yet, other businesses are already dominating the market, and the meal-kit category has one of the highest cancellation rates. 

You’ll need to do significant research before launching your box. You need to see what else is out there, what’s failing, what’s succeeding, and how many businesses are already serving that niche. In addition, you’ll need to make sure you secure excellent wholesale prices and that your subscription rates are competitive and profitable.

Why Reinvent the Wheel? Simplify Subscription Management with Billwerk+

Are you ready to launch your summertime subscription box? You may be well on the road to success, but don’t think you need to pave the road yourself. Instead, leverage existing platforms to operate your business. 

Popular e-commerce platforms such as Shopify and WooCommerce can provide a feature-filled online store to get you started. Plus, with our powerful plug-ins that provide everything you need for subscription management, starting your own subscription box is easier than ever! 

Billwerk+ offers an easy-to-use platform that allows customers to upgrade, put subscriptions on hold, leverage promo codes, and more.