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Building A Subscription Box Business

Guide to starting a subscription box company

Subscription boxes have changed the way consumers shop and interact with the brands they like. The subscription market has grown steadily since it was introduced about a decade ago, valued at roughly $10 billion today.

If you're looking to cash in on this growing trend, here's everything you need to know. Continue reading for details on the subscription box demographic, benefits of launching a subscription product or service, and tips on how to get started.

Types Of Subscription Boxes

Living room full of online orders/shipping box deliveries

Subscription box customers most often purchase for one of three main reasons: replenishment, curation, or access.

Replenishment Boxes

Replenishers desire an easy way to keep items in-stock without much effort. For them, it's all about convenience. These customers can 'set it and forget it' – they choose what they need and it shows up at their doorstep at the chosen interval of time.

This is made easy by companies like Dollar Shave Club and Amazon Subscribe and Save. These services make recurring purchases convenient and easy.

Curation Boxes

Curators, the largest demographic for subscription boxes, crave the surprise. The anticipation and the eventual act of unboxing the package is what gets them hooked.

Companies like Stitch Fix and Blue Apron enable the user to set interests. The company then sends a monthly box of goodies the user should like.

Access Boxes

Those interested in access purchase subscription plans for accessibility to VIP-type perks, discounts, or membership services. They're enticed by something considered exclusive. Well-known examples in this genre are Thrive Market and NatureBox.

Benefits Of A Subscription Business

Subscription boxes are a profitable and growing business sector. So if you're looking to throw your hat in the ring, here's what you can look forward to.

Consistent Revenue

Piggy bank with money being added

Subscription services, unlike traditional sales, don't rise and fall with the seasons. Once you have a steady number of subscribers, you'll get a sense of what your monthly sales will be. There's not much guesswork involved with estimating income and revenue.

Reliable Inventory

Managing inventory should be substantially easier than other business models since you have a good idea of how much product you'll sell every month. This helps save on storage overhead fees and rush orders, and it offers your business a leg-up on manufacturing.

Built-In Marketing

Subscription boxes arrive in bright packaging with large logos for a reason. People are more likely to share unboxing experiences on social media and with friends when the packaging is exciting. This is free, instant publicity and easy-to-acquire user-generated content.

Personalization

Customers become loyal when they feel an emotional connection to what they're buying or the company they're buying from. Boxes tailored to their interests offer that added touch, and encourage them to reorder and share their experience.

How To Start A Subscription Product

Here's a quick checklist to help you get started.

Come Up With Your Subscription Box Idea

Break down your niche and get as specific as possible. The more specialized your box is, the easier it is to curate products for your audience. This will enable you to maximize retention and create a great customer experience.

Do Your Research

Look into your competitors and your intended audience. Get to know them both well so you can take the next important steps. Find out what they send every month, what their subscriber numbers look like, what their price point is, who their demographic is, etc.

Price Your Subscription Service

You don't want to price your subscriptions too high or too low. You're always looking for the sweet spot that covers your overhead costs and, of course, still enables you to make a profit.

For more pricing help, CrateJoy offers an interactive subscription box pricing guide.

Pro tip: If you've established a price but feel like it isn't working for you, don't hesitate to ask your customers. Provide questionnaires or special offers to get the information you need.

Choose Your Packaging

Packaging for a subscription box company

Your box is the face of your business. No matter how good the products inside are, a subpar box can negatively affect the customer experience. On the other hand, good subscription box packaging can do some of the marketing heavy-lifting for you!

Customers and influencers love to share unboxing experiences on YouTube and Instagram. This can lead to a lot of eyes on your brand – for little-to-no extra marketing dollars and to exactly the right audience.

Pro tip: Don't forget to consider shipping expenses when choosing your packaging. The weight or size you choose can have a big effect on your carrier costs.

Put Together A Prototype

A prototype box doesn't need the exact items you plan to ship your first month, but it should match the quantity, quality, and value you plan to deliver once you've launched.

Select items that represent the kind of products customers can expect once they subscribe. The key is not to mislead with your prototype box, as people will immediately cancel if they feel they've been duped by your marketing efforts.

Begin Your Pre-Launch Marketing

Set up your website, social media presence, email, and automate your marketing efforts. Consider doing a social media countdown with giveaways and prizes for users sharing your big news.

The goal is brand awareness and traction, get all eyes on you.

Source Your Goods

Start building partnerships with brands you want to feature and sourcing goods you'll want to include. You should have a plan for 2-3 boxes down the line so you're not left scrambling at the last minute.

Launch

Get your first set of boxes out the door. You did it!

Study How It Went

To keep your business afloat, analyze your operations for the first month and examine how your assumptions and actions panned out. Are you gaining viewers, interested customers, and seeing organic awareness spread? Did the packaging and shipping process go as planned?

Don't just move on from the first box (and every one after that). Review how things went and keep innovating to push your business forward.




You're well on your way to becoming a successful business owner. For more entrepreneurial insight, check out our Label Learning Center. You'll find dozens of articles on effective shipping techniques, barcoding and inventory management, packaging inserts, photography advice, and more.

Guide to starting a subscription-based company