In today’s fast-paced world, making a trip to the grocery store can be inconvenient and that is why the business in a box model is a rewarding business model. Many people prefer getting items delivered to their doorsteps on a consistent basis.
Netflix, Postmates and Amazon Prime are some of the big brands that have made an entrance into this model and succeeded in providing their valued customers with this service. Here are easy to follow steps on how to start your subscription box business and add a subscription revenue stream.
Identify Your Target Customer For Your Business In A Box Startup
This is your first priority when starting a subscription box business. The secret to making the right choice is honing in on a specific customer type in a particular lifestyle.
With the numerous opportunities in the subscription box market, you shouldn’t be tempted to satisfy everyone. The customers you choose will guide you in selecting the most suitable subscription box product for your site.
Choose A Product For Your Business In A Box
When choosing a suitable product for your subscription box site, you have to consider various factors such as the cost of sourcing products, your target market and shipping costs. Remember, most of your future customers will be people who love buying items that are within their particular lifestyle.
So, if your target customers are golfers, it is pointless to design a subscription box business website that offers cosmetics. In fact, it is much easier when you choose to work with a product that you have a common passion and interest in.
For example, since the founders of the UK based Flavourly were passionate about connoisseurs and foodies, they used their broad knowledge of the food and beer industries to constantly source the right products for their customers.
Decide How To Source Your Products
There are two viable options of sourcing products for your subscription box business from potential suppliers:
Some suppliers might be interested in a platform that promotes its new products to potential customers regardless of their location. This strategy may not give you full control over the products that you promote and promise your subscribers. It is however, a good approach especially for startups.
Contacting prospective suppliers and negotiating costs can be a daunting task. However, it will give you control over the products that you sell on your subscription box website.
Set Reasonable Prices
You have to conduct intensive research before you come up with reasonable prices that will earn you revenue and enable you to stay competitive. In fact, the prices you choose could make or break your subscription box business.
Charging too little will make customers think your products are poor quality. On the other hand, charging subscription fees which are too high will also drive customers away. Take into consideration the cost of sourcing the products and the shipping costs when setting your price margins.
You can use a budgeting tool to guide you in making this important decision.
Shipping & Handling
The size and weight of the subscription box matters a lot. Remember, every penny counts when you are starting out. Thus even reducing the size of your box by a few centimeters will help you save a few dollars.
So, compare the convenience or cost effectiveness of shipping the subscription boxes from your company and outsourcing the handling services to a third-party. You have to be very smart because the CPA (Cost per Customer Acquisition) is a critical part of your metrics in marketing.
Researching extensively about the subscription box business model will help you overcome all obstacles in becoming a successful merchant.
You should only invest your money and time once you are satisfied that you fully understand the ins and outs of the subscription box business.