We want to analyze all steps of starting a subscription box business. It’s really popping-up and many people want to get something from it. If you start to read this article you already in one of these steps and you’re struggling, or you’re just in the middle of thinking the question can I do it? Of course, yes! Therefore you’re not the only one who is reading this article right now. If you ask do subscription box companies earn, the answer will be yes but it needs hard work, creativity, and experience. We defined 5 steps and want to guide you for the basics
- Define your Niche Well
- Source the best Products for it
- Choose the Right Platform
- Market your Box
- Ship your Subscription Box without any hassle
Choosing A Niche
As you already know everyday a new subscription box appears and choosing the niche for it is one of the most important things. You can’t just decide on creating a subscription box without a niche or theme. Maybe it’s not appealing to limit yourself but you should differentiate your box from the others.
Don’t imagine to be next Ipsy, Birchbox or Dollar Shave Club. It’s not only about they are too big to compete, but it’s also about copying can’t make your business great. You can be sure that many others are doing it. They are just saying to themselves why not and following the same path. Unfortunately, they can’t live for a long time.
“Okay there are many subscription boxes doing great, so I should add one more item to my box.” Actually, it’s not working like this, especially if you have not a huge company. I want to give a special subscription box example: Stack. Every month they are sending one independent magazine and they are doing it for years. They focused on a specific niche and they improved themselves without competing for any other business. Of course, it’s not easy to find this kind of space especially for boxes targeting women but try to be creative. Don’t fall in love with your first idea. Research more.
Although you decide to work on your first idea after some research, you will be more confident and it’s valuable for entrepreneurship.
Don’t listen who says you should have a great idea.
You should start to use Google more. It will be your best friend to understand what people wants. If you are a Steve Jobs you can create an iPad and fill a gap which people don’t know yet but otherwise it’s better to stick on what people’s demands. First you should define your competitors, then you can check how many people are searching them. Ubersuggest can help you a lot for it. You can check the monthly search volumes of your niche keywords. Let’s say “sock subscriptions”.
It has 3600 monthly search volume from the United States. SEO difficulty shows that how hard to rank in this search. Actually, for now, it’s something you shouldn’t worry about. I will explain it later why you shouldn’t worry about.
Then I searched beauty boxes from keyword suggestions section. As you see “beauty boxes” has 22,200 searches just in their own and many other suggestions so similar but you can get help for your niche from these suggestions. For example, when I scroll down a bit I found beauty boxes with full sized products the search volume is only 210 in Google but it shows there is some interest and it can be something which you target and differentiate your box from the others.
“You will not pay for to get free samples of the brands”.
Make your research well, subscribe to as many subscription boxes possible, analyze their cons and pros.
Prototyping Subscription Box
After you decided on your Subscription Box. Now it’s time to make a list for yourself.
- -Which are the platforms to reach my potential customers? (Pinterest, Facebook, Youtube, etc.)
- Can you contact any of these influencers? (Don’t aim the most popular ones)
- Is there a big competition for boxes in your niche? (If yes, subscribe them and find their cons.)
- Which brands are potential suppliers for your box? (You should list at least 10 brands for starting)
You feel ready, you want to launch your box immediately and get some customers, I know but let’s be sure, it will work. It’s a testing phase for your subscription box. Now you need to create a prototype, take some photos and create a website. (We analyzed more details for which platform you should use for creating a website in Choosing a Platform section).
A prototype of your box means, showing a potential experience of your box with potential products. Of course it doesn’t mean your box will include these items but of course, it should be similar at least. (If you will ship 3 sample items with your box, you shouldn’t show 5 full-sized products in your prototype.) You will use your website for reaching potential customers with creating an email list. You can expect around a 10% conversion rate from your email list. So try to aim 500 people in your list in a month.
How to Source Products for Subscription Boxes
If you know your niche well, you should know many potential suppliers already for starting don’t expect any huge discounts but with your potential audience from your email list, you can push for a discount. If you target less popular brands your chance will increase of course. Surprising your customers also help you to increase word of mouth marketing. They will mention from your box to their friends, so especially for your first boxes don’t target high profits. When your audience number grow brands will be more convincible for discounts.
When expenses start for your business taxes are getting a part of it too. So it’s depending on your country or even your state. So my suggestion is to research your tax policies in your location to be sure to pay less taxes and be completely legal.
Choosing the Platform for Subscription Box Business
Now it’s time to talk about how to choose a platform for your subscription box business. I think it’s a versus between Cratejoy and Subbly. Cratejoy offers its marketplace with their website builder. Subbly only specialized with the website builder for subscription box niche.
Subbly vs Cratejoy
Cratejoy is one step ahead of this competition with their marketplace but they are getting more than 10% commission for the sells on their marketplace. It can be a little bit annoying but they are like Amazon of subscription boxes. Maybe you think you can find subscribers on your own but using a reliable platform for beginners is the best way. If you do your job well your reviews will help you to be on the first page. Click to visit Cratejoy website
Using Subbly for Subscription Box Business
If you want to run your business completely from your site, Subbly is your best alternative. It will help you build your site from scratch. They have also just checkout solution for the entrepreneurs who already build their website. Both ways with their perfect customer support they will be the best solution and I want to remind both plans to have an additional 1% transaction fee. Click to visit Subbly website
Actually, most of the e-commerce platforms can be your other alternatives like Shopify but I suggest you stick with these ones because they are specialized in the subscription box business.
How to market subscription box?
Many of you already know social media, Youtube unboxing videos but maybe some of you didn’t familiar with what affiliate marketing is. Basically, it’s income for marketers by promoting products.
Affiliate Programs for Subscription Boxes
Now you have the product and you need to create awareness for it. If you just started with Cratejoy, you don’t need to worry. They already have an affiliate program so you don’t need to do anything. You just need to contact with some reviewers. Some of them can request money or a free box. I think to send free boxes to influencers and affiliate writers are fine but I’m not sure about giving money. So you need to find these blogs. I said Google is your best friend before. So what are the suitable searches for you? Maybe it’s best luxury subscription boxes.
Check the sites which appear in Google search. Probably you will see this type of lists is linking their sites to their affiliated products. If the site is already working well, maybe it will not be easy to convince them. So you should prove your product is not a type of scam. You can contact them and send a free product. When you check the sites in the other pages like page 2 or 3 it will be easier to convince them to market you. Because most of these sites are not earning good enough money yet, so they will be happy with your offer.
We’re writing reviews for the best subscription boxes too, maybe it can help you to see what is important from reviewer perspective.
When you are selling your box from your site, you should deal with one affiliate program. Then you will have special links to share with your affiliate partners. Affiliate sites will take a commission by their sales. What’s good about this deal is if you can’t earn money you’re paying nothing! So it’s really the best deal for beginners. The advantage of making it from your site you can increase the percentage of affiliates and they will be more eager to share you. The advantage of Cratejoy, the affiliate deal is only about them and you’re not losing any money, it’s all about Cratejoy’s commission.
Packaging & Shipment for your Subscription Box
The packaging is one of the most crucial parts of the subscription box business. Maybe if we are talking about any other business, we can easily say choose the easiest solution for it. Unboxing and the first experience is significant and you should show your branding in there and differentiate yourself from the others. Boxup is the popular brand to use for packaging solutions.
They give you the option to brand your packages their pricing is decent. When it comes to shipment, first you should be aware of nobody like to pay for it nowadays. So you should include this price in your budget. It’s better to start only with your country if you are successful enough in a while you will start to get some feedbacks for shipment to other countries. Let’s wait for these comments before thinking worldwide.
It’s the end of the basics but we compiled together some questions which some visitors asked us via email. So if you have any questions don’t hesitate to contact us from firstname.lastname@example.org
Does Birchbox pay for samples?
Most of the entrepreneurs ask this kind of questions after they realized sourcing products for the business is really painful and expensive. Then everyone starts to be curious about how these companies handle it for that cheap. Unfortunately, the answer is no. So it’s really hard for you to compete with them. For brands giving their products to companies like Look Fantastic, Ipsy, Birchbox is a marketing cost.
Are subscription box businesses profitable?
Short answer, yes. It’s connected with the above question. It’s very profitable when you have many customers and good contacts for sourcing your products. Imagine you’re not spending a penny for sourcing the products. So you should work hard to be one of them. It’s not easy to reach the target but still reachable.