Starting up with a Subscription Box Business

Raffy Wolfe Next Level Merchandising Leave a Comment

Subscription boxes are said to be one of the best ways to shop. Due to its convenience along with the unique experiences that it can offer to the consumers; some of which involve products and themes, introduction of new brands, and making checking of mail more interesting.

While if we are to talk about the business side, we can see subscription commerce offering a stable financial model rooted in recurring monthly revenue that can take part and be established around almost every niche – from board games to beauty and cosmetics and even to pets! As long as there’s an already existing community around a product or category online, there is a big chance that you can build a subscription box around it.

However, everything has got to start with something right? Just like anything else, initiating a subscription box business must be initiated with an idea; a good one to be specific because when it comes to subscription commerce, you really have to identify greater ideas to just good ones.

Of course, having that idea is not enough. You must also be able to identify your niche and find the most suitable market for you. This includes having a competitive analysis and customer profile which gives you enough knowledge about what you are about to do.

There are a lot of specific market that offers different products and services. Chances are, there are already a lot of established competitors so it must be very hard to just start now, but, if you will be able to find a field where you can make a name for yourself, then better take that path. On the other hand, you can also try on common but general markets such as food, fitness and cosmetics because these are considered as necessities and it’s impossible not to have even a single customer.

Now, after knowing what you want to sell, and who you are competing with, of course you must not forget having a target market. You must also have their demographics like their common age bracket, preferred locations, economic standing or income level and their preferred social platform.

Now you can proceed with pricing your box. While most of subscription box owners make mistakes and tend to misprice their box; whether they’re pricing too low to stay competitive or pricing too high to secure a hefty profit margin, both ends of these spectrum will threaten the viability of your business. So you really have to think of the right price that will make your business profitable and scalable.

When pricing your box, you have to consider the Product cost; Box cost along with the box accessories (stickers or stamps); Packing materials cost such as filler paper, bubble wrap, or inserts; Postage/shipping costs or the mailing labels, packing tape, etc; Fulfillment costs (physically packing your box), Transaction and platform fees: charges from your payment processor and ecommerce platform per order; Fixed monthly costs or the Gmail fees, accounting software fees, etc. and lastly, the Acquisition costs which includes the advertising & marketing to acquire new customers.

From here, you can start with the prototype of your box, as well as establishing your website along with the marketing and advertising strategies. After that, orders would follow so you have to secure a good delivery and shipping service because that’s what will make a good impression to your customers.

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