How To Start A Subscription Box Business - Subbly

There are a wide variety of benefits for entrepreneurs starting subscription box businesses. Here are five important ones:

Recurring revenue: This model generates a recurring and stable income stream.

Scalability: Once you have a successful service with a solid subscription base, you can easily increase your subscriber numbers through marketing and referrals.

Inventory management: A subscription model means you can accurately predict your inventory needs, which can help you manage costs more efficiently.

Higher lifetime value: Because customers spend more through a recurring subscription, the revenue you generate per customer is higher than it would be in other business models.

Decent profit margins: Subscription boxes have a profit margin of between 40-60%. This is in contrast to general small businesses, which have an average profit margin of between 7-10%.

Higher multiples: Due to the ongoing income of subscription box services, investors and buyers will likely value it with a higher multiple when you sell shares or exit your business.

💡 Read our article 8 Benefits of a Subscription Box Model to learn more.

How profitable is a subscription box business?

Many subscription businesses have made massive profits from their subscription services or products. Here are some examples:

• Framed By Sarah: Their founder, Sarah Williams, says she’s made over $1,000,000 from her subscription box business.
• Birchbox: Founded by Katia Beauchamp and Hayley Barna, Birchbox grew quickly from a small investment to millions in annual revenue.
• Dollar Shave Club: Founded by Michael Dubin, Dollar Shave Club revolutionized the razor market with its replenishment subscriptions, leading to a $1 billion acquisition by Unilever in 2016.

This shows that, by pursuing subscription box business models, both you and your investors stand to gain a lot.

The right subscription business model offers a range of benefits to entrepreneurs who want steady revenue, predictable growth, and stronger customer relationships.

Let’s get started on your custom subscription box. We’ve broken it down into an easy, five-step process:

1. Choose your subscription box: Coming up with an idea that will attract loyal customers.
2. Start your planning: Plan all aspects of your business and box.
3. Set up your operational framework: Choose an e-commerce platform.
4. Market and promote your box: Stoke engagement before you launch, and after.
5. Launch your box: Customer loyalty becomes critical, as does monitoring metrics.