Bea Tanese

10 Things to Consider Before Starting Your Subscription Box Service

Over the past few years, subscription boxes have taken the world by storm. According to Forbes, the subscription eCommerce market has grown by more than 100% a year over the past five years. Those numbers aren’t hard to believe when you think about what subscription boxes really are: an assortment of goodies delivered straight to your doorstep. While the time intervals may change, the anticipation leading up to the next shipment never does. It’s like celebrating your birthday multiple times a year!

For customers, regularly receiving products in a niche they love is a no-brainer. But how will you, the business owner, ensure a win-win situation? Have full confidence in your project, put your brand above the competition, and avoid making costly mistakes by following this step-by-step process.

1. Understand the problem your product solves.

Ideally, your subscription box will be two things: something you feel passionate about and a solution to a problem your customers are facing. 

Without passion, you’ll struggle to keep your business afloat. Nothing shines brighter than enthusiasm, and a lackluster business will simply sink to the bottom of the ocean. Additionally, a business that is purely self-serving can only attract you… and an evil doppelgänger, if you have one.

2. Figure out what your unique selling proposition (USP) is.

We won’t lie to you. Retail is a crowded market, and subscription boxes are no exception. Before embarking on this exciting new journey, you’ll have to know who your competitors are and what special something will make you stand out. 

One sneaky way to figure this out is by analyzing what your competitors are doing. Read their reviews. Check out their social media. Watch unboxing videos. Heck…even buy their products! Make note of what they’re doing, and do it better. If your stalking skills are on point, you’ll even start to note some similarities among the best subscription boxes. You don’t have to copy exactly what you see, but try to incorporate as many winning strategies as you can for a winning product!

3. Know your customer.

A certain Greek proverb tells us to “know thyself.” Similarly, know thy customer. Never assume you know your customers, your audience, or your market. If you can’t back up your hunches with market research, then that’s how they should stay — as hunches. 

To really read the room, don’t limit yourself to surveys. Get your potential customers on the phone or speak with them in person. You’ll find insights you would have never gained otherwise which can save you both time and money. You may even find that you’re targeting the wrong demographic! If that happens, fear not. Simply regroup and readjust. This is the best (read: less financially catastrophic) time to do it.

4. Keep your business model simple.

Starting a new business is akin to going to the grocery store when you’re hungry. Before you know it, your cart is filled to the brim with enough food to carry you through at least three zombie apocalypses. No shame! It happens to everyone, and we totally relate.

But here’s the thing — the more complex your business model is, the more difficult it will be for you and your customers. A simple business model will make it easier for you to get started and keep your business going. Similarly, you’ll want your audience to effortlessly grasp what you’re selling. Don’t be afraid to K.I.S.S… keep it simple, stupid!

5. Determine your sources of income.

While direct-to-consumer sales will probably be your bread and butter, you can also cash in through cross-promotions. One popular way to do this is by offering to include samples, coupons, or promotional materials from partner companies inside your subscription box.

Go ahead and explore your options! In addition to broadening your revenue stream, you’ll also have the chance to network and make valuable connections within your chosen niche.

6. Determine your main expenses.

Love it or hate it, having a budget is a non-negotiable necessity for any business. While everyone’s list will look a little different, your bare-bones list should include:

  • Product costs
  • Packaging costs (for inner and outer packaging) 
  • Costs to create a basic website with product images and a sales copy
  • Website hosting fees
  • Payment processing fees
  • Marketing costs
  • Costs of storing and managing inventory
  • Labor costs of kitting and packing subscription boxes
  • Cost of shipping your subscription boxes
  • Customer service costs

If it all seems overwhelming (and pricey), there are ways to cut costs. For example, many subscription box companies are able to negotiate discounted rates on the products included in each box. In some cases, it’s even possible to secure free products!

7. Create a prototype box.

Looks matter. At least, they do if you want to create the perfect unboxing experience. Like opening presents on a crisp Christmas morning, your customer’s second favorite part about your subscription box will be right before they get to their goodies. Colorful wrapping paper, attention-grabbing inserts, and a unique box work together to add value to your product.

8. Validate your offer.

You know your audience, so it’s now time to validate your offer. There are a few ways to do this, even if your product isn’t quite ready. For example, you can do a pre-launch campaign to generate a waiting list. You could also pre-sell your subscription box. This gives you the advantage of building up an email list so you can make sales as soon as you’re ready.

9. Remember that done is better than perfect.

Are you up all night counting “ifs” and “buts” instead of sheep? If so, you might be suffering from a particularly nasty case of analysis paralysis. Analysis paralysis, if you’re not familiar, is when you overthink a situation to non-existence. 

Starting to get the sweats? Don’t sweat it! All you’ll need for a quick recovery is a little dose of reality. Here’s the truth: It’s virtually impossible to sort out every single detail. 

Here’s what you’ll really need to get started:

    • A prototype box
    • A basic website with an option to either order immediately or sign up for a waitlist

Looking for recommendations for templates and turnkey solutions? We suggest CrateJoy or Subbly.

10. Decide on your fulfillment strategy.

So you’ve gotten all your ducks in a row, but one pesky detail still remains — how the heck are you going to get these boxes out to your eager subscribers? Having the right fulfillment solution for your business is essential in ensuring satisfied customers and big financial savings.

Luckily, you won’t have to waddle in a pond of choices. You have two options: fulfilling your orders in-house or outsourcing to a 3PL (third-party logistics company). Both are valid choices that are entirely dependent on your current situation, but you might want to consider these factors before getting your hands sticky with packing type. 

Whatever your case may be, we want you to know that you’re not alone. Whether you’re just starting out or have a little empire of your own, we’ve got a dedicated team who’s ready to point you in the right direction. Shoot us a line with any questions you may have, and make that subscription box dream of yours a reality!