What are Subscription Boxes?

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What are Subscription Boxes, and Could They Be a Good Fit for Your eCommerce Business?

You may have heard of subscription boxes, wondered what they are, and struggled with whether they could be a good fit for your eCommerce business.

To answer these questions, let’s look at how they work, how to get started, why they’re worth implementing, and what downsides you need to be aware of so you can choose how to proceed with your subscription box project.

What are Subscription Boxes, and Could They Be a Good Fit for Your eCommerce Business?

Subscription Boxes Explained

Subscription boxes are packages filled with products that customers can regularly receive, usually month by month or even annually.

They provide convenience and value, as customers regularly get access to all sorts of goods without having to shop for them.

Subscription boxes can contain various items, from food, clothing, and beauty items to pet supplies or pop culture merchandise. The contents of the box change each month or year depending on the subscription plan, providing customers with something new all the time.

Customers pay a flat fee for their subscriptions, meaning they get everything in their box for one simple price rather than shelling out for each item individually.

Tips On Getting Started Selling Subscription Boxes

If you’re thinking about selling subscription boxes as part of your eCommerce business, there are some things you should consider beforehand:

  • Choose your niche – decide what type of product you want in your subscription box to narrow down your potential customer base
  • Research competitors – take note of how much other companies in your market segment charge and how often they ship out their boxes.
  • Develop a marketing strategy – create ways to advertise your subscription service online or through traditional media outlets
  • Set up logistics – figure out how often you will ship out orders and what shipping costs will be associated with fulfilling them

It’s worth delving into an overview of setting up a subscription box business 101 for a more comprehensive introduction to what entering this market involves. If you’re too hasty in launching, you’ll fall foul of common mistakes, which we’ll discuss below.

Benefits Of Subscription Boxes For Ecommerce

There are many benefits associated with selling subscription boxes:

  • Increased revenue – offering subscribers access to discounted prices on regular purchases encourages them to use more services from an eCommerce store, thus improving retention rates
  • Loyalty rewards – subscribers who remain loyal over time receive incentives such as bonus items in their box or discounts on future purchases, compelling them to keep coming back for more
  • Brand recognition – when customers receive regularly scheduled shipments, it gives them more exposure to your eCommerce brand.
  • Easy setup – setting up a basic payment plan is straightforward, so long as you use the right platform on your site.
  • Ironing out inventory issues – Many retailers use subscription boxes to deal with surplus product inventory.

So as you can see, for many sites, it makes sense to jump on the subscription box bandwagon, unleashing these advantages in the process.

Drawbacks Of Subscription Boxes For Ecommerce

While there are many upsides to selling subscription boxes, there are also some issues. These include:

  • Cost of shipping – customers may be charged additional fees for shipping if the cost is not included in their subscription fee. However, if it is included, changes in delivery costs could hurt your profit margins.
  • Risk of customer dissatisfaction – if items in the box do not meet expectations, it could lead to negative reviews and decreased sales.
  • Difficulty with inventory management – having to keep track of multiple subscriptions makes managing inventory difficult and time-consuming.
  • Significant competition – the subscription box segment has exploded in popularity over the last few years, so unless your offering is truly unique, you might struggle to gain traction in a market that is coming close to saturation.

Other Considerations

When deciding whether or not to offer subscription boxes as part of your eCommerce business, it’s important to consider other factors such as customer service and customer support.

You should also ensure a reliable system for tracking orders and payments to easily manage any inventory, payment processing, or supply chain snafus that arise.

Additionally, you should create clear terms and conditions outlining what customers can expect when they sign up for a subscription box. That way, you’ll be able to avoid the dissatisfaction above and keep subscribers loyal for longer.

The Bottom Line

Subscription boxes can greatly increase revenue by providing customers with regular access to discounted products. However, eCommerce businesses must understand both the benefits and drawbacks before getting started with selling them.

With proper planning, research, advertising, and customer service, your eCommerce business could find success selling subscription boxes!