How to Start a Subscription Box Business

Subscription boxes have become a part of everyday life for millions of American consumers. Whether it’s food, clothing, or crafts, consumers regularly receive monthly packages of their favorite items.

The subscription-based business strategy can become very successful. Just take a look at Netflix (we know it’s on in the background right now anyway). Netflix started out as a subscription-based DVD rental service. At the time, the subscription strategy proved very successful for Netflix, and their ability to adapt to consumers’ needs allowed them to stay relevant. Today, the subscription box model is a common business type, and if you’re wanting to start a business from the comfort of your home (so you can work while you watch your show), it might be a great fit for you!

So that idea sounded great, and you’ve decided you want to offer your own subscription box business. Now what? Here are six steps to help get you started!

Come Up with a Brilliant Idea​

It’s time to think inside(?) the box! The first step of any business is to come up with an idea. For a subscription box to be successful, it must tackle a specific angle. There are thousands of subscription box options out there. If you have a vague idea for what you want to do, chances are there is already at least one subscription box out there covering some aspect of that subject. The trick is to find and settle into a niche.

Your goal is to attract a specific audience that will feel as though they can’t live without your product. For example, if you want to sell clothes, decide what kind of clothing. Shoes? Narrow that down more. There are already hundreds of subscription boxes that sell shoes, so why would someone choose you? Glamorous heels, vintage sneakers, or quality loafers are all subjects that will attract a more specific target audience, thus giving them a reason to buy.

One example of a unique take on the subscription box is Once Upon a Book Club. Rather than blend in with thousands of other book subscription boxes, Once Upon a Book Club gives its readers a unique experience by sending gifts that apply to the story along with their books. Small notes throughout the book prompt the reader to open different packages which help the book to “come alive.” Not only is this specific enough to grab peoples’ attention and convince them to buy, Once Upon a Book Club also offers a variety of boxes for different ages and interests. This allows them to be both niche and to cater to as many demographics as possible.

Develop a Prototype Subscription Box​

The prototype is used to create buzz around your product before you actually launch your box. Use it for photoshoots to gather images of your project. You can then use these photos to advertise the type and quality of goods you are offering to your potential customers.

Developing a prototype will help you figure out fine details of your boxes. Obviously, you must choose the products you will offer. Rather than start with the full collection of items you will include in your boxes right from the get-go, the prototype box is simply meant to show what type of items you will include. It is meant to be a model, not necessarily the exact product you will offer. You might not have narrowed down on the specific vendors or sources for your products yet. The prototype box should have the same value and quantity of content, but it does not have to be sourced from the same place as your “real” boxes. This helps give potential investors and customers an idea of what you are offering but also helps you to get pictures of your product out more speedily and allows room for change.

You must also choose a box. Many subscription box businesses are using personalized specialty boxes to package their products. Like the items in your box, the box you will use for your monthly subscriptions is not necessary to have for your prototype. Use the best you can find available, but even a decorated brown cardboard box will do, as long as it conveys the feel you want associated with your business.

The packaging material that goes inside the box alongside your product is also important. The days of simple packing peanuts or a bundle of bubble wrap are no more. Colorful tissue paper and crinkle paper help to give customers the “unboxing experience” you want to be associated with your brand.

Prelaunch Your Brand​

A prelaunch campaign is important because it helps you to determine whether your idea is actually right for the market or not, and if it is, it helps create excitement and anticipation for your product. A prelaunch campaign involves setting up a prelaunch page. This is a single-page website where you can offer discounts and incentives to potential customers in exchange for email addresses. Once you start gathering emails, you can nurture these by updating them and asking questions. Ask your potential customer base about product preferences, price fairness, etc. This will help them feel involved in your business from the beginning and foster loyalty. You might even gather some pre-subscribers during this phase too.

If you find you haven’t gathered many emails in the few months of your prelaunch, your idea might just not be right for the market. From there, you can tweak and adjust your strategy in order to find something that works.

Build Your Online Presence​

This is an extremely important step. It is important to choose a platform which fits your needs and is reliable. There are many platform options out there. However, there are three main types.

Subscription E-Commerce Platform

Using a platform specifically for subscription e-commerce businesses can make your process much simpler. Companies like Cratejoy and Subbly assist new subscription box companies to get started quickly and lend support, so you don’t have to “do it all yourself.”

Custom Platform

This would include creating your own website. It can take time and a lot of research, but platforms like WordPress make it easier than ever to launch your own website. There are a lot of options out there, so be sure to take a look at what other subscription box companies have done and what you think would work best for your specific needs.

Marketplace Platform

In a marketplace setting, you would be selling your product side-by side with many other similar products. If you don’t mind that the website isn’t focused on your brand alone, this option could be very helpful. Using a marketplace basically lets another party sell your product for you.

Price Your Box

Now, it’s time to figure out what products will actually be in your box. Take a lot of time to look for suppliers. It’s an important step, quite possibly the most important. Make sure to go with a supplier you trust that offers products you love (duh!). You might even want to try the products yourself first to make sure they have the quality you want to reflect in your business.

Another important consideration is how to ship your box. The Smart Parcel 24/7 hybrid shipping platform is able to ship your box through multiple vendors, rather than using just one courier, in order to save you as much money and time as possible. Not only that, but we will deal with the hassle of fulfilling your orders for you. All you have to do is ship us your products, and we will box it just the way you like.

Once you’ve decided on suppliers, what/how many items per box, website strategy, and shipping solution, it’s time to figure out how to price each box. Pricing your box with a 40% profit margin is a good rule of thumb. To help, Cratejoy offers a handy subscription box calculator.

3… 2… 1… Launch!​

Now that you’ve got everything figured out… it’s time to launch your business! Make sure to send your shipping network your products, so they can fulfill and ship as soon as possible. Reach out to the pre-subscribers and potential customers you gathered during the prelaunch phase, and tell them the date they should be expecting their first box.

Now, sit back, relax, and bask in the glory of your very own subscription box business!