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Every entrepreneur in the world loves to see repeat customers!
The reason is quite simple - repeat customers give you more and more business with no customer acquisition cost. It’s free!
In other words, it’s more revenue and profits without spending on paid ads. And perhaps, that’s one of the primary reasons you’re looking to start a Shopify subscription box business.
Or maybe it’s the recurring payments that have attracted you toward this business model.
Well, whatever could be your reason to sell subscriptions on Shopify, just know that you’re in the right direction and at the right place.
In this blog post, we’ll help you with the essential details you need to know for starting your subscription business with Shopify - including the pros and cons, subscription business models, step-by-step guide, best subscription apps for Shopify, and much more.
In general, a subscription business model is about selling products or services to customers on a regular basis in exchange for recurring payments.
Until a few years back, the subscription business model was popular mostly for the likes of gyms, magazines, software, and service companies. And I’m sure you know the famous names like Netflix and Spotify very well!
But then came the new player in the game–the subscription box business model!
This business model revolutionized the subscription concept by applying it in product-based businesses. It basically offers recurring physical deliveries of the products that customers require on a regular basis. Here are some subscription box business ideas: food, coffee, personal care, beauty products, just to name a few.
Some examples of popular subscription box businesses are Blue Apron and HelloFresh (food business), Dollar Shave Club (grooming products), IPSY (beauty products), Stitch Fix (clothing business), etcetera.
But that does not mean that only these types of businesses can adopt the subscription business model. Almost any type of business can offer subscriptions if you use the right strategy.
In this business model, customers can start a subscription to certain products to be automatically delivered at a specific schedule. You can charge the subscription amount to your customer on a specific date and deliver the subscription box products as per the schedule.
Any products that are used or consumed on a regular basis and need to be replenished are suitable for this business model. For example, products like groceries, pet food, personal care items, vitamins, sanitary products, etc.
Here are some interesting statistics: The average spent on groceries per week is $120 and the average time spent on grocery shopping is 41 minutes. Just think what if you can save this time for people by delivering groceries to their doorsteps every week? You got an idea, right?
As the name suggests, the curation business model focuses on delivering products that are curated or personalized based on a theme or customer preferences. For this business model, more suitable products would be the ones that have a higher potential for customization or to provide novelty on a regular basis.
Thus, clothing, apparel, beauty, and food products can do well under this model.
For example, Blue Apron–a meal delivery service–offers different options to its customers to personalize their meal kits. Customers can choose a meal type, the number of servings, and meals per week.
Blue Apron gives meal preferences to their customers that can be updated at any time.
The access subscription business model is more popular in software products and online streaming businesses. That said, it is used by a product-based business as well.
In this subscription model, customers pay a certain fee to get a monthly or annual membership that gives them benefits in either pricing or other exclusive benefits such as free shipping or early access to the products, etc.
This model can be used by almost any business that has frequent buyers. You can create exclusive membership discounts or other benefits to reward those repeat buyers and keep them coming back to your business.
For example, NatureBox gives its members a sense of exclusivity by offering special discounted prices.
NatureBox has a membership offer for their branded snacks at 20% to 40% off.
Before starting any new business, you should analyze all possible advantages and disadvantages. Here are some pros and cons of this business model:
Steady Source of Revenue: One of the best things about this business model is that you can get a predictable and steady income from your repeat buyers. In technical terms, it’s called “Monthly Recurring Revenue” (MRR). Also, it helps you to forecast potential revenue for your business.
Reduce the Customer Acquisition Cost (CAC): Did you know that it’s 6 to 7 times more costly to get a new customer than to keep an existing one? As the subscription business model encourages customers to continue purchasing from your business, it can help you reduce the cost of finding new customers and increase your profits.
Higher Custom Lifetime Value (CLV): The subscription business model gives you the opportunity to build loyalty and long-term relationships with your customers. As a result, your average customer lifetime value will increase.
Delighted and happy customers: Customers are typically offered discounted prices for their long-term commitment and business. Also, they can get to enjoy the comfort and convenience of receiving their favorite products at their doorsteps without going through the hassles of repeatedly shopping for them.
So, it’s a win-win deal for both business owners and customers.
Like any other business model, a subscription business model too can have certain challenges.
Offering novelty to retain customers: In this competitive business world, you need to be creative and keep coming up with new ideas to keep your customers excited. It could be related to either your products or offerings but customers would need a good reason to stay with you. And if you don’t give them any, they would be likely to unsubscribe from their plan.
Seasonal changes: Depending on the kind of products that you are selling, you may need to be mindful of seasonal changes and their impacts on the consumption of certain products. While this may be a challenge to tackle, you can convert it into an opportunity to deliver relevant products to delight your customers.
Now that you know the ins and outs of Shopify subscription box business, let’s explore some different subscription product ideas that might help to create your new subscription offering (and revenue stream) for your store.
Below are the most popular Shopify subscription product ideas in 2022:
Bokksu is a Japanese subscription-based single product store
If you are new to Shopify or wondering how to sell subscriptions on Shopify, we’re here to help you with the step-by-step guide that includes some of the best practices that every new store owner should take care of.
Before you start your subscription box business, you need to lay a solid foundation.
By the way, if you already have a business set up and you just want to implement a subscription business model, you may skip this step. But if that’s not the case, it’s crucial to take care of some of the fundamentals, such as research and testing, especially when you’re looking to start a product-based business.
Finalize the niche and products: Brainstorm and identify what you want to sell and who will be your target customers.
Market Research: Use Google trends to analyze the potential demand for your product. You can even perform research on platforms like Amazon and Etsy.
Competitor Research: Check out who all are your competitors in the market and know their strengths and weaknesses.
Test your product: If you’re going to use a third-party supplier, order the product for yourself. Send your products to some friends or family members and get their feedback.
Brand Name: Choose a great brand name and make sure the domain name is available. (You can buy the domain name from Shopify or a third-party provider as you wish.) It’s also advisable to create your social media accounts with the same name across all platforms.
This step is your opportunity to create a ‘Unique Selling Point’ (USP) for your business.
If you want your business to stand out in the market, your business needs to have a USP. During the research stage, you may check out different brands and their subscription plans to get an idea or inspiration but make sure that you come up with your own unique idea.
Here are the key aspects that you need to consider in your strategy:
Finalize the subscription model: Decide on which subscription model you want to adapt. This may depend on what products you want to sell and the ideal frequency at which customers require those products.
Decide on the product pricing: Not all customers would become your subscribers immediately. Some may want to try it out first and then go for a subscription. So, it’s advisable to decide and set the pricing for individual products as well as for the subscription box.
Prepare the plans/packages: Decide on how you want to package the benefits with the subscription plan. So, this may include things like:
Since Shopify offers a 3-day free trial, you should ensure that you make the most out of it. So first, complete all the planning and strategy tasks and then proceed with your Shopify store creation step.
Once you’re ready to start building your store, click here to start your Shopify 3-day free trial and get 3 months for US$1/month. Fill in the basic details about your business and your store would be ready to build.
Learn more: Shopify Tutorial: Set Up Your Store from Scratch to Finish (2023)
Shopify’s 3-day free trial lets you start building your store and get familiar with the platform
For any online business, website design is a huge part of its brand identity. Thus, customizing your store is one of the most crucial parts of the entire store building process.
There are two ways you can customize your Shopify theme:
A. Customize your store using the built-in theme editor
B. Use GemPages page builder app to customize your store
With GemPages, you get complete flexibility to customize your store with the drag-and-drop editor. So, you can custom build your own home page, collection pages, product pages, landing pages–to enhance the look and feel of your store pages.
We have a complete guide here to help you in detail on this topic: How to Build Custom Shopify Pages That Sell. Also, one more additional benefit of building your store with GemPages is that you get a template that is designed specifically for the subscription business model.
GemPages has a huge library of templates to help Shopify store owners build their website quickly and easily
When it comes to setting up products and collections in your Shopify store, there are some critical aspects that you should take care of.
For example, you need to ensure that product listing is done in a way that is SEO-friendly. Also, if your store has multiple categories of items, creating different collections can make navigation and search easier for your customers.
While all these may seem like a quite daunting task, we’ve got you covered with this step as well. Below are the two GemPages articles that could be helpful to you:
To manage your subscriptions and Shopify recurring payments, you need to install a subscription app on your store. Since there are many subscription apps in the Shopify app store, we’ll provide you with some recommendations to make this step easier for you.
Apart from the page builder and subscription app, there are some other apps that can be helpful to almost any type of business. For example, there are Shopify apps that can help you increase your sales with different strategies such as email marketing, upsell and cross-sell, loyalty program, product reviews, etcetera.
Using your subscription app, you can create your subscription plan with specific products that you want to offer as a part of the subscription box. This process may vary depending on the subscription app that you choose.
For example, one of the popular subscriptions apps–Appstle Subscriptions–lets your create three kinds of plans:
1. Pay As You Go, 2. Prepaid One-time Plan, and 3. Prepaid Auto-renew plan
You can create and manage subscriptions from Appstle Subscriptions dashboard in your Shopify admin
Make sure that all settings are properly configured, especially payments, checkout and accounts, shipping and delivery, taxes and duties, and notifications. Those are some very critical settings for your Shopify store.
For any business, having precise and clear documentation of the policies is a vital part of the business. It provides clarity and transparency to your customers and also protects your business from a legal standpoint.
It’s advisable that you consider all different aspects and possible scenarios of your subscription business and include the policy or terms in your store policies wherever applicable. Also, you can create an additional page dedicated to your subscription policy. You may seek help from a legal writer who has expertise on the subject.
Once you have everything set up, it’s time to launch your store. After putting in all the hard work and efforts to build your online store, launching it gives you a sense of accomplishment. But remember that the job is not done yet.
Building and growing your business is an ongoing process that never ends.
Post launch, the first thing that you need to ensure is that you raise your brand awareness and get those potential customers to visit your store. Make sure that you have submitted your sitemap to Google Search Console and you have other important tools to analyze your store’s traffic. For example, free tools like Google Analytics and PageSpeed Insights could be very helpful to you.
Since managing subscriptions is one of the most crucial aspects of your business, it’s imperative that you choose the right app from many different options available to you.
For your quick reference, we’ve shortlisted the top 5 Shopify subscription apps that we recommend:
With over 1700 reviews, Appstle is one of the top-rated subscription apps on the Shopify app store. Its pricing structure is beginner-friendly to start and grow your subscription business.
Pricing and plan:
Recharge Subscriptions app provides you with a merchant portal to create and manage your subscriptions. Also, it helps your customers with their own portal so that they can manage the deliveries of their subscribed products.
Pricing and plan:
Bold subscriptions lets you manage your business along with the subscription metrics. Also, you can provide your subscribers with a self-manageable portal where they can manage their orders, delivery intervals, payment and personal information.
Pricing and plan:
The app offer a 60-day free trial and its only paid package is of USD $49.99/month.
This app not only offers subscription features but also other useful features that can help you boost your customer loyalty. It also has very affordable pricing plans.
Pricing and plan:
Although Yotpo Subscriptions is still relatively new in the subscription apps category, it’s an app from one of the well-known eCommerce marketing platforms - Yotpo.
Pricing and plan:
This app is free to install and the paid plan starts once your store exceeds $500 in monthly subscription sales. It would be 1% per additional transaction with no monthly fees.
Looking at the ever-growing opportunities in the subscription business economy, competition is bound to be there. But what’s important is how you stand out from the competition.
Here are some of the actionable tips that you can start implementing in your business right out of the gate:
In this digital age, there are endless marketing options. It’s crucial that you pick the right marketing strategy and focus on the channel that’s most close to your target audience.
For example, if you’re selling beauty products and your target customers are mostly youngsters, influencer marketing and Instagram could be great options for you. You can also send your subscription box to a few influencers for them to create and share unboxing videos.
Helpful article: Learn about Shopify Collabs: What Is It and How Do You Use It?
In simple terms, a landing page is a dedicated web page where your potential customers land after clicking on a link or call to action (CTA). So, if you want to take your subscription offer to the next level, you should present it with a compelling landing page that explains how your customers would be benefitted from your subscription offer.
So, we discussed earlier in this blog post that coming up with novelty in your products could be a challenging aspect. But you don’t have to always come up with new products. Sometimes, sending your customers a small gift as a gesture of gratitude can give them an unexpected joy and smile on their face.
Will it cost you a little extra? Yes. But will it help you build a better relationship with your customers? A big time YES. In fact, little things like these go a long way.
Building community is one of the most powerful ways to boost engagement and loyalty amongst your customers. Also, it provides you great insights about the customer needs and helps you to come up with new ideas for your subscription box offers.
Your loyal community members are like your brand ambassadors. And one of the biggest advantages of building a community around customers is word-of-mouth marketing. According to Semrush, word-of-mouth contributes $6 trillion in annual worldwide spending and is responsible for nearly 13% of all sales.
Read more about Strategies to Increase Your eCommerce Subscription Sales
Joshua Tree Coffee’s subscription plans provide exclusive offers and immediate savings to its customers.
Joshua Tree Coffee Company is a great example to start with (because I know, entrepreneurs love coffee). The first thing that you may notice on its website is the awesome look and feel of the home page. In fact, the entire website is beautifully designed with fresh and clean look.
The company’s primary mission is to produce and sell premium organic coffee that can help protect farmers and the environment. With over 3800 reviews on their store, it clearly indicates that their Coffee Club subscription is loved by their customers.
Joshua Tree Coffee offers various choices to its customers - including coffee type, size/quantity, frequency, etc.
John’s Crazy Socks is truly a brand to be inspired from.
John’s Crazy Socks has a heart-touching story behind its fun-loving brand. John’s Crazy Socks is inspired by John Lee Cronin - who was born with Down syndrome. This father-son social enterprise is not just about selling socks but its primary mission is to spread happiness.
John’s Crazy Socks donates 5% of its earnings to Special Olympics and has already gathered more than 20,000 Happy Reviews. They have a “Sock of The Month Club” monthly subscription offer and have had success using the Shopify app–Bold Subscriptions.
Join John’s “Sock of The Month Club” to support his social enterprise and receive high-quality crazy socks
GreenUp Box subscription business promotes the eco-friendly and zero-waste plastic swaps that are curated seasonally.
GreenUp Box offers a subscription box that contains artfully crafted and eco-friendly items curated around a theme. It can be also used as corporate gifts especially when you’re working with business clients that value sustainable and eco-friendly items.
The two GreenUp Box plans are the quarterly plan and annual plan.
The GreenUp Box subscription plans offer savings on quarterly and annual plans
Subscription box businesses offer what customers love the most - savings and convenience! And thus, you can definitely say that they are here to stay for a long time.
Many businesses have already started implementing this into their businesses. So, if you’ve been thinking of starting your own subscription business, now is the time.
With the right tools and strategy, you can leverage the subscription business model. Shopify with GemPages can be a deadly combination to start, launch and scale your subscription business. And with both of them offering free trials, you have all that you need to give it a try.