Consumers spent over $31 billion globally on subscription box services in 2023 and that market is expected to keep growing. At the core of this growth is the idea that customers enjoy getting mail they actually want — and subscription boxes can help you solve very specific customer pain points while generating recurring revenue. In this article, we’ll go over eight steps on how to start a subscription box business. We’ll cover everything from developing the core concept of your subscription box business model and generating subscription business ideas to managing logistics and scaling the business.
A great subscription box gets customers excited when they get it. If your box offers great value and manages to surprise customers in some way while solving a specific problem, you may have a winning product on your hands.
Every business begins with an idea — and subscription boxes are no different. Let’s talk about how to develop that idea into a product.
1. Identify your niche, or target market
By and large, subscription boxes tend to focus on niche markets. There are subscription boxes that cater to all kinds of niches that have found success with WooCommerce: Kawaii Box is for lovers of the Japanese Kawaii “cuteness” culture. Universal Yums is for snack-lovers who want to try tasty treats from around the world. And MegaFit Meals is for those who want healthy meals specifically tailored to their fitness goals. Your niche is your target market or audience. Ideally, this will be a field in which you have experience. That experience should give you insights into the unique buyer personas for the kinds of products you want to sell. Take MegaFit Meals, for example. Their primary buyer persona is someone who prioritizes fitness and wants easy meals that help them achieve their goals. Identifying buyer personas is key to a successful subscription business because it enables you to offer a more personalized product, and 96% of marketers agree that personalization increases the likelihood of sales. With a new business, you want to take every advantage you can.
2. Decide what kind of products to include
The success of a subscription box depends largely on the products it includes. These products should fulfill a specific problem that your customers have. So, the next step is to decide what kind of products to include. To follow up on our earlier example, let’s say you have a target audience of fitness enthusiasts who don’t have the time or culinary knowledge to cook perfectly-balanced meals at home. They want to do it, but their schedules or expertise won’t allow it. Mega Fit Meals addresses that problem by shipping customers boxes with ready-made meals that meet these specific dietary needs. The products are the meals, which are made up of many ingredients. Note that some companies offer very complex subscription box products with a great deal of customization options. For a new subscription box, you probably want to keep things simple. That means not offering too many products in each box and testing multiple options to see what customers prefer. The fewer products your box includes at first, the fewer difficulties you’ll encounter when it comes to sourcing. As the business grows, you may be able to source more products and manage their logistics to expand what your box contains. That said, one of the main draws of a subscription box is its reliability, so you’ll want to start small. This way, you can establish your subscription service as dependable, even if that means offering fewer customizations at first. To get the ball rolling on your decision-making process, you can make a list of potential products and subscription business models and ideas. If possible, you can also start designing a strategy for testing out your products. For instance, if your subscription box includes randomized goods, you can start by varying the items you include for each batch. Combine that with customer feedback and data about retention rates — and you’ll have enough information to see what kinds of products your customers prefer. Think about this process as an analog A/B testing campaign. Over time, you’ll gain enough data to make informed decisions about what customers like best. When you’re just starting out though, it can be smart to research what your competitors are doing and use that to make initial product decisions. By competitors, we mean any other subscription box service in your niche, which you should be able to find through a quick search.
3. Find a unique value proposition for your subscription box
Once you start performing competitor research, you’ll notice there are a lot of subscription businesses. A lot of the subscription based businesses you’ll find online might not be doing so well, even if there’s an audience for them. In some cases, this can be because they don’t have a unique value proposition (UVP). Your business’ UVP is its hook. It’s the thing that sets your subscription model or box itself apart from other options, even when you occupy the same niche and target similar customer personas. To use an example of a business using the subscription model, let’s turn to Birchbox. This business sends customers boxes with cosmetics on a schedule. But before customers get their first box, they need to complete a questionnaire that helps Birchbox decide what products they can benefit the most from. The UVP, in this case, is that customers can offload the mental work of researching cosmetics and deciding which options to purchase. The business takes care of that for you, so all you have to do is receive the box and test the products. There is no exact formula for a good UVP. In general terms, you want this hook to be something that no other service offers. This can be unique products, an onboarding process, how you schedule shipments, exceptional customer support, and even your prices. Another great example of a subscription business with a great UVP is KiwiCo. Every month, the company sends customers boxes that include a new “project” for kids. This can be a toy that needs assembling, a recipe to cook (along with the ingredients they need), and more. In this case, the hook is that KiwiCo doesn’t just send you toys for your kids. It focuses on didactical projects with different offerings for each age group. This is great for parents who don’t have the time to hunt for new toys or who want to bond with kids over learning experiences.
4. Plan the subscription box delivery schedule
Subscription boxes come on a schedule. Depending on the box, your customers might be able to choose from a weekly, bi-weekly, or monthly subscription. The schedule on which your box operates will have a significant impact on how the business runs. The shorter this schedule is, the more difficult it might be to operate the business due to sourcing concerns and overall logistics. With that in mind, it can be a good idea for a new subscription box business to use a monthly schedule. This will give you time to work out kinks with the products, how you source them, packaging and shipping, and all the concerns that come with this line of business. Your ideal schedule will also depend on the products you plan to include with each box — a subscription box with groceries, produce, or single-use items, will need to ship more frequently than a box with candles. Note that you can always add new subscription options as the business grows and operations get into a good rhythm.
5. Decide the number of tiers of subscription boxes to offer
It’s often wise to offer multiple plan options for customers. This gives them a degree of choice in what they want while still earning you recurring revenue. But it can also help expand your potential customer base, with each plan targeting a different subset of buyer persona. Kawaii Box, for example, offers one-month, six-month, and one-year plans for their customers. If you want to use this subscription model, you’ll need to decide on the number of tiers to offer. The number of plans to include will depend on how the business operates. Just as with the subscription box schedule, it can be smart for new businesses to offer a limited set of options at first. Limited plan options mean less variability in terms of what customers want and the kinds of boxes you need to put together and send. As the business grows, you can look to incorporate more options for new customers. In terms of pricing, it can pay off to experiment. You can use data from competitors to decide on initial prices, but you also need to take your own costs into consideration. Offering multiple tiers gives you the opportunity to test different price points. If there’s a plan that customers prefer, it means you’ve hit a winning combination in terms of price and product offerings. In this section, we’ll cover the basics of setting up a WooCommerce store for your subscription business. We’ll guide you through the steps you need to take before adding subscription functionality to WooCommerce.
1. Pick a web host
WooCommerce works on WordPress. Since the content management system (CMS) is open source software, the first thing you’ll need to do is pick a web host. Different hosts offer different levels of support, performance, and security — all of which are important for an ecommerce operation. If you’re not sure how to find a reputable host, you can check out our list of trusted options for WooCommerce. If you’re creating a website for a new business, it makes sense not to spend too much money on hosting right off the bat. Instead, it’s a good idea to choose a reputable host, choose a straightforward option that meets your needs, and move on to the next section. Your provider should always give you the option to upgrade to plans with more resources if and when you need them. Also, it’s important to note that most good web hosts will automatically install WordPress for you. If yours doesn’t, you’ll need to install WordPress manually.
2. Install WooCommerce on your WordPress site
There’s plenty of documentation on how to install and configure WooCommerce. For this section, we’ll focus on the basics. When you activate WooCommerce for the first time, the plugin will launch a setup wizard. This wizard will help you configure the essentials for your ecommerce operation. To get started, click on Set up my store. The setup wizard will ask if you’re setting up a store for yourself or a customer. Choose the former option. Next, you’ll get the opportunity to create a name for the store, configure what type of products you plan on selling, and specify where your business operates. You can change all of these settings later, so keep that in mind. On the next page, WooCommerce will recommend a series of features for your store that depend on extensions. You can choose to add any extensions that meet your needs, or you can always install them on your site at a later time. After you click on Continue, WooCommerce will go ahead and set up the basic pages your store needs. That includes a Shop page, Checkout page, individual product pages, and a registration page for customers.
3. Choose a theme that suits your project
The next step is to choose a WordPress theme that suits your ecommerce project. The CMS offers thousands of options, both free and paid. Some layouts focus on specific types of projects, like portfolios, photography sites, and more. There are even WordPress themes meant specifically for ecommerce sites, most of which were built to be compatible with WooCommerce. If you have the option, you’ll want to opt for a theme that meets these requirements. Ideally, it should also offer plenty of customization options. This way, you can create a one-of-a-kind subscription site. A great place to start is with the Twenty Twenty-Four theme. It’s simple and straightforward, and serves as an excellent base for any type of ecommerce site. And since Twenty Twenty-Four is a block theme, you’ll be able to harness all the power and customization of the WordPress Site Editor. If this theme’s simplicity doesn’t match the vision you have for your subscription website, you can research other WooCommerce-friendly themes. Once you select a theme, you can install and activate it through the dashboard. For more guidance, see our post on how to choose a WooCommerce theme.
4. Get acquainted with WooCommerce
If you have experience using WooCommerce, you can skip this section. On the other hand, if you’re new to the plugin, you’ll want to spend some time figuring out how everything works and tweaking its settings. WooCommerce includes a large number of features, so it can take a minute to learn everything. That said, the best time to get acquainted with the plugin is now, before you start getting orders. This way, you’ll be prepared to welcome your first customers. To get started, check out these step-by-step guides on how to configure WooCommerce, which deals with technical settings we won’t be getting into in this article. WooCommerce doesn’t include subscription functionality out of the box, so you’ll need to add it. The best way to do this is to integrate a WooCommerce extension that gives you the subscription features you need. Then, you can install additional extensions to expand your customization options. We’ll go over how to do this in the next section.
1. Install WooCommerce Subscriptions and create your first product
The first thing you need to do is install WooCommerce Subscriptions and create your product. WooCommerce Subscriptions is an extension developed directly by Woo. It enables you to configure recurring payments on customizable schedules. Moreover, it integrates with over 25 payment gateways, which means you can accommodate the preferred payment method for lots of different customers. The extension also enables customers to manage their subscriptions from your website. They can choose to upgrade or downgrade plans, as well as cancel them without having to reach out to you. This is great from a user experience perspective. Once you install the extension, go to Products → Add New. This will send you to the WooCommerce product editor, where you can set up your first subscription product. To get started, enter a name and description for the product. Scroll down to the Product data section. In the dropdown menu at the top, choose from a simple subscription and variable subscription. A simple subscription doesn’t have any choices, while a variable subscription offers options to your customers — such as paying monthly or yearly. In this walkthrough, we’re going with a simple subscription. In the dropdown, select the Simple subscription option. The General tab will include multiple fields where you can customize your subscription price and schedule. To start with, look at the Subscription price ($) options. Set a price and use the dropdown menus to the right to configure how often customers will be charged. You can use the other settings to configure renewal options, signup fees, and a free trial. For a subscription box, it makes sense to configure the product to renew automatically until customers cancel. It can also be best to waive the signup fee as part of a promotion. Free trials can encourage new people to try your offer, but may result in high costs. This is something you can experiment with over time to find what’s best for your brand. If you don’t want to use free trials to encourage signups, you can opt for deals and promotions. WooCommerce Subscriptions enables you to run sales for subscription products on a set schedule, which can be a great way to get new customers. Before publishing the product, add a featured image and a compelling product description. Then, it’s ready to go live. We’re still in the setup process, though, so don’t expect orders to start coming in yet.
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