With reoccurring revenue running a successful subscription box
company can be more secure than your nine to five job.
When done right, subscription boxes provide predictable
and stable income.
So if you want to learn how it's done right,
just keep up on watching.
If you guys are new to this channel, welcome
to Learn with Shopify.
My name is Michelle Bali and I'm your host.
We're a channel dedicated for small business owners with big plans.
And every week we release a new video on how to start and
grow your online business.
So make sure that you're hitting that subscribe button
right now so that you don't miss out on any future videos.
So in today's video, I'm going to teach you how you can
take your idea of starting a subscription box and turning
it into a real business.
I want you to get started on your business right away, so we're
going to cover the important details, like what items you
should include and how you can get started with a small budget.
Subscription model.
Okay.
First things first, let's talk about how the
subscription model works.
Customers will receive packages from you on a recurring basis.
And this could be monthly, every few months, or annually.
For you as a business owner, this recurring revenue model is going
to lead to higher overall revenues.
Look at this chart here.
The initial outlay gets paid off over time, and
then it grows exponentially.
So you can see how this can be pretty lucrative.
Subscription box ideas.
The first step in starting a successful subscription
box is choosing a niche or a theme for your box.
Here's some common niches to give you some ideas.
You can start a fitness subscription box, a food
box or a beauty box.
So for example, you can include hot sauces for spice
lovers, paints for artists, or even gear for rock climbers.
Let me know what your niche is in the comment section below,
and I'll give you an estimate of how competitive that niche is.
It pays to offer consumables that need to be replaced
regularly, like groceries, home maintenance goods, and even books.
So clothing is not considered a consumable, but styles
come and go so quickly that this niche works as well.
In addition to consumables mix in items that can be reused.
That way, every time a consumer uses your item they
remember you as the brand that added value to their life.
I recommend that you choose a niche that's of genuine interest to you.
Your goal is to solve a consumer problem with your subscription
box, and if you're essentially marketing to yourself, you'll have
the advantage of understanding the consumer, and if you speak
your target audience's language and know what they like and they
don't like, you'll have a better chance at being successful.
What to put in a subscription box.
Here's what to put in your subscription box.
Start with three to five items that are small enough to fit in
your box and the light enough so that you save on shipping
costs, make sure that each item falls under the niche of
your subscription box as well.
And you want to make sure that your products are
satisfying an actual need.
Otherwise, they're just going to end up in a pile in
someone's closet, and then they'll eventually cancel.
Capitalize on trending products by looking at publications and
Google trends so that you can ride a wave before it hits.
You must absolutely make sure to include a card in there as
well with product information.
Communicate why each product is special, telling a story, makes
the experience more enjoyable and it makes the customer look
forward to their next box.
It also helps to list what each product retails for so that the
consumer feels like they're getting a really good bang for their buck.
Also, if after watching this video, you want even more help
finding a product, make sure that you're checking out our free 40
minute webinar, that's going to teach you how to find winning
product ideas, how to validate them and how to get started.
Just click the link in the description box
below to get started with this free training now.
How to source products for your subscription box.
To source product for your subscription box, start reaching
out to companies via emails, Instagram DMs, and even LinkedIn.
You're going to want to introduce yourself, let them know about
your business and explain to them why it would be beneficial for
their product to be in your box.
Tell them how many of the products that you are looking
for so that you can work out a deal for a bulk order.
Here's what an intro email could look like.
Hi, my name is Michelle.
I'm the operations manager at beard oil box.
We're a monthly subscription box that offers sample sized beard
oils with scents that are curated for each individual subscriber.
I'm reaching out to see if you'd be interested in being
featured in our September box.
I would be looking for an order of fifty to a hundred units,
and I'm interested to know what kind of pricing you could offer.
Looking forward to hearing from you.
Be prepared to knock on a lot of doors.
Sometimes you're not going to be able to agree on a
budget or the company might just not be interested,
but don't get discouraged.
Just keep reaching out until you're able to get enough products
to fill your box, make sure that you're registering your business
and make sure that you have insurance because vendors are
going to ask you for this before they start to work with you.
Other ways to get products for wholesale prices are on Alibaba.
You can try Faire and also local stores and Etsy.
Now, Alibaba is going to have some hit or miss products
when it comes to quality, so just be aware of that.
But I particularly like Faire because their vendors
are vetted and they also have some free returns.
If enough of you are interested in knowing more about how you
can source wholesale products, just let me know in the comments
section, and I could make an entire video on just that.
Shopify is offering a free 14 day trial.
All you have to do is click the link in the description box to
take action so that you can level up your e-commerce business.
Now, maybe you want brands to give you their products for free.
This is actually possible.
Brands are actually willing to eat the cost of their product, only if
your subscribers are an audience they want to get in front of.
They would consider this to be a marketing cost.
But in order to get free product, that means you must
already have an audience.
It's a bit of a process, but to get subscribers before launching
crowdfund with Kickstarter or Indiegogo, otherwise you can just
adopt this business model once your company is more established.
Free product sourcing ofcourse means higher profit margins, but
be aware that you'll have to invest time into pitching brands on why
they need to make the investment of being included in your box.
How to design a subscription box.
There are tons of businesses out there that will
customize your boxes for you.
You can check out ARCA for example, but at the early stages, you're
going to want to start lean.
So fancy, customized boxes are an unnecessary expense.
Customized boxes can cost you anywhere from two to $5 per box.
So you're going to want to find work arounds, get a custom stamp
made with your logo and use it on blank boxes over and over again.
You can also brand your boxes with stickers or customized tape.
You can include college crinkle shred that
matches your brand colors.
I know you line sells 10 pounds for 47 Canadian dollars.
Cost to start a subscription box.
So how much does it cost to start a subscription box?
Your expenses will include your products, your website, your
shipping, and your marketing.
Your Shopify store starts at $30 a month, plus the cost of any apps.
So you're going to want to check out bold subscription.
This is the number one subscription box on the Shopify
store, and that's going to cost you around $40 a month.
You can sell any product and make it reoccurring, and that's going to
give your customers the flexibility to update their plan as they like.
So to cut on shipping costs, make sure your box is as small
and as light as possible.
What type of shipping service you go with is also going to
affect your profit margins.
Air shipping with tracking will be more expensive than just
say ground shipping without tracking, but customers do
expect little to no shipping charges for subscription boxes.
So instead of paying full price, it might actually be worth it
to get started with a shipping brokerage, like eShipper.
eShipper is a free tool that will give you shipping
rates at a discount.
So I'll make sure to link that up in the description box below.
When it comes to marketing, you can use free tactics like
SEO, Pinterest marketing, and starting your own YouTube channel.
In comparison to paid marketing, free tactics take time before
you can start seeing results.
But if you're looking to use paid marketing, you
can run social media ads.
You would have to consider the cost of paying someone to set
up your ads, as well as the ad spend, which is what you would
pay Instagram, Facebook or Google to actually show your ads.
Expect to spend anywhere from two to $5,000 a month on this.
You can pay influencers or publications to speak about
your subscription box as well.
This figure also will vary, but you can spend anywhere
from 500 to $2,000 on PR.
Once you have an idea of what your marketing budget is,
the cost of shipping, as well as the products themselves,
then you're going to want to figure out what you'll charge.
If you position yourself as a value box, you can charge
anywhere from $1 to $15.
A mid tier box is going to cost 16 to 30, high end boxes
will be 31 to $50 and luxury boxes will cost $50 or more.
So think about a profit margin that you would be happy with.
And that's going to answer the question as to where you
should be positioning yourself.
Handling fulfillment.
If you start with say 20 customers, and you have five items per box,
that's still a hundred items that you have to store somewhere, and
that you have to oversee that all these boxes are packed correctly.
So make sure that you have enough space or you can even rent a
space out, but as you grow, I would recommend hiring a student
to manage your fulfillment.
You might be entitled to go with a budget fulfillment
company, but I would highly recommend against that.
Fulfillment companies that charge a dollar per package sent are
not going to go the extra mile to get your order sent out right.
Top subscription boxes.
So let's take a look at some of the most successful subscription
boxes, and that should start giving you some ideas.
Birchbox.
Birchbox sends it subscriber a box of four to five selected
samples of makeup or other beauty related products.
Their plans start at $13 a month, and as of 2014, the company
was valued at $485 million.
As of May 2019, Birchbox had over a million subscribers and
2.5 million active customers.
Birchbox man.
First box was a beauty subscription box that was originally created
for women, but they have since started targeting men.
They offer men's grooming products like beard oil and bodywash.
Male grooming is on an upward trend, so this was a
smart choice for Birchbox.
Dollar shave club.
In 2012 shave club was one of the first to break into
the subscription box scene.
After they released a funny video ad that went viral.
They are highly competitive with their intro offering,
including handles, blades and aftercare for the price of
just blades at the drug store.
Subscription boxes for men is a trending niche.
Some of the best subscription boxes for men include bespoke
post, style plan by Frank and Oak and society socks.
By now you should be pretty comfortable with getting your
subscription box business started.
Do you still have questions?
If you have some questions, make sure that you're leaving them in
the comment section below and I will do my best to get back to
each and every single one of you.
Learn with shopify is a channel dedicated for small
business owners with big plans.
Every week, we release a new video on how to start and
grow your online business, so make sure that you're
hitting that subscribe button.
I'm your host, Michelle Bali.
Thank you so much for watching and I will see you in the next one.
Bye.