How To Scale up and Grow Your Subscription Box Business
One of the best ways to make money online these days is to start a subscription service. The benefit is that you generate a lead that becomes a customer and the lifetime revenue from that original lead is pretty substantial since they keep paying every month.
There are so many ways to start a subscription box business that it boggles the mind. It’s quite a unique business model, but at the same time it is very much like other businesses. In other words, there is always some room to be able to save some money on your operations and to use some tried and true methods to grow it.
There is a delicate balance between spending your efforts to save money and increase profits that way and spending it to increase sales and revenue. If you are happy with the money that you are currently making on your subscription box business, then congratulations. However, no matter how much you are making there are ways to make even more.
In this article, we will go over some of the ideas that you can incorporate in your business to scale it up for more success.
Stand out with your packaging
If you are unsure of how much an impact packaging has you need look no further than Apple to see that it matters very much. Apple has made it so the package creates almost as much excitement as the product itself. The right packaging makes it feel like you are getting into something special and then you start feeling more excitement to get further into the package to see the inside.
The reason for this is that many people make purchases out of emotions. If you can tap into these emotions then you will have a long term customer that wants to continue the relationship with your brand. Custom shipping boxes should be on the very top of your priority list.
You’ll need to do some research to make sure that your branding is on point so it can be displayed on the box and make it trigger those emotions in the customer. The logo and the font should be developed in such a way as to convey what your brand is about.
If your product is whimsical then the logo and colors with the design should reflect that. If it is posh then the branding should match that.
The best case scenario about the packaging is when people are excited enough about the packaging and product that they share the unboxing on social or at least show off the product. This creates a buzz around your brand.
When your packaging is dull and doesn’t create much excitement then it becomes harder to retain those customers to keep on ordering every month.
Fulfillment services vs DIY shipping
In so many businesses, outsourcing is one of the best ways to scale. The idea is that you pay somebody to do the dirty work so you can focus on growing the business. If you want to save money then you are probably tempted to do the picking and shipping yourself. And, truth be told, there is a lot of software out there that can help you do this yourself somewhat efficiently.
However, even in the best of situations you are still being distracted with grunt work that could be best done by others. Even with an in house fulfillment with employees doing the work, you are still dealing with it at some point during the day.
The best way to go forward and be able to grow your business is to take yourself and your company out of the fulfillment aspect of the business. The ironic thing is that you will end up saving money when you outsource. For starters, many of these fulfillment companies have special rates for shipping that they enjoy. You’ll pay a much higher shipping rate than they do.
Doing the shipping yourself will involve needing to negotiate with shippers and hope that you are getting the best rates.
Optimize your payment plans
There is a science when it comes to how much to charge for your subscriptions. It isn’t as easy as just crunching some numbers and Just making sure that your prices are similar to your competitors.
Playing with the pricing can make a dramatic difference in sales and revenue in the future so be willing to move around on the price structure. You should definitely be thinking about your expenses and the cost of goods sold. How much does it cost to produce and also to make a sale? Get your prices to hit a profit margin that will be sustainable so you can make more money off of the same number of sales.
Undercutting your own prices because of a competitor is a losing strategy. With the right product and strategy you can charge more than you are and not lose customers.
One way to compete on price without having to lower yours is to add value. Rather than match prices with your competition, make sure you are providing far more value than they are. You can create bundles with additional products that arrive monthly and charge accordingly. Or, you can even give a bonus box if your customer stays loyal for a designated amount of time. Let’s say they don’t cancel within a year then they can receive a bonus box or bonus goods in their boxes as a reward.
Give people a reason to want to spend more money instead of enticing them with low prices. It devalues your product and doesn’t create loyalty from them.
Scaling a business is not easy, but with the right plan, it can and will be done. It’s just a matter of pushing the right buttons to get your business to the next level. The tips above will give you the basic ideas to get started but you should dive deeper into each to see how your business can benefit from any of them.