A subscription box service follows the subscription business model, wherein a product or set of products within a particular niche is bundled together and shipped to buyers.
Because subscription boxes are pre-paid by customers, the company can deliver the boxes at a set date monthly, bi-monthly, quarterly or yearly.
In the United States alone, there are about 500 different kinds of subscription boxes.
They have varying prices, frequency of delivery, number of items included, and brands, which is why subscription boxes could cost somewhere from $5 to $200.
How Do Subscription Boxes Make Money?
Making money with a subscription box service is actually easy to explain.
Once you developed an idea, you source products to include into the box and estimate cost-per-box.
Let’s say you want the box to be priced at $25. You then find products to include in your box, compute fees on packaging, overhead and shipping and add all these expenses. The difference is your profit.
The more people you attract to buy a subscription, the higher you get to take home.
Of course, to add to your company’s revenues, you can incorporate other techniques like finding ex-deals from brands, negotiating prices of products directly from the factory or creating more types of subscription boxes.
Most Popular Subscription Box Service
Cratejoy is a directory of subscription box services, so if you’re just looking around and don’t know what to expect, this site is a pretty good resource.
Best Subscription Boxes for Men
The Loot Crate is a fantastic subscription box that mixes men’s apparel with accessories like pins and ties, along with other pop-culture toys. You can even choose which fandom you prefer to receive.
Stitch Fix Men ($20+prices of clothes/mo) is a service for those who don’t like shopping. Personalize your style choices, add sizes and other preferences, then surprise yourself with a couple of hand-picked clothing items to make a complete wardrobe.
>The Tie Bar($199/year) sends 1 tie a month to update your wardrobe.
Aside from clothes, men’s choices for subscription boxes also include grooming:
- Dollar Shave Club($9+/mo) bundles everything shaving related (razors, creams, and so on) each month so shaving will never be forgotten.
- Walmart’s Mr. Dashing ($10/mo) lets you test drugstore classics on a monthly basis.
- Birchbox Men ($10/mo) comes from one of the oldest subscription box service companies in the U.S.
Best Subscription Boxes for Women
The subscription-based industry is even inclusive. Gwynnie Bee is a women’s clothing subscription box that caters to sizes 10 to 32. How about some workout clothes from SweatStyle ($25/mo) or Running Bird ($40/mo)?
- Beauty: Birchbox ($10/mo) sends you a box full of sample-sized products to try out beauty products before they hit the stands. Lip Monthly ($10/mo) delivers a monthly supply of everything lippies.
- Skincare: BeautyFix by Dermstore ($25/month)
- Jewelry: EarFleek brings a pair of earrings straight to your door each month at only $3.50/month. mintMONGOOSE offers customized jewelry for $12/month.
Best Subscription Boxes for Kids
Kids have some of the coolest subscription boxes around.
The BRICKBOX Club ($19.99/mo), for example, sends buildable legos and mini-figs to kids.
Superpower Academy ($26.95/mo) is an educational box aimed at inspiring and empowering the next generation of leaders.
Those who love arts and crafts will go gaga for kits like the Mrs. Grossman’s Sticker Club ($12.95/mo), We Craft Box ($29.99/mo), GIRLS CAN! CRATE ($18.50/mo), or Green Kid Crafts ($17.95/mo) make it easy for parents to play and work on projects with kids.
Food, Books, and other Subscription Boxes
Of course, there are also other categories of subscription boxes, such as:
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Food, condiments, spices
SpiceBreeze ($5.60+/mo) introduces you to several spices from around the world each month.
Hot Sauce of the Month Club ($14/mo) is perfect for chileheads looking for the hottest of hot sauce in the world.
Freshly’s chef-prepared gourmet meals ($50/week), a box of sweets from Candy Club ($19 to $30/mo), a box of snacks from MunchPak ($10/mo), wine pairings from Wine Down Box ($70/mo), and exceptional meat choices from SumoJerky ($29/mo) and Carnivore Club ($50/mo) are just some examples of foodie subscription boxes.
Even your dogs and cats can get some regular loving from subscription boxes.
BarkBox ($21/mo) delivers toys and treats for your dogs, while KitNipBox ($20-$30/mo) is exclusively for cats. Similar services are Surprise My Pet ($30/mo) or the vet-approved pet boxes VetPetBox ($35-$50/mo).
How to Start a Subscription Box Company
Now that you see what kind of subscription box services actually sell, let’s talk about getting one setup.
The success of a subscription box service is mainly because of the convenience it gives to consumers.
If you’re interested in joining the subscription-based ecommerce, here’s a quick guide:
1. Start planning
When planning your subscription box company, you have to decide the type of box you want to bring to the market.
CrateJoy updates a list of subscription box ideas that haven’t been made into reality, or lack representation in the market.
Determine the type of box you want: food, beauty, education, pets, hobbies, lifestyle, tech, and so on. Once you’ve chosen your niche, you’d probably have an idea about your audience as well.
2. Brainstorm ideas
After you’ve decided on the major category, you have to conduct deeper research (especially with competition).
Is there a subscription box already in this category?
Would you provide a better service if you launch yours?
What’s the demand for the product you want to sell? Are people clamoring for it? Or just a small market?
Because subscription boxes are ordered online, research can be exclusively done online too.
3. Research products
Now that you’ve figured out what kinds of items you want to include in a box, it’s time to source your products.
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Do you prefer high-quality, branded products? Or do you prefer white label products that you can stick your own label onto?
You can go straight to companies in hopes of getting lower-priced deals. Sometimes, you can even bring their new products into your box free of charge.
Some boxes have products custom-made. For example, a razor that’s cheap, but works better than the branded ones, will become a bestseller once proven quality-made.
4. Set up your company’s online presence
You need to have a website with a secured payment system for accepting credit cards and other payment methods. If you don’t want to bother with a website, you can dip your toes and try out your product in a marketplace listing on CrateJoy.
Whether you choose a website, marketplace listing, or both, this platform is where people will check out everything about your product, register and subscribe to your service, and contact you if there are problems in the future.
And while you’re at it, make sure you get every major social media covered as well. Facebook, Twitter, Instagram, Pinterest and LinkedIn should be a part of your marketing plan. They’re free to open and widely effective in spreading word about a product, so take advantage of them.
A subscription box service is tricky because although customers want to receive the box at a specific day of the month and expects it to include clothing or makeup or haircare products, or so on, they still love the “surprise factor” of it all.
As such, you’d have to learn how to keep up the mystery, keep your subscriber base happy and grow your number of customers in the process.
Mix it up every now and then by adding a product not within that niche. Check feedback of your clients. And always always bring quality product to the market.
The Future of Subscription Box Services
Are subscription boxes a fad?
Well, this subscription-based commerce business model is still relatively new.
The earliest boxes recorded were in 2004 (“The Sampler” with craft and art products) and 2005 (“Granny’s Attic of Mobile” with painted ponies collectables).
In 2016, Unilever acquired the popular subscription box brand “Dollar Shave Club” for a billion dollars and the industry went wild. Many box services were launched soon after – many of which are still available today.
I say if you have a cool subscription box idea that fills a void, and there’s a continuous need for that product, then go for it.