The Truth: Is It Worth Starting a Subscription Box Business?
I got asked this our Facebook Group: Subscription Box Entrepreneurs
As founder of ⚡️Subbly (eCommerce platform for subscription businesses), I had quite a bit to say on this topic, partly due to observing trends but also due to my predictions of the future! So decided to publish this article.
Edit: Before we dive in, I made a case in a recent vlog episode about why I believe every business is fundamentally a subscription business. Also years since writing this and subscription is bigger than ever!
In this article I will cover the trends, including some data, consumer behaviour, common pitfalls when starting, and my own anecdotal experience.
First let’s look at the trends.
If you look on Google Trends for “Subscription Box” you will see this… (it’s been shared many times before).
This shows a nice and steady increase of searches for subscription box, demonstrating the consumer demand. The spikes are Christmas time. Subscription Boxes are extremely popular gifts.
Amazon are testing a subscription box category on their platform. Need I say any more?
And one more for you.
The subscription e-commerce market has grown by more than 100 percent a year over the past five years.
This was quoted from Mckinsey’s research article about subscription boxes and consumer behaviour. Which I ❤️.
So you can see that this industry is still growing nicely. So that should cover the main quantitative approach to answering this question.
So so far, it’s a “yes”.
A couple of publications have said that the subscription industry has peaked but this is an assumption built on nothing but opinion rather than hard data. They need traffic to their site after all and what is more click worthy than scary news? If you look at the facts it’s clear subscription is here to stay.
It may not be in the form of “subscription boxes” per se but subscription is here to stay.
Consumer Behaviour
To further back this up, notice how everything is moving towards subscription? TV, music, online streaming, games, even food now (Amazon Prime Fresh) and beyond.
As consumers we’re getting more and more conditioned and used to paying for subscription services to get everything we need.
The big companies are shaping this. And it really makes sense from a convenience and time perspective. Humans are lazy anyway.
So in order to try and answer the question if it’s worth it.. we need to first look at why some people hit a wall with starting their business.
Common Misconceptions Needing Broken Down
#1 — It’ll be easy
When entrepreneurs stumble across the subscription box business model, they get excited. Understandably so! Recurring revenue with the same effort to get a customer? Where do I sign up?
People make the incorrect assumption that it will take the same effort to get a customer, if not easier in some cases, due to the fact they believe in their product/idea so much.
Makes sense, it’s their baby and no one is more excited about it than the founder themselves! Starting a business is just as exciting as it is stressful. Anything is possible!
The truth is that it’s hard, probably harder than normal ecommerce and here’s why…
One tool for all entrepreneurs is empathy. We need to put ourselves in the consumer’s (your potential customer) shoes for a second.
Let me ask you… Would you be interested in subscribing, RIGHT NOW, to a $10/mo toothpaste subscription box?
Probably not, sure it’s convenient, yes it’s great quality, yes you need it all the time and yes the price is affordable.
But… I’m asking you to commit to a subscription. That’s scary!! 👻
You see, us humans are thickle. We don’t like committing. We don’t like spending on most things. We are risk averse usually.
#2 — My idea is unique so it will be a success
The other thing that commonly happens with new start entrepreneurs is they are very focused on the idea.
Finding that idea that’s never been done before.
That finding an idea thats new and unique is the key to success.
The truth and spoiler alert. It isn’t.
Ideas are cheap, execution is expensive.
Look at Facebook, it wasn’t a new idea. Amazon certainly wasn’t the first online retailer. Apple didn’t make the first computer.
It’s all about the execution.
Entrepreneurs commonly are passionate about their idea. Makes sense. So passionate that they blind themselves.
The best ideas are the ones which people respond to, they have demand. There is a problem they are solving.
Ones that once executed upon, add VALUE and LOTS OF IT!!! Please internalise this. People buy when they receive value, they don’t buy the idea. What’s in it for them? Are they getting their moneys worth?
My Experiences
I have seen thousands of entrepreneurs start their subscription businesses running Subbly. It’s been so insightful. And let me tell you these are the biggest misconceptions and sticking points for new entrepreneurs.
Once you let go of these, then anything really is possible in the parameters of reality.
So is it worth starting a Subscription Box Business?…
With all that said… 100% YES.
When you understand the above, that it’ll take hard work, good execution, trial and error, and persistence, then subscription business models can be far more rewarding than typical business models.
They also make fantastic additions to existing businesses as well for increasing customer lifetime value and creating stronger than ever relationships. There’s a reason most big smart companies are adding a subscription component.
If you’re interested in starting a subscription box then don’t forget to check out Subbly. Here’s some reviews about Subbly some of our lovely customers have wrote.
