How to Build a Subscription Box Business: Step-by-Step Instructions

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Consumers have really gravitated to the subscription box concept. It makes sense that this business would be successful; who doesn’t love receiving cool, new products on a recurring basis? Entrepreneurs make their money via recurring payments, and the overhead and start-up costs are relatively low. Overall, subscription boxes are an excellent business model.

If you’re inclined to start your own subscription box service, keep reading to learn how you can corner your own niche in this exciting new business opportunity.

Step 1: Learn the Business

Before you can start a subscription box service, you need to learn how the service works. Basically, it’s all about what goes in the box, how much you charge, and how you collect payments. In order to remain in business, you have to generate revenue. This is done via recurring billing, or subscription billing, such as what’s offered by Chargeover, a leading automated recurring billing service. You’ll need to use a service like that or manually process your invoices yourself, but manually processing invoices takes longer and can complicate matters.

You’ll need to learn what it costs to start this business, and how you’ll go about generating those funds. You can seek investors, take out loans, or pay out of pocket. Your products may be donated by companies looking to market themselves or purchased in bulk. You’ll also need funds for technology, such as computers, mobile devices, websites, security, and more. Do your research to learn what other companies have spent.

Step 2: Come up with a Niche Idea

The first subscription boxes were wines purchased in wine clubs, but the industry has grown to include jewelry, makeup, beauty samples, shoes, pet stuff, and even weekday dinners. The aforementioned subscription box niches are the most popular; therefore, they’re also the most competitive. If you’ve got an original idea, you may generate interest faster than if you try to overcome industry giants, such as Birchbox the beauty industry’s most popular subscription box.

Basically, the interest you generate directly correlates to how niche your products are. For example, Paul Jarret, one of the founders of Bulu Box, recognized there wasn’t a subscription service for health, nutrition, and weight loss products. Today, the company has more than 30,000 customers and makes more than $100,000 in monthly revenue.

Step 3: Do Some Market Research

It’s very important that you know your customer, and this knowledge is achieved through market research. “…marketing research can tell companies whether they are meeting their customers’ needs and expectations,” reports Entrepreneur.com. “By researching the answers to specific questions, small-business owners can learn whether they need to change their package design or tweak their delivery methods – and even whether they should consider offering additional services.”

You can hire a firm to conduct this research for you, but can you afford it? If not, you’ll have to conduct the research in-house. It’s not impossible to conduct quality market research on your own, but it is time consuming. You’ll want to set up focus groups, do interviews, conduct surveys, identify your competitors, establish benchmarks, and identify your target demographic.

Step 4: Put Together a Prototype Box

Your initial prototype shouldn’t be a physical product, but rather a digital prototype. This design doesn’t cost anything and can be shown during your market research phase. During that time, consumers will have given you feedback which helped you develop packaging and contents. Once you’re sure of your digital prototype, you can go ahead with the physical prototype.

Basically, your prototype should be big enough to fit all your amazing products, but small enough for inexpensive shipping. Any wrapping, paint, etc. should be safe to handle for consumers. The last thing you need is a class-action lawsuit because you painted your box with lead paint. Finally, make sure your branding is large and eye-catching.

Step 5: Promote, Share, and Sell

The final step is to build up your subscribers. You’ll need to promote the box, as well as get others to promote it for you. You can get people to refer their friends and family by offering them discounts, or by starting a referral program which rewards them with free boxes for sign-ups. You can also give free boxes to influencers who will publish reviews and video unboxings. Overall, the most important thing is to not give up. Keep promoting your box, and in time it may catch on with consumers and become the next big thing.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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