Top 5 Things You Need to Know About Subscription Box Business Model

subscription box business model

Get information on the benefits of the subscription box business model, and the companies thriving in the subscription box industry. Learn about the resources that can help you run a successful subscription box industry.

The subscription box industry came into the scene in 2004, when the first subscription box, The Sampler, became available to the market. Since then, the subscription box industry has experienced tremendous growth, as consumers enjoy the benefits of subscription boxes, and businesses boost their revenue. 

The subscription box business model has a high conversion rate since the initial price is cheap or even free at times. There is also the predictability and guarantee of revenue; this allows businesses to plan. 

Revenue growth is yet another opportunity that this model presents businesses. That is, through upselling and cross-selling to already converted customers. 

Standard business model

Initially, only the standard business model, characterized by a one-time payment was available. One of the benefits that consumers got from this model is the absence of recurring charges. However, they could end up paying for services they do not need. The cost of servicing one-time products became overwhelming for most businesses. The standard business model creates a sense of dependence and irregularity and hard to manage billing cycles. The upside though, is that the standard business model generates instant revenue. 

Companies thriving in the subscription box industry

E-commerce has been one of the catalysts of the growth of the subscription box industry. Since 2014, when the first subscription box was made available, the industry has experienced 800% growth. Here are some of the companies that are doing great in this industry.

1. Ipsy

IPSY is a beauty based subscription Box Company, boasting over 2.5 million subscribers. Their products like Glam bags cost at least $10, containing pieces that could be worth $50. The company works with influencers to reach out to big audiences and create awareness of the different beauty brands in the market. 

The company’s success is attributed to the constant improvement of its products. For instance, they are working with reusable environmentally friendly bags, proper packaging, and other practices that make their products user-friendly. 

2. BarkBox

BarkBox is one of the best pet subscription boxes with products designed to meet all animal feed needs. The box contains about five pet products that consist of toys, grooming products, organic feeds, and snacks. The subscription box costs about $25 every month and an additional subscription fee.

The products are also customized depending on the age of your pet. New subscribers also get a $5 off benefit. 

3. GainzBox

GainzBox is among the most successful fitness subscription boxes. Their boxes cost is $32 per month and an additional $7 for shipping. The charges are discounted if you take a three-month, six-month, and an annual subscription. You get to pay $92, $180, and $348, respectively. The monthly subscription box comes with about five products, which may include healthy snacks, fitness wear, and workout items like weights. 

4. Hubble

Hubble is a health-based subscription box, that deals with eye care. The contact-lens company has about 25,000 subscribers generating a revenue of about $20 million. The company distributes contact lenses for $30 every month. This makes it one of the most affordable subscription boxes in the costly market. To make their products unique, they use modern and colorful packaging. 

They are also keen on the quality of their products and follow through FDA regulations to the core. Subscribers are also allowed to cancel or change their subscriptions depending on their visual health needs. This flexibility has made the subscription box stand out in the health industry. 

Educational resources for business owners who want to learn more about the subscription box industry

Digital technology has made it possible for businesses to venture into the subscription box industry. The four companies listed above are among companies that have been able to boost their revenue by implementing the subscription box business model. 

Benefits they enjoy include customer retention, increased conversions, predictable revenues, automation of services, and easy billing cycle management. 

There are learning resources that can give you more insights into the industry. Most of these resources are found online. They include Library of the Future, where you can learn the basics of subscription boxes. The Subscription Box Startup Guide for beginners, and to mention a few. These resources will help you learn how you can start a successful subscription business.

QuickBox is fully integrated to work with subscription box companies! We have developed a state of the art system by combining the needs that are unique to sub box fulfillment with our world-class fulfillment operations that allowed us to become one of Inc. 500’s fastest growing companies in America!

Our services include, but are not limited to:

  • Fully Managed Inventory
  • Fully Managed Delivery Based Off of Custom Timeframes
  • Customized and Perfected Presentation 
  • Competitive Pricing

If you would like to learn more about what quick box can offer you, check out today!