There’s nothing like opening a box of goodies delivered to your door, especially if what you find inside is a fun surprise. The subscription box phenomenon has grown from a novel concept over a decade ago to a standard practice for many e-commerce businesses today—to the tune of a $26 billion global subscription box industry in 2022 alone.
Starting a subscription box offering can provide a number of valuable benefits to your business, so it makes sense to consider this venture if you haven’t already. Subscription boxes allow you to kit products together, especially those that could become dead stock in your inventory. The recurring nature of subscription boxes paves the way for your business to have a steady, predictable income stream. Plus, subscription boxes can work for any industry, from frozen foods and toys to beauty products and high-end apparel. The opportunities to grow your business are endless!
If you’re ready to understand how to start a subscription box with confidence, follow this process below and you’ll be on your way to success.
How to Start a Subscription Box in 5 Key Steps
Develop Your Subscription Box Idea
As you begin exploring how to start a subscription box offering, you need to develop an idea that sells. To get there, start by thinking about a niche you want to target, as specialized boxes can help you identify and acquire the best products to include inside.
Once you identify your specific niche, consider the target customers you’re trying to reach and cater your subscription box to their preferences. You can even analyze competing subscription box companies to look for ways to make yours rise above the rest.
Establish Your Subscription Box Pricing
Though you now have an idea, you need to ensure that your subscription box will be profitable. This means you need to establish pricing that will generate positive margins, remain competitive for your target customers, and provide scalability as your business grows. How can you achieve this? Factor in the following costs to determine your price:
- Product
- Marketing and customer acquisition
- Box and packing materials
- Warehousing and fulfillment
- Transaction fees
The pricing you choose will also depend on the type of subscription box you’re starting. Access-based subscription boxes—especially those featuring limited-edition items or “drop”-style merchandise positioned on exclusivity—may command a higher price than replenishment boxes of non-discretionary items like coffee, food, or cleaning products.
Build Your Prototype Box and Your Digital Storefront
You’re getting closer to starting your subscription box service, so you need to create a prototype box. Used for marketing, your prototype box introduces the kinds of products potential customers can expect. To create this box, you’ll need to identify the products to feature, choose the box size and design, and then create your branded packing materials.
At the same time, you need to build your digital storefront to sell the subscription box. This requires a professional e-commerce website to market your offerings and enable customers to purchase your box with ease—as well as the platform integration capabilities to help you manage your orders.
Set up Your Logistics
When considering how to start a subscription box, logistics is one of the key components you need to get right. After all, a big part of the subscription box experience is a reliable delivery. To achieve this, you’ll need strong fulfillment capabilities, including order fulfillment, inventory management, replenishment, and returns processing. While some companies will keep this in-house, many outsource these services to a third-party logistics provider (3PL) to streamline their operations and experience other valuable benefits.
Market and Launch
In your quest to start a subscription box offering, you’ve reached the point where your planning becomes a reality. It’s time to market your box and take orders! Using the prototype box you created earlier, take several photos and feature them prominently on your website, social media, and email campaigns. Marketing aggressively and strategically will put your box in front of the right people.
As orders start coming in, communicate shipment dates to your new customers while monitoring your fulfillment and shipping process to look for areas to improve. Partnering with a 3PL can give you a true competitive advantage and keep your customers happy.
Ready to Start Your Subscription Box? Smart Warehousing Can Help
At Smart Warehousing, we have the expertise and capabilities to make starting a subscription box offering easy and successful. Our custom packaging expertise can help you create beautifully branded packing materials and a fantastic unboxing experience for your customers, and our unmatched warehousing and fulfillment capabilities can ensure you exceed your customers’ expectations each month. If you’re ready to achieve subscription box peace of mind, contact us today to get started.