If you’ve got an entrepreneurial spirit and are looking for unique ways to start your own business, starting your own subscription box is a great option. For starters, overhead and startup costs are relatively low. Unlike other business ventures you might go on, you don’t have to invest thousands upon thousands into launching.
Even more, as a business person, you always want to go where the money is, and trends show that subscription boxes are a tough contender. By April 2017, subscription box companies had received 37 million website visits, up nearly 800% from 2014. As you can tell, these boxes are not only popular, but profitable, too. With that in mind, here are a few ways you can start your subscription box:
Think of Your Niche
Your niche is one of the most important decisions you’ll make when it comes to your subscription box services. For this reason, your niche should be something you’re passionate about. Otherwise, you could run short on motivation fairly quickly. Sometimes, it helps to focus on a specific industry before you dive into niches.
For example, let’s say you want to start a beauty subscription box. You can then hone in on niches in the beauty industry, i.e., Korean beauty, curly hair products, products geared towards athletes, etc. If you’re conflicted on what to choose, check out this list of most popular types of subscription boxes right now. While this is a solid starting point, keep in mind if you pick from the list, it should still be something you’re passionate about.
Check Out Your Competition
You should know who your competition is before you begin any business. If you want to send customers samples of perfume types, then your biggest competition would be ScentBird—and is that a brand you believe you can compete with?
There are a few simple ways to monitor your competition. First, conduct a standard Google search by looking for “subscription boxes [insert niche or industry].” Then, head over to Cratejoy and click on the appropriate industry and niche. Take a look at the results and analyze each carefully, considering their popularity, reviews, and box details.
Start a Website
Whenever you start any business, a website is necessary to help spread awareness, and to provide a platform where people can get more information about your box and purchase it. Fortunately, starting a website today is easier than ever. For example, choose a hosting plan that works for you (typically priced at just a few buckers per month) and pair it with a platform that aligns with your vision.
If you prefer an easy-to-use platform that has a low learning curve, WordPress would be a great choice. It has thousands of customizable themes that are easy to install, and plugins that help better the buying experience. You should also take a look at the websites of some popular subscription services to help give you some inspiration.
Source Your Products
If all subscription boxes paid full price for the items included in their boxes, they would never make money. This is why it’s possible to pay $30 for a monthly box that includes a few items, and end up with a total retail value of $60. Sourcing your products is the process of 1) deciding what products to include in your box and 2) reaching out to vendors to discuss potential partnerships.
It is possible to work with vendors who will offer their product to you for free, if there are benefits for them other than monetary (like increased exposure). However, free products tend to be more trial-sized, so if you want to go for a more high-end box, this might not be fore you.
Price Your Box the Right Way
Pricing is one the biggest mistakes that any business can make. Price too low, and your profit margins will suffer, and price too high and you can scare potential customers away. Try pricing your box so that it has at least a 40% margin.
Keep in mind that there are several things you need to consider when determining your price; first and foremost, the cost of the items in your box. But you’ll also need to consider the price of the actual box, packaging, shipping, fulfilment, and customer acquisition. Check out this subscription box pricing guide for more help coming up with a price that’s right.
Create a Prototype
Rather than spend a ton of money setting up your box before it’s for sale, it’s totally fine to create a prototype box. A prototype box includes a representation of the items that you’d normally include, purely for marketing and informational purposes. You can use a company like BoxUp to purchase cheap custom subscription boxes without having to pay tons of money for minimum orders (BoxUp has a minimum order quantity of just 12).