How to Start a Shopify Subscription Box Business
What if you could keep your customers coming back every month and reliably predict how much they’d spend over the long run? Throw in the ability to upsell with ease and low start-up costs and you’ve got yourself a winning recipe for business.
This is the Shopify subscription box business and it’s been a key part of a $5 billion industry that sells everything from coffee to sex toys on a recurring basis. Subscription boxes are, quite simply, the perfect business model.
- What Is A Subscription Business
- Examples of Successful Subscription Box Businesses
- Pros and Cons of Subscription Box Businesses
- Shopify Subscription Box: FAQ
- Best Shopify Subscription Box Apps
- How To Start A Subscription Box with Shopify
- How to Grow your Shopify Subscription Business
I. What is a subscription box business?
A Shopify subscription box business is when you offer a product or service that will be delivered on a recurring basis. The customer can subscribe to reliably receive the product, every month perhaps, and they will usually save money for doing so.
The two kings of the subscription box business model are beauty and consumables. Naturally, these things run out over a predictable timeline, so they’re easy targets for recurring subscriptions.
Some examples of popular subscription box products include:
- Protein powder
- Baby supplies
- Pet food
- Organic food
The list goes on, but beauty and consumables have shown to be the heavy-hitters, while books, plants, and other collectibles also make effective choices.
II. Examples of successful subscription box businesses
The best way to get your head around Subscription box businesses is to look at some successful stores that use the business model. I’ll introduce three Shopify stores from different industries to show how they effectively employ the model - do have a look at their websites to see them in action.
1) Bulletproof - The State of High Performance
Bulletproof sells supplements and health products. The company encourages customers to build their own subscription box through the ReCharge Subscription Box app on Shopify.
Customers can save money by subscribing to a product and choosing how often they receive it. They save 10% by shopping this way.
Bulletproof’s model is centered around the checkout page, where customers have the option to buy one product or activate the subscribe and save method. This is essentially an upsell and the business itself isn’t modeled solely around subscription boxes - you can still easily buy one product without subscribing.
Bulletproof has effectively integrated the subscription box model into their existing store design to drive up order volume.
- Increases order volume by integrating subscription boxes into their store
- Easy to use for customer and merchant
- Customers save 10% when shopping
- Isn’t forced on you
- Seamlessly fitted into website design and aesthetic
- Can’t predict revenue
- Customers could save 10% then not continue the subscription
2) Tiege Hanley - Uncomplicated Skincare for Men
Tiege Hanley has a powerful business strategy that combines the YouTube prowess of its founder Aaron Marino (AlphaM) with a simple Shopify subscription box model. The result is an annual turnover above $9 million and a steadily rising subscriber base.
The secret to this success, other than a 6-million-strong YouTube channel that promotes the hell out of the company, is its limited range of products. Tiege Hanley only has six products, meaning it’s very easy to build a subscription box package.
They offer a starter subscription which you can then add to later with easy upsell dynamics. They also give you points when you spend, and on your birthday, which you can then use to get discounts.
The site puts a lot of emphasis on educating men about skincare, which ultimately leads them closer to buying their products. They know men aren’t as clued up about skincare as women are and they use this lack of knowledge to make their store into an educational resource to help men look good. It’s very effective.
- Phenomenal use of influencer marketing
- 100% subscription box business model
- Can predict revenue over the long run
- Easy to upsell new products
- Great use of educational resources to secure customer loyalty
- Easy system to use
- Reward points for customers - including on their birthday
- May lose customers who don’t want to commit to a subscription box
3) Verve Coffee Roasters - Fresh Coffee Roasted Daily
Verve Coffee Roasters brings fresh Colombian coffee to your door on a recurring basis so you can clean the fog out of your head every morning without any mishaps. Their business model is a mix of a standard eCommerce store with the subscription box business model built-in.
What Verve really gets right is the sign-up process. The customer is taken on a seamless journey with beautiful illustrations all the way to the checkout. At the end of the process, they’re reminded that they can change or cancel their subscription at any time.
The subscription process comes in five stages:
First, you select your coffee.
Next, you choose whether you want whole bean or ground.
You choose how much you want - heavy coffee drinkers can rejoice in the kilo option.
Then you choose how often you want it shipped to you.
Finally, you review your order and are reminded that you can cancel or change your subscription at any time.
Verve Coffee Roasters makes a fun and visually stimulating order process that draws customers further into the sales funnel. Their consistent use of illustrations is a perfect example of why it’s worth investing in the design of your store to increase conversions.
- Simple and fun subscription process
- Easy system to use
- Effective integrates the subscription box model into their eCommerce store
- Great use of illustrations
- Reminds customers they can cancel - this reduces commitment doubts
- Free shipping included with subscription
- The mixed subscription/standard store model means they can’t predict revenue
- Customers don’t save money by subscribing
III. Pros and cons of subscription box businesses
Shopify subscription box businesses are a great model to follow if you play your cards right. They can give you a reliable recurring revenue which allows you to make future predictions more comfortably than a regular store would.
Still, there are downsides to running a Shopify subscription box business, especially if you’re selling products that aren’t consumable or collectible. You must consider the pros and cons of this business model and whether the type of products you sell are appropriate for it.
01. Pros of a subscription box business
Established stores that sell consumables or collectibles can make a lot of money by building a subscription box business. The benefits are many, including:
- Easy customer retention, especially if you have a fixed contract
- Easy to predict future revenue which makes decision making easier
- Great for cash flow - especially if the customer pays up-front for a discount
- Less money needs to be spent on retaining customers - means more left for acquisition
- Shipping is easy and consistent
- Can predict stock which means less waste
02. Cons of a subscription box business
While it might sound like a great idea to follow this business model, there are some negatives to bear in mind before committing yourself.
- Must introduce new products regularly to keep customers interested in the box
- Higher acquisition costs to convince people to commit to a subscription
- Can’t predict churn rate if customers can cancel at any time
- Could be particularly hard-hit by random events like COVID, where subscriptions are usually the first costs people cut to save money
If you’re selling a subscription box with something like skincare or baby supplies, then you can likely rely on repeat customers, but other products, like food, may be more difficult to keep a stable revenue stream with.
IV. Shopify subscription box: FAQ
You no doubt have some questions about setting up a subscription box business on Shopify. I’m going to answer some of the most common questions now.
Q) Can Shopify do subscriptions?
Yes. You can build in a subscription box model to your Shopify store by using one of the many Shopify subscription box apps. I’ll introduce the best apps to use in Part IV.
Q) Can you do recurring payments on Shopify?
Yes. This is a feature that can be activated through a subscription box app. You cannot activate recurring payments through Shopify alone.
Q) How much money do I need to start a subscription box business?
Realistically, you’ll need enough to set up your store, hold some inventory, and account for shipping and marketing. While customer retention costs are low for subscription box businesses, customer acquisition costs are usually high. This means that getting the business up and going will take a fair investment.
Q) Are subscription box businesses profitable?
If you can get the business up and running then it will be very profitable. The start-up costs are high, though. You’ll need enough to acquire customers and you’ll need to offer fast shipping, valuable products, and have stellar marketing.
Q) What are the best products to sell in subscription boxes?
Consumables and collectibles. Things that people will use in a month or things that they want to collect over a period of time. Don’t sell things that people only want to buy a few times. Beauty and cosmetics, organic food, baby supplies, and other things that people need and use each month are ideal.
V. Best Shopify subscription box apps
A builder is only as good as his tools - and your Shopify subscription box business will only be as good as the app you use to get it up and running. Fortunately, there are some excellent ones to choose from, including apps that are officially partnered with the Shopify Plus program. In short, this isn’t amateur hour, you’ll be leaving your subscription box business in very good hands.
Trial: 60-day free trial
Cost: From $60 per month
ReCharge is the first choice of more than 10,000 merchants for their Shopify subscription box business. The app integrates seamlessly with more than 20 other top Shopify apps and offers a 60-day free trial so you can see for yourself how it scales your business.
1.1. Stand-out features
ReCharge allows you to take control of the customer journey and offer a subscription box feature with custom themes to reflect your brand’s aesthetic.
Valuable subscription options
- Recurring products: You can easily offer customers a recurring shipping option with set intervals.
- Subscribe & Save: Put a Subscribe & Save button on your product pages to draw more customers in with discounts.
- Subscription boxes: Customers can quickly build their box from your products and you can manage the finer details with ease.
Connect your business with more integrations than any other subscription box app. With more than 20 integrations, you’ll have real power at your fingertips.
Choose a subscription setup that works for you. You can pick from a range of themes to match your setup with your store’s look and feel.
Customers can easily manage their subscription boxes from their end. Give the power back to the consumer and watch your business grow.
Everything from sign-up to check out is optimized for mobile. You’ll never have to worry about customers experiencing a bad UI.
1.2. ReCharge pricing plans
ReCharge offers a 60-day free trial with only one plan - $60/month.
With the recent release of Shopify Subscription API, a new pricing plan is expected to be rolled out soon with the new integration between ReCharge and Shopify Checkout.
2) Bold Subscriptions
Trial: 60-day free trial
Cost: From $39 per month
Bold Subscriptions are trusted by more merchants than any other subscription box app on Shopify. They have more than 14,000 stores using them. It’s a simple and affordable solution to manage recurring subscriptions.
2.1. Stand-out features
Bold Subscriptions allows you to take recurring payments on a multitude of platforms so customers can buy subscription boxes, memberships, collectibles, and Subscribe & Save plans. They offer immense value and fantastic customer retention tools.
Sell anything recurring
From subscription boxes to monthly memberships and everything in-between, you can sell anything with Bold Subscriptions.
Integrates with tons of payment platforms
From PayPal to Mastercard, your customers can meet their recurring payments on a platform they’re already using.
Custom retention tools
Keep your customers from canceling their subscription with options to pause, skip, or stay a member with discount offers. There are plenty of ways to keep customers from running away.
Build your subscription interface in a way that reflects your store. There are plenty of themes to choose from to make something that truly represents your brand.
Keep customers happy by offering dynamic discounts like 20% off their third order. Watch your customers stay for the long haul with rewards and discounts that build loyalty.
2.2. Bold Subscriptions pricing
Bold Subscriptions offers a 60-day free trial so you can see how their service can benefit your store. After that, they have the Essentials Plan at $39.99 per month and the Advanced Plan for $199 per month. There are also small processing fees for every transaction.
3) Recurring Payments & Orders
Trial: 14-day free trial
Cost: Free plan available, then from $49 per month
PayWhirl Recurring Payments is a newer app that allows you to manage everything from memberships and donations to subscription boxes and Subscribe & Save plans. The app also includes email notifications, promo codes, custom box build features, and more.
The free plan makes this app a very attractive option for businesses that are just starting out.
3.1. Stand-out features
Recurring Payments & Orders is an interesting option thanks mainly to its email and chat support features, but also for a range of other stand out features.
Import 3rd-party subscribers
You can bring in subscribers from spreadsheets, gateways, and more to easily manage your subscriber list.
‘Build a box’ feature
Allow customers to custom build their own subscription boxes from your product catalog, or design set packages for them to choose from.
Email and chat support
Solve customers’ problems and keep them interested with chat and email integration.
The app integrates with Shopify themes, apps, and doesn’t redirect for checkout.
Saves payment details
The app saves customer payment details over a wide variety of platforms to save time. You can also offer up new payment options easily.
Offer promo codes
You can offer promo codes on subscriptions or bonus discounts to subscribers over the long run.
3.2. Recurring Payments & Orders pricing
The Recurring Payments & Orders app offers a free plan that integrates with Stripe and offers email and chat support. They also offer Pro, Plus, and Ultimate plans with increasingly more advanced features and progressively lower transaction fees.
VI. How To Start A Subscription Box with Shopify
Step 01: Install a Subscription Box App
In the above section, we've got into details of the top 03 Subscription box apps - it's up to you which one you should try out first. For this tutorial, we'll go with ReCharge Subscription App.
Install ReCharge Subscription From Shopify App Store
Step 02: Set Up Your Subscription Box
Once installed, you need to go over the basic settings of your Subscription box app. This is where you decide:
01. How Do You Want To Offer Subscription: You can choose either One-time and Subscription, or Subscription only.
- One-time Subscription: Your product will have the option of being purchased as one-time item or as a recurring items)
- Subscription only: Your product will only be offered as recurring subscription item.
02. Offer discount to subscribers
03. Frequency Options: Use + Add a frequency to add additional choices. Setting multiple subscription frequency options gives your customers a unique subscription that fits their needs. You can set a frequency in days, weeks, or months.
04. Choose Products for Your Subscription box.
Step 03: Connect Your Subscription Box To A Payment Processor
All subscription payments are handled by third-party payment processors through the ReCharge checkout. You can choose to get connected to either:
Step 04: Set Up your Subscription Rulesets
Subscription rules control everything about how a subscription functions, such as:
- The products you want to offer for subscription.
- How often the customer will be charged.
- How often the product will be shipped.
- Discounts for subscribing.
- Specific days for charges.
- Cut-off windows when subscribing.
- Automatic expiration after a set amount of time.
Check out how you can set up Subscription rules in this tutorial:
Step 05: Brush Up Your Subscription Page
Signing up for a subscription is not a quick buying decision - your prospective buyers will be bound to do research, look around, check out other alternatives, examine your products in comparison with those of others. So it's a good idea to make your product page as comprehensive, as detailed and as persuading as possible.
Start with the basics:
- Have a clear Call To Action
- Prepare mesmerizing product images
- Make use of compelling product videos - show how it really looks in real life
- Create urgency and FOMO with Countdown timer, Discount etc
- Have Upsell and Cross-sell section placed strategically
- Have Social Proof and Trust Badges to boost credibility
- Design Mobile-first
To build your custom product page that can convert, you will need to tweak your codes a bit - following this tutorial.
However, if you are not comfortable with development works and coding is not your friend, you can simply drag and drop everything you need to build your custom product page.
Build Your Custom Subscription Store
Fully Customizable. Free Plan Available/No Expiration.
60+ Templates & Elements. Trusted By 60.000+ Shopify Merchants
VII. How to grow your Shopify subscription business
Setting up a Shopify subscription box business on Shopify is easy, but growing it can be challenging, especially given the costs of customer acquisition with this business model. Fortunately, there are some simple tips to follow to ensure you’re getting the most out of your business.
01. Offer real value
It’s essential to offer real value in your subscription boxes. People aren’t going to buy things that they don’t either need or want to collect. A great example is Gentleman's Box, which offers men’s fashion accessories that you probably wouldn’t take the time to buy otherwise.
The Gentleman's Box offers premium lifestyle products every quarter for $100.
02. Make it a fun experience
Everyone loves unboxing, so why not make your subscription package a fun experience? Throw in the element of surprise or give out the occasional unexpected bonus product as a gift. Even little things can make the experience more worthwhile.
03. Get communication right
Customers want to know that they can talk to you quickly if they’re going to give you money every month. A timely response on a chat support function goes a long way to showing your brand’s reliability.
Don’t limit your communication to customer support, you should also have an active blog with valuable content to make your brand more trustworthy.
04. Let them customize the box
The customer should be able to choose what goes into their box. Sure, it’s great to offer packages that you think will be valuable to them, but at the end of the day, they also want the option to make it their own. After all, it’s their money on the table, not yours.
05. Offer multiple payment methods
You need to make sure the checkout process is seamless. This is true of any business, but especially for subscription box businesses where there are much bigger hurdles in front of first-time customers.
06. Consider what’s right for your business
If you’re selling clothes, then you might want to offer a subscription box as a side feature on your store. If you’re selling skincare, then you may wish to focus most of your efforts on subscription and only a little on one-time product sales.
The method you choose depends on the products you’re selling. Make sure you do your research to see how effective subscription boxes are in your niche.
A subscription box business is an extremely effective model if done right. The benefits you gain from a reliable revenue stream are massive, but you have to balance this against the increased cost of customer acquisition and the vulnerability of the business model in times of financial crisis. People are quick to drop subscriptions when their bank balance takes a hit.