10 Steps To Starting An Ecommerce Subscription Business - Sellbrite

10 Steps To Starting An Ecommerce Subscription Business

Starting an ecommerce subscription business
Photo credit to Flickr user vecdeal

In my last post I talked about the increasingly popular ecommerce subscription business model.

I mentioned that I’m in the process of helping myself to a slice of the subscription business pie – and I’ll discuss exactly what I’m working on in a later post.

Today, however, I want to talk about the process I’ve followed to launch my idea – I’m going to lay out 10 steps to starting an ecommerce subscription business, so that you too can take a bite of the cherry when you’ve found the perfect niche!

1) Find an idea

One initial problem with starting an ecommerce subscription business is that it seems like everything has already been done.

To be clear, this is far from the truth. There are TONS of ideas out there for clever subscription businesses, so don’t let yourself get stuck feeling like this or you’ll never realize your own potential.

Now, unless I think I can seriously improve what an existing company is doing, I’ll rarely take a dive into a crowded niche – especially when it comes to subscriptions, where customers tend to be loyal to one particular brand or vendor.

It took me quite a while to come up with a subscription business idea that I can execute, while at the same time facing little competition initially. Another problem with the subscription box idea is that once your idea is validated and proven successful, the world and his dog will jump on the bandwagon – so you’ll have to weather the storm of copycat competitors trying to outdo you with your own idea!

2) Get feedback

I had a fair few subscription ideas that seemed great, in my head. I then bounced the ideas off a few other people and they told me they were rubbish, and they explained why they were rubbish. Sometimes the only way to get a different, more objective perspective on something is to share your idea with someone else – a friend, family member – someone you can trust.

I’m a fairly impulsive person, so without sounding those ideas off against other people I would probably have gone through with one or two, and lost a lot of money in the process.

Of course just because someone says that an idea will or won’t work doesn’t necessarily mean they’re right. Look at any truly disruptive entrepreneur in history, lots of people told them they were crazy.

But in my opinion, the more people you ask, and the more feedback you get on an idea before rolling with it, the more successful it’s likely to be.

3) Create a brand identity

You might not be developing and launching your own products, but your company and service is a product. It’s up to you to build a brand around your subscription business. It’s important to build a brand identity that resonates with your customers, and potential customers.

The first part of any brand identity I work on is usually a logo: I’ll head over to 99designs.com and have some of the finest designers I’ve encountered put together some awesome logos for me. I then choose the winner, and the rest of the project’s branding will stem from that. It’s important to keep branding consistent across the board – the same colors, the same look and feel. Branding will be visible on your website, in your box (and maybe on your box), in your emails, and more.

4) Build a website

An ecommerce subscription business isn’t much without a website – so it’s important to invest a sensible sum of money in a nice-looking website that’s going to appeal to your subscribers.

The great news is that you don’t need to code a site from scratch – and you don’t need to hack up traditional ecommerce content management systems with endless plugins to enable subscription sales.

CratejoyCratejoy is a purpose-built subscription platform. There are lots of advantages to using Cratejoy, including the fact the monthly subscription fee is super affordable, and various layout templates are included – you could in theory just cut one of those up and save a fortune on a unique site design.

At the end of the day, your website is your shop front. So while it’s good to do things on a budget and save money wherever possible, you must remember your website is the platform on which customers will signup to your service so it must look professional and appealing.

5) Procure products

A subscription box is nothing without the products inside of it. While I’ve put product procurement as step five in this list, you should be thinking about products way ahead of time. There are lots of great subscription box ideas that I came up with on my journey – but many of them were not viable because I would have had difficulty sourcing the products required (especially on an on-going basis).

Look beyond your first subscription box, too. Can suppliers meet your orders on a sustainable basis?

What if your box takes off and you get 10,000 subscribers in the first month? Can suppliers meet that kind of demand for month two, three and so on?

What if your box flops for the first few months and orders remain small – will suppliers still agree to supply you?

Some of the hardest suppliers to deal with are the small artisan makers of products, they might find it hard to keep up with your huge demand when they’re used to making a handful of products per day. Product procurement can cause a huge headache if you don’t tackle it and take it seriously right from day one.

6) Design and produce “The Box”

Many subscription box companies take great pride in the actual box they send out to customers. Glossybox, for example, have a nice glossy box that’s adorned with their logo, in the season’s “on trend” colors.

I’ve decided to go with a fairly unremarkable box for the first few shipments of my subscription business. If the business idea is validated and shows signs of future success, we’ll spend a little more on boxes after the third month.

At some point I’d like to incorporate our social media logos onto boxes, along with our telephone number and customer support email address. At the moment, however, I’ve kept it simple – only our logo is printed on the box to keep costs down and production time to a minimum.

While box design is important, it’s also crucial that you don’t deplete your budget by spending a fortune on amazing boxes when there really is no need. Some subscription boxes cater for the higher end of the market, so it stands to reason their boxes need to look great. Other subscription companies cater for other segments of the market, and an “all-singing, all-dancing” box may not always be needed.

Focus first on cost and practicality when designing boxes for your ecommerce subscription business.

7) Prepare for launch

The launch of your product can be seriously nerve-wracking.

I know people that have put off the launch of their product for silly little reasons – and in the end they’ve never gotten around to launching their business or idea at all. Don’t be that person.

It hurts to be a perfectionist and for your product to be still imperfect, but at some stage you just have to hit the button – you have to kick the breaks away from your company’s wheels, and watch it start to slowly build momentum.

As long as you’ve tied everything together and you have a nice website, a solid box, and some great products, what’s the worst that could happen? There will be things improve for sure – but every business evolves. Don’t wander around in a daze, just launch!

8) PR frenzy!

There are many ways to market a new business, but I’m a big fan of PR. You’ll hear lots of people talking about search engine traffic, or social media traffic, or print advertising – but the fact is, if no one actually knows your subscription business exists, they will not search for it.

For example, before the Dollar Shave Club burst onto the scene – how many people honestly sat down and searched Google for “monthly subscription shaving box”. The answer is: not many.

Sometimes people need to see a bit of press coverage about a product before realizing it exists, and realizing how it can be of benefit to them.

Where possible, drumming up a bit of PR for your subscription business launch is the best bet in terms of advertising. If you have tens of thousands of dollars to spend hiring a city PR firm on a retainer than that’s great. If you don’t, why not send out 10 or 20 sample boxes to some bloggers in that specific niche?

Alternatively, why not drop some sample boxes into journalists at your local newspaper – or send them to journalists on national titles? Of course there’s no guarantee your subscription box will garner any coverage – but if you don’t send a sample, you’ll never know what the outcome could be!

9) Ship everything

Once all of your subscriptions are done for the month, it’s time to ship everything. This can be as hard or as easy as you make it – the old saying “fail to prepare, prepare to fail” comes to mind.

For my subscription box, I’ve already lined up a courier to carry our items. They know exactly what date to expect our first batch, and we’ve agreed on pricing. Because I’ve dealt with couriers in the past I know how hard it can be to make such arrangements, so I did it well ahead of time.

The great thing about Cratejoy is that it integrates with ShipStation, which can help to speed up the dispatch process greatly. If you choose to use a CMS like Shopify, then you can also integrate directly with couriers like UPS.

Don’t overlook the dispatching aspect of your subscription business. You do not want to be that guy stood in line in the post office with 379 subscription boxes to send, one by one, by tracked delivery.

Plan ahead to ensure that shipping goes smoothly. It often works out cheaper to pay for shipping online, as opposed to at your local post office or courier’s depot. We’ve refined the process of printing hundreds of labels to the click of just a few buttons, thanks to a nifty label printer and some custom software. Dispatching hundreds of items doesn’t have to be a chore.

10) Rinse and repeat

By far the most difficult task associated with running a subscription business is to rinse and repeat every month – finding new products to put in your box can be very, very challenging.

Take my advice and try to work at least a couple of months in advance. So if a supplier does let you down or you do have trouble finding items to go in your box, you’ve got plenty of time to rectify those problems before customers start expecting their boxes to arrive on their doorstep.

You may also want to build “fall back” products into your schedule, so if a supplier does let you down at short notice, you’ve got a product you can substitute without breaking a sweat.

Starting an ecommerce subscription business is a challenge, and the initial steps can be hard to negotiate and manage. However, there is a huge opportunity to build up recurring revenues that allow you to plan months and years ahead. Follow these steps, be thorough and deliberate, and find your way to success. It’s right there waiting for you to grab.

Got any other thoughts on starting an ecommerce subscription business? Share them with us in the comments!