Scaling Your Subscription Box Business

The first subscription box business started back in 2004. In 2019, this business model became a 2.6 billion dollar market.

There is no doubt that the subscription business model is effective. Perhaps, it may be one of the reasons why you might think of starting this business.

Now, you will have to keep a rule in your mind if you want to grow your business. This rule is about the increase in costs as the number of subscribers and business revenue increase. Nonetheless, you can make sure that your costs increase barely while your subscribers and total revenue increase. For this purpose, you will have to scale your business.

While scaling is an effective business practice, it can be a bit tricky in the case of a subscription box business. It is because scaling this business is not all about budgeting and cutting expenses. You are going to have to think of long-term success.

In this article, we will discuss some ways to scale your subscription box business.

Revisit your business plan

A poor pricing model can turn out to be counterproductive for your subscription box business. While it sounds tempting to develop the pricing model of your subscription box business keeping in view your competitors, it can end up damaging your business.

Revisiting your pricing model is something you should do at the earliest. As your business grows, you can revisit it to adjust your prices. The essential numbers that you are going to have to keep in mind while revisiting the pricing model include the following.

Cost of Goods Sold (COGS)
Profit margins

Compelling packages

One of the reasons your customers will want to choose your subscription box service is the design of your packaging. It is because customers are always attracted to a good surprise. They want to work a bit with the packaging before having the main items in their hands.

The first thing that you have to pay attention to is the outer packaging design. A packaging design that develops an emotionally charged moment can instill brand loyalty in your customer. Make sure to work on logos, fonts, colors, and design patterns intelligently to make your package more attractive.

The next step is to use custom packaging supplies to make the inside of the package equally attractive. This practice is also known for improving the unboxing experience.

Subscription box fulfillment

If you want to grow your business of subscription boxes, you may want to consider subscription box fulfillment.

While you may think of controlling your costs, subscription box fulfillment can come with an essential expense. However, you need to keep in mind that subscription box business growth might mean the packing task becoming an uphill challenge. That’s where it may become necessary to outsource your fulfillment, which undoubtedly increases costs, but also helps run your business quite smoothly.

Get to know your customers

While customer acquisition can cost your business quite significantly, it is something you are going to have to do anyway. The best way to keep these costs down is to find your customers in the right places. In other words, you will need to research a bit to know who your customers are.

For instance, a report by Forbes suggests that average customers of subscription boxes are the following people.

College-educated people
More female than male
People with an annual household income of $100,000+
People who do not have much free time
People who have children aging between 3 and 5

While your target audience may not include these people, you still want to keep these characteristics in mind while formulating your marketing strategy.