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Subscription box business

Discussion in 'Business Models, Niches, Industries' started by Pedro Henrique, Jul 6, 2017.

  1. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Hello.
    Guys, I would like to have some help here about this niche (subscription box business). I've made some search about it and I think I would make a good money where I live because there's no competition at all when it comes to subscription box.
    Although that's a good business, I don't know where to start, like build a website, how much money I need, what things to buy and the logistic...
    If there's someone that could help me, it would be very nice.
     
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  2. becks22
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    becks22 90% coffee, 10% everything else Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Welcome to the forum.

    Subscription boxes are rampant here in the US and starting a similar business in Brazil or elsewhere could be very lucrative especially if it isn't popular yet like how coffee shops are suddenly crazy popular in Asia years after the market became saturated in the US.

    I think the first thing that you need to do is to decide on a niche for your box and how you will differentiate it

    You don't need to think about the website or logistics now. It's too soon. First you need to have a product that people want, you have to solve a need and it has to make CENTS.
     
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  3. BrooklynHustle
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    BrooklynHustle Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Read these...

    THE INNER WORKINGS OF A SUBSCRIPTION BOX COMPANY. FROM A 4K SITE PURCHASE ON REDDIT TO CLOSE TO $100,000 IN REVENUE IN LESS THAN 6 MONTHS. HOW WE DID IT, AND WHAT’S NEXT! • r/Entrepreneur

    Wet Shave Club 1 Year Update: $350K in revenue and a quick look on how we plan to get to $1million annual by the end of year 2. • r/Entrepreneur


     
  4. inputchip
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    inputchip Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Here's another Reddit post by the guy who started Snack Crate. Pretty inspirational.

    I would also recommend reading The Automatic Customer by John Warrillow. It isn't specifically about subscription boxes, but more generally about the subscription service as a business model.
     
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  5. Aardvark
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    I'm currently working on something similar in the UK. I built the website myself using WordPress and have put together a prototype box that is getting good feedback. We're also 2 weeks into the Prelaunch phase and have acquired 80+ emails for people who are interested and looking to sign up when we launch.

    My advice would be focus on your need, without a need your box is useless. Set up a landing page and see if you get any interest, if you do then go for it.

    Are there absolutely no subscription boxes in your country at all? Have you carried out enough research to make sure?
     
  6. johnp
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    johnp Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Awhile back I looked into doing this with my current business but moved away from the model after doing the math. I think subscription box businesses are cool with a lot of opportunity - but also a little complicated.

    After thinking this through in great detail, I realized that the real money can be made on the backend products, which I won't even touch in this post.

    Things that you'll need to figure out:

    - Where to get materials (easy)
    - Average landed cost to someone's door. This includes cost of shipping, the box, packing supplies, etc.
    - How you will get products. Will you source them from suppliers (seems like a nightmare) or get them yourself? In my case, I was going to make all of my products - since I'm already doing that now.
    - Then the most important thing, how do you even get people to your website? So you'll need to come up with a ballpark CPA number. Example, $5.75 per signup.
    - Logistic stuff like how to handle orders, cancels etc,, but worry about that when someone cancels.

    Before even deciding whether or not I wanted to move forward, I knew that I was looking at about a 21% margin before any backend sales. I'd take that. My problem was that I wasn't too sure if there was any market demand for my idea since nobody was doing it.

    So my final piece of advice - TEST. Don't go out any buy 100 boxes. Get like 10. You'll pay more, but it's a test and it's okay to lose money upfront.

    Tests you'll want to run:

    - Do people want it?
    --- Create a simple landing page, drive some traffic and say something like "we only have 10 in stock this month. If you don't subscribe now then you'll have to wait an entire month" - see if you can even get people to pay you. I'd even do all of that before I drop a dime into any boxes or inventory. Worse comes to worse you can refund people.

    -- Test run with yourself
    --- Buy a box. You can get them at staples. Or if you want to put your logo on it then buy a box and go to a local printer. Give them some money to print on the box. Package it up, see how it looks.

    -- Test shipping
    --- Mail it to yourself first. In the last month I have lost 100's of dollars because I didn't know how to ship. Looking back, I'd def would have done more research/tested shipping my stuff before sending things to customers. I had a big learning curve in this area, but maybe I'm slow.. idk.

    Finally, for website. Easy. There is a site out there just for this business model. I forget the name of it. Just Google. It's like shopify but for subscription businesses.

    Or go join ClickFunnels. They have a built in shopping cart with stripe integration. It's enough just for early testing.

    All of your testing can be setup in under 5 days with just 2-3 hours of work per day if you don't procrastinate. That's how long it took me before I killed the idea.
     
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  7. Ryan Wolf
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    Ryan Wolf Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    I have a subscription box business.

    I don't think you understand the subscription box business... It does not matter where you live at, hence the allure for many people to start one. Don't limit yourself to just your immediate geographical area, which I don't really understand how/why you would do that anyway with a subscription box.

    DO YOUR DUE DILIGENCE! How do you know people will buy from you? How do you know people actually want this? Chances are your subscription box idea isn't unique, so find out who you're playing against. If it's something that can expire, melt, easily be damaged, etc., you need to figure out the price of the box you'll be sending it in (boxes with insulation, for example, are expensive). The list goes on and on...

    If all due diligence goes well and you're confident that you can make it work, then: (I have no affiliation with any of these sites)

    • Make a site/store on CrateJoy.com ($39/month). Their platform is so easy to use and comes with all of the payment portals already integrated. If you don't have great knowledge of coding, the payment portals can be extremely difficult to get set up properly for a subscription-like service, if you choose to make your own site.
    • Buy a few custom printed boxes (I used Packlane.com; ~$120 for 50 boxes, but they get cheaper with larger quantities)
    • Get some of whatever product(s) you're selling. I chose to only order enough for 10 boxes at first just so that I wasn't sitting on a huge inventory in case things didn't work out.
    Once you get big (100+ monthly subscribers), then you can start worrying about finding a logistics/packaging center. Until then, it's easy to take care of on your own.
     
  8. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Yeah, I also think it will be very lucrative. It's true, I need to make a search about the products I will sell, if you have any advices I would appreciate so much.
     
  9. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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  10. Tim Allen Jr.
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    Everything you said is money. Easily test by driving traffic to a landing page. Better to spend a couple of hundred bucks to test vs. having thousands of boxes.
     
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  11. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Thank you,man. Nice post.
     
  12. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Ok, I understand about focusing on the need. I really gotta pay more attention to this.
    No, there are few subscription services, but it's not a problem at least I think.
     
  13. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Thanks, man. You post help me a lot. I will study more about a landing page and how to make people access it.
     
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  14. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Thank you for your post. It helped me a lot, a advice from someone who owns a subscription box business was what I was expecting. What do you recommend to me to use as product.
     
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  15. Ryan Wolf
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    Ryan Wolf Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    You've got to decide what you want to sell.
     
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  16. BrooklynHustle
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    BrooklynHustle Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Definitely my pleasure, man. Hope it helps your implementation
     
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  17. ecommerce_lovin
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    ecommerce_lovin Bronze Contributor FASTLANE INSIDER Speedway Pass

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    Like others have said above. First, you need to find a niche. Once you do that, I will be able to advise much better advice.
     
  18. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Hello everyone, I would like to write my recent experiences about the niche I've chosen:
    I didn't build a subscription business yet at least, but I have a plan to build soon. Although I started an instagram store, selling men clothes, more especially selling T-shirt (some brazillian brands and others international brands), my business has a good public asking about the price, the brands and the forms of paying, but after 2 months I am not having the money I invested back, just the half. After all, I believe in the niche when it comes to subscription box, but I don't understand anything about programming and where to start.
     
    Last edited: Dec 1, 2017
  19. Xeon
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    Xeon Nessuna macchina per me se non una Pagani Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    The subscription box business model seems really lucrative because once you've gotten that subscriber, the profits would keep rolling in consistently monthly. Problem is with regards to the items themselves.

    With subscription boxes, I assume most people probably got some other companies to sponsor some of the products in the box? Most subscription boxes cost around ~US$19.90 range. If you factor in the cost of the items, fulfillment costs, shipping of the goods from supplier to you, misc. costs, packaging box costs,.......it seems the margins are really really low.

    But since most folks running subscription box businesses seem to be making bank, I assume they're selling based on volume (US$5 profit per box * 1000 subscribers).
     
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  20. ZeroTo100
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    ZeroTo100 Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    I launched a somewhat successful subscription box in 2013 in the nutritional supplement niche. We were one of the first in the niche and did something like 2000+ signups during our beta bag launch.

    I’m a marketing guy but learned a lot about e-commerce, order fulfillment, shipping costs, and business in general. This was my 3rd or 4th business but we shut it down for multiple reasons.

    Shipping costs - weight of our box was out of control.

    Insurance - didn’t have any and dealing with supplements was not a good idea

    Product sourcing - We built out our service as a monthly marketing campaign for the supplement market. The problem was going out and convincing these companies to provide us free product for distribution and to keep that coming. They wanted ROI and our reach wasn’t big enough. We didn’t believe in buying product although I probably would have done things differently.

    Ask me anything and I’ll be glad to help but don’t waste my time unless you plan to take some action and give it a true go.

    I’m here to PM also if you need!

    Happy New Year Guys!
     
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  21. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Humm, very interesting what you said about sponsor, I didn't think abou it.
    Yeah, if I do not discover any way to buy my products cheaper, the margins of profit would be very low. In my country it's a little expensive the boxes because that.
     
  22. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    I am worried about the shipping costs, in Brazil it's very expensive to country towns, sometimes even to big cities.
     
  23. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    In the moment, I still on retail selling through instagram and other app very known here in Brazil.