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.
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.