E-commerce subscription services are mutually beneficial in many ways for both subscribers and businesses. The customer benefits from periodic shipments and/or curated collections, while the business benefits from the certainty of assured, recurrent payments.

Subscription services took the e-commerce world by surprise in 2020. With consumer’s need to stay home safe amidst COVID-19 came the birth of several subscription businesses across various industries:

• Birchbox delivers beauty products, perfumes, and various other cosmetics to consumers on a monthly basis.
• Dollar Shave Club sends consumers affordable, high-quality personal grooming supplies for less than they sell them at the drug store.
• HelloFresh sends pre-portioned ingredients to the doorstep of consumers to make homemade meals.
• BarkBox sends a collection of dog toys and treats to pet owners on a monthly basis.

Amazon also got on the subscription train by allowing customers to “subscribe” to certain recurring purchases such as dog food, laundry detergent, and paper towels.

The key to running a successful subscription service isn't many. You need to find the right price to entice customers to subscribe in a way that still offers you an attractive profit margin. And most importantly, you need to offer your customers convenience and valuable service to encourage them to keep their subscriptions active.

Let us start by discussing subscription box business ideas and successful examples in each niche that you can use as a model to build your own subscription box

1. Shaving Subscription Box

About 94 million males in the United States, aged 15 and up, shave every day, and about 75% of men shave every day. Although personal grooming tastes differ, approximately 1.3 billion men use a razor to shave. Subscription shaving boxes such as Harry's delivers personal grooming kits such as razors, shaving cream, moisturizers, shampoo, and more on a monthly basis.

Case Study: Harry’s

Harry's is an American company that manufactures and sells shaving equipment and men's care products via online and retail channels. The company is known for its subscription service where customers receive new razor blades, shaving cream, and other grooming products by mail. 

2. Meal Kit Subscription Box

According to the survey, approximately 20% of US adults have tried a home delivery meal kit service, with roughly 4 out of 10 being current users. Furthermore, the market for meal kit delivery services is presently worth more than $5 billion. HelloFresh for instance receives millions of monthly visitors.

Case study: HelloFresh

HelloFresh is a German publicly traded meal-kit company based in Berlin, Germany. It is the largest meal-kit provider in the United States, and also has operations in Australia, Canada, Denmark, New Zealand, Sweden, and Western Europe (including the UK, Luxembourg, Germany, Belgium, France, the Netherlands).

3. Pet Supply Subscription Box

More than 85 million homes own a pet, according to the American Pet Products Association, and pet ownership has climbed to 68% in recent decades. Americans not only own more pets than ever before, but they also spoil them. The pet market in the United States is worth more than $72 billion dollars, according to estimates. RescueBox is a monthly pet supply box that caters to pet owners who enjoy spoiling their pets with new toys and treats on a regular basis.

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Case study: RescueBox

RescueBox is a monthly subscription box for pets, sometimes a cat box, and 3 different size dog boxes to choose from. Not only will your pet enjoy their box of goodies, with each box you buy RescueBox will donate food to shelter pets in need throughout the USA!

4. Book Subscription Box

According to a 2017 survey by the Bureau of Labor Statistics, Americans aged 15 and up spend about 17 minutes per day reading, not considering time spent at work or school, on average. Even though audiobooks are the fastest-growing medium in terms of sales in the United States, many individuals still prefer the feel of a physical book in their hands. Subscription services for book boxes, such as Book of the Month, OwlCrate, and The Bookish Box, cater to readers who want to keep up with the latest releases.

Case Study: The Bookish Box

The Bookish Box is a monthly literary subscription box that delivers newly released books and themed items to subscribers monthly.

They offer both young adult & adult book options, so you're able to select the kind of book you love. The goodies are items inspired by their monthly theme and are created by their company or by incredible small shops.

5. Coffee Subscription Box

Data reveals that more than half of all Americans over the age of 18 drink coffee every day, and the average American consumes roughly three cups each day. Sales of specialty coffee are growing at a pace of about 20% per year, with the U.S. coffee market alone valued at over $18 billion. Coffee subscription box, Counter Culture allows customers to taste coffees from around the world for a monthly charge.

Case Study: Counter Culture

Counter Culture Coffee is a specialty subscription coffee roaster sourcing exceptional single-origin and specialty coffee, fresh-roasted, and delivers to your doorstep monthly.

6. Healthy Snack Subscription Box

Even though the average American consumes more sodium, saturated fats, and processed sugar than the recommended daily intake, the healthy food sector remains profitable. Although approximately 36% of adults in the United States are obese, about 75% of Americans claim they attempt to eat well. Healthy snack subscription box Snack Crate provides healthy snack options that go beyond the typical options of fresh fruit and vegetables, which many people find uninteresting.

Case Study: SnackCrate

SnackCrate is a snack subscription box designed to transport you and your taste buds around the world on a monthly basis. The company imports snacks you wouldn’t find at your local store, including unusual region-specific flavors from well-known brands.

Some of SnackCrate‘s most popular boxes are filled with treats from places like Japan, Hawaii, England, and Canada. These hand-picked, hand-packed boxes are artfully curated to bring an array of interesting items shipped directly from their source countries.

7. Beauty Subscription Box

According to Forbes, the beauty industry is valued at more than $445 billion. Since the early twentieth century, a small number of multinational businesses such as L'Oreal, Estee Lauder, and Procter & Gamble have controlled the market. With beauty subscriptions such as BirchBox, customers can now get sample-sized products for a low monthly fee.

Case Study: BirchBox

Birchbox is a monthly subscription service that sends its subscribers a box of four to five selected samples of makeup, or other beauty products. The products include skincare items, perfumes, organic products, and various other cosmetics. 

8. Personal Style Subscription Box

The global apparel market was worth $1.46 trillion in 2020, and it's anticipated to increase to roughly $2.25 trillion by 2025. Ecommerce sales are at an all-time high, even as brick-and-mortar retail establishments close across the country. Customers can now get a personalized collection of apparel, shoes, and accessories through personal style box subscriptions like Stitch Fix for a monthly charge.

Case Study: Stitch Fix

Stitch Fix is an excellent example of the kind of direct-to-consumer e-commerce company helping women and men dress sharp in the digital age.

Stitch Fix sends subscribers a selection of clothing items when they request a “fix.” They will pay a $20 styling fee for each order that covers their stylist's expertise and time. If they buy anything from the shipment, Stitch Fix will credit that $20 toward their purchase. 

The mission of Stitch Fix is “to change the way people find clothes they love by combining technology with the personal touch of seasoned style experts.”

They promise that the experience “is not merely curated—it’s truly personalized to you.”

That personalization relies fundamentally on gathering a lot of data together combined with human judgment.

Conclusion

Whereas in a traditional e-commerce business, you would increase your margins dramatically to make a profit on each sale, you would keep your margins much lower in a subscription-based e-commerce model. This is because this low price is the hook that draws customers in and keeps them coming back month after month. After a consumer has used the service for a while, true earnings are realized. The most dangerous aspect of having a subscription-based service is this: if a consumer churns or cancels their subscription after one or two orders, you may be left with little or no profit.

This is why I always recommend that those considering subscription products or services should adopt a comprehensive and vertically integrated subscription app with an in-built churn bursting algorithm; the likes of Chargezen.

If you’re able to get customers to stay with your subscription service for the long haul using Chargezen, those profits start to add up.

If you’re an e-commerce business looking to scale or you’re looking to start your e-commerce journey and you're considering the benefits of a subscription-based service, reach out to the Chargezen support team or simply write me at success@trychargezen.com.