4 Reasons Why Subscription eCommerce Owners Love Life

Happy Subscription eComm Owner

Ecommerce is a wonderful thing.  You can start a business from your room, and sell products to people all around the world.  Imagine if you told you great grandfather that 50 years ago.  As I’ve mentioned previously, the route I took with my most recent eCommerce en-devour with Blind Surprise was the subscription eCommerce business model.  I knew it was hot, I knew many new businesses were popping up using this model, and I wanted to join the party.

What I’ve learned is that subscription eCommerce (subcomm for short) has amazing benefits that really make my life as a business owner so much easier.  When you’re starting your online business, think about what your goals are.  Do you want passive income, so you can make money every month while you sit back and focus on the other aspects of your business?  SubComm might be the perfect model for you.  Let me explain why.

 1. Predictable revenue

The “of-the-month” business model has been around forever. There have been wine, cigar, and coffee clubs like this for decades. The model is simple; you are billed on a recurring basis and receive your products at the same time every month. Most companies try to spend money obtaining customers, and then run campaigns to get customers back. The great thing with subscription services is that once a customer signs up, you may have a paying customer for months. It’s much easier to determine what revenue ranges will be on a month-to-month basis when you know what percent of your customer base will stay on board.

For more on this topic, read How to Forecast Sales for Your Monthly Subscription Service

2. Develop customer relationships

Business owners will always tell you that the best way to learn about your business is to talk to your customers. With subscription e-commerce, customers remain customers for months at a time. As a result, relationships are formed, and businesses have the opportunity to really get to know and understand their customer base. Determining what vendors are valued by your customers and what vendors may need to be re-evaluated is much easier when you are receiving monthly feedback on your inventory selection.

Additionally, customers are much more likely to become fans of your business if they are receiving products every single month. Think about it this way—when you go online and search for makeup and make a one-time purchase, most of the time you probably don’t even remember what website the purchase was made on. On the other hand, if you sign up for one of the many subscription boxes that sends out monthly beauty supplies, you will be excited every single month when that box arrives on your doorstep, and probably be inclined to ‘Like’ their Facebook and follow them on Twitter. You have become a fan of the name on the outside of the box, sometimes more than of the products inside the box.

3. You Can Pay Higher Amounts for Customer Acquisition

Keeping customer acquisition costs low is always a focal point for any business.  But in the subscription realm, it’s a whole different ballgame.  You’re dealing with customers that are on a recurring billing plan, so you can afford to pay higher amounts for the customer upfront.  Think about it this way – If you sign up for my subscription box and remain a customer for 6 months, I have no problem losing money on month one, because I know the profit will come.  So doing things like listing on Groupon or offering 50% off your first month doesn’t kill a subscription business at all, and is a great way to quickly acquire customers.

4. The Community is Growing

When starting up Blind Surprise, I had no idea about SEO or anything like that.  So we started out by reaching out to all the huge blogs and directories that are based around subscription boxes and got listed on them all.  Immediately we had traffic, and we still see the majority of our business come from these types of sites.  Basically, subscription boxes are really hot right now, and people are pretty obsessed with them, and have to try them all.  Makes our job so much easier, because there’s already people seeking us out!

 

So, do you want to build a business that has recurring customers every month?  Where you have people that are true brand advocates and fans?  Think about it.  If you’re interested in giving subscription eCommerce a stab, I’d love to help you.  Feel free to reach out and I will certainly provide guidance.

If you’re interested in starting a subscription based business, feel free to check out my full resource guide.

Photo courtesy of Alan N on Flickr

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