Subscription Boxes – Is the Ecommerce Phenomenon Right for Your Business?

June 22, 2017 Off By Hoofer
If you run an ecommerce business using a cloud based platform, then looking for new ways to generate revenue is an important part of keeping your competitive edge. One interesting way businesses both big and small in ecommerce have been creating new revenue streams is with subscription services and products.

What kinds of Subscription Services Do Ecommerce Sites Offer?

A good example of a subscription service is Amazon Prime, which allows people to, for a fixed monthly fee, receive access to next day delivery at no charge as well as a lot of online media. This is a way Amazon can add value to customers for a small monthly fee, bringing in its own revenue, which has the second benefit to the brand of making people want to shop with them more frequently to get the most out of it.

Subscription boxes are the other kind of subscription service many businesses are starting to use. For brands who are not household names, like Amazon, or major supermarkets, the added value route isn’t a great model, but selling monthly subscriptions to receive a selection of products can work very well.

What Kinds of Subscription Boxes Are Doing Well?

There are loads of different ecommerce businesses that offer subscription boxes, however these tend to be businesses in very niche areas that can offer an exclusive selection of products in that niche, or businesses whose whole model is based around subscription boxes – such as Loot Crate. Consumables such as coffees, teas, cheeses, and wines are popular for subscription boxes, and there are also very niche subscription box services from brands like Auster vaping, who provide high end e-liquid selection boxes as a subscription.

Brands who sell collectible items also can fare well with subscription boxes, as can some fashion and beauty companies. Some people like subscription boxes because they give them a chance to try lots of different products, and businesses can use them as a way of allowing customers to sample different things they may hopefully buy more of.

So, Are Subscription Boxes Something You Could Do Successfully in Your Ecommerce Business?

Starting a new ecommerce business with subscription boxes is the main or only product can perhaps be a good option if you have an idea that lends itself to the format and can differentiate itself in the market. Diversifying into subscription boxes from an existing ecommerce model can also be a good idea, but only in certain circumstances. If you can identify a product range that is well suited to this format within your business, or you serve a very niche market, putting together a subscription offering may well be a good idea. If you make and release new products quite regularly too, you may be able to sell boxes that allow people to be the first to try them.

It remains to be seen whether or not the trend for subscription boxes is here to stay, however for now, it is certainly a profitable thing to consider for some ecommerce companies.