Do you love getting subscription boxes? If you’re like most people, you probably love the excitement of opening a box and discovering what’s inside.
In a world where people are looking for the convenience of having products delivered to them regularly, subscription boxes are a big hit.
But how do subscription boxes make money?
Most subscription box businesses follow 5 main revenue models: subscription fees, product sales, advertising, sponsorships, and affiliate marketing.
In this article, we will explore each of these revenue models in-depth and see how they work.
So, if you’re thinking of starting a subscription box business, read on!
How Do Subscription Boxes Make Money?
If you start a subscription box business, you’ll most likely want to follow the most common revenue models that such businesses follow.
These are:
- Subscription fees
- Product sales
- Advertising
- Sponsorships
- Affiliate marketing
Let’s go deep!
1. Subscription Fees
The most common way that subscription boxes make money is through monthly or yearly subscription fees charged to the customer. This is a recurring revenue model where you will charge customers on a regular basis (monthly or yearly) for the box.
You can charge a subscription fee that is a flat fee or you could vary it based on the type of box, how often it’s delivered, and other factors.
For example, you could charge a monthly subscription fee plus an additional fee for shipping. Or have tiered pricing where your customers can choose different subscription options with different frequency levels and pricing.
2. Product Sales
Another way that subscription boxes make money is through product sales. This can be done in a few different ways.
First, you could include full-sized versions of your products in the subscription boxes. These products are also available for sale on your company’s website. Customers can then buy these products if they liked the one that was included in the box.
Second, you could simply include product samples in the subscription boxes. These are small samples of products that customers can try out. If they like the sample, they can then go to the company’s website and purchase the full-sized version of the product.
For instance, let’s say that you make aromatic candles and are looking for ways to market your latest candles to existing customers. All customers who have signed up for monthly subscription boxes can receive samples of your new candles in their boxes together with a discount code to buy the full-sized candles on your online store.
Another thing you could also do is to sell exclusive products only through subscription boxes. This is a great way to get customers interested in your products and then upsell them on higher-priced items. It is also a great way to get customers to sign up for subscription boxes in order to get access to these exclusive products.
3. Advertising
Another common way that subscription boxes make money is through advertising.
Some companies include ads in their boxes. These can be small ads for other products or services they sell, or they can be coupon codes that customers can use to get discounts on future purchases.
But you could go a step further. You could include ads from another company in your subscription boxes. You could then charge this company a fixed fee for including the ad or you could join their affiliate program and make affiliate income from the sale of their products (more on this later).
4. Sponsorships
In a sponsorship, a company pays you to include their products or services in your subscription box. This is similar to product sales but in fact, you are selling someone else’s product.
This can be a great way to make money from both sides. You charge your end customers a subscription fee for the boxes. And then you charge companies for putting their products into your boxes.
With this clever model not only can you make money from both sides, but you will also always have something to put in next month’s subscription box.
5. Affiliate Marketing
To earn money through affiliate marketing, you can include links to someone else’s products or services in your box and when customers click on these links and make a purchase, you earn a commission.
The links can be in the form of a simple QR code which is included in the subscription box. Customers can then scan the QR code with their phone and be taken to a landing page where they can learn more about the product or service. If they make a purchase, you will earn a commission on that sale.
Another way to do this is by including links in an email that is sent out to customers after they have received their subscription box. For instance, you could include a sample product from another company in your subscription box and then send an email to the customer with a link to purchase that product.
Summary
If you’re considering getting into the subscription box business, you’ve probably been asking yourself – How do subscription boxes make money?
In this article, we reviewed 5 of the most common ways in which subscription box businesses make money.
The most obvious and common is via subscriptions. (There’s a reason it’s called a subscription box!).
Customers pay a fee at set intervals (eg monthly, annual) in exchange for receiving a subscription box also at an agreed frequency – usually aligned to the payments. In these boxes, you can put the products which are also available for sale on your website.
You can drive traffic to your website by putting discount coupons or gift certificates in the subscription box. You could also advertise your own products or (for a fee) someone else’s products.
In addition, you could find sponsors who can offer their products or services to put in the subscription box in exchange for a fee that they pay you. And finally, you could join their Affiliate Program (if they have one) so that any further purchases made by the customer on their website can result in a commission to you.
So, there you have it! These are the main ways you can make money with your subscription box business.
Good luck!