Step-by-step guide on how to start a subscription box business

One of the easy ways for consumers to get the latest products on the market is through subscription boxes. They provide consumers with an introduction to new products centred around topics and themes and products they enjoy, as well as making inspecting the mail enjoyable.

With the growing dependence on e-commerce businesses during the pandemic, the popularity of subscription boxes sored. With the pandemic restrictions coming to a close, many expected subscription boxes to become a thing of the past, however their popularity continues to rise.

Subscription commerce is a subscription-based business strategy that generates recurring monthly revenue by sending personalized products to consumers. There are subscription box companies for almost any product type, from puzzles to cosmetics to pets. So, the main question here is how do you make your business equipped to tackle the subscription box market?

Building a successful subscription box needs much more than a solid vision and a love for the things you will be shipping.

Let’s have a look at the step-by-step guide on how to start a subscription box business-

Subscription box business idea

A creative idea is its backbone for subscription box businesses' success. The basis of any strong business is a good, competitive idea. Regarding subscription commerce, what separates good theories from prominent ones is knowing what will add value and enjoyment to your customers' lives. To ensure your idea withstand up against the competition, you’ll need to spend time analysing your market, your competitors and your customers.

1. Analysis of the market-Conducting market research before launching your subscription-based business idea is essential. You need to be aware of any products in the market that are similar, and whether you’ll be able to gain consumers with your idea.

2. Competitor analysis-There are two types of competition you’ll need to be aware of: direct and indirect. Direct competition relates to other businesses that offer the same product as you. These can sit within both the subscription market and the general sale market, so you shouldn’t limit your research to subscription-based businesses only. Indirect competition relates to other businesses that offer products in a completely different category to yours, but that can be purchased as an alternative.

Tea and coffee would be an example of two products that are indirectly competitors of one another. Once you’ve identified competitors in both of these sectors you should focus on what aspects of their product or brand offers significant value to their customer base as well as how they structure the sale of their product. Try to find the answers to the questions like, how often do they deliver their subscription boxes? What are they delivering, and at what price?

3. Analysis of customers-After discovering your market fit and evaluating your competitors you should spend some time getting to know your potential customer. How old is your customer? Where do they shop? What is their level of income? Which social media channel do they like? Customer purchasing habits, patterns, and trends differ in the subscription box industry. The biggest hurdles are getting them to sign-up and then keeping them engaged. It’s therefore important to be open-minded to who your genuine customers are and what will add value to their lives.

Make a prototype for your subscription box

One of the most prevalent misunderstandings when launching a subscription box is having your first shipment ready before you begin marketing. This can be problematic because relying on the finished product to produce marketing assets could delay your launch and the delivery of your first subscription. The idea behind generating a prototype box is to introduce your potential customers to what sorts of products they’ll be receiving if they sign-up to your subscription.

1. Select the ProductsMake sure you only include products representing the types of items you intend to send to your consumers once they sign up. The most crucial aspect is to avoid deceiving people by using a prototype box. If people believe your advertising efforts have misled them, they are more inclined to cancel their subscriptions.

2. Select the boxDepending on what stage you’re at, you might or might not have your packaging finalised. Nevertheless, it’s important to select a box for your prototype that easily displays all of the items for marketing purposes. A prototype should give the consumer a taste of the unboxing experience but leave them wanting more.

The most important thing you should consider is branding and design. Your box is the face of your company, despite how high quality the items are inside. Therefore, a box that isn't up to par can negatively impact the user's experience.

3. Selecting packaging materialsIt is common for your packaging to differ in your prototype compared to your finished box. Your prototype needs to entice the customer so it’s common to pack out your products with tissue paper or crinkle paper, ensuring they’re still visible. In reality, you’re likely to use more robust packaging such as cardboard or bubble wrap to ensure your product is delivered undamaged.

Uncover a fulfilment service for your subscription box business

You can most likely manage to fulfill yourself to start with. However, if you want to compete with the large brands, you may need to hire a fulfilment business or introduce a fulfilment software solution to manage the logistics of sending your boxes each month. Many organisations can help you save hours in packaging and delivery each month.

Establish a budget for your business

Another important aspect in starting a subscription-based business is to make a proper business budget. Establishing a budget for your business will help you effectively measure characteristics like return on marketing expenditure and general profitability, you need a well-defined and precise budget.

When deciding what your budget should be, you should take the following into consideration-

  • What is the most money you can spend on marketing to acquire each customer?

  • What do you think your customers are willing to pay for the products you'll send them?

  • How much will it cost to ship your products each month? What about packaging and other fulfilment costs?

  • Evaluating all of the costs associated with the client acquisition, fulfilment and customer retention will help you decide what you need to spend to be profitable and thriving in the long run.

Specify the correct price for your subscription box

One of the most critical components of starting a subscription box business is determining how much to charge for the subscription box. You don't want to set too low as you won’t earn a significant profit, or too high otherwise you might lose out to the competition.

You should do some in-depth research to determine which price points appear most influential with your target audience? If you strike the right balance you’ll lay the basis for a continuous, reliable income stream.

Whilst determining your pricing, you should take into consideration the following aspects-

  • Cost of the product

  • Cost of the box

  • Cost of materials for packing

  • Fulfilment cost

  • Shipment cost

  • Transaction fees

Create a good brand for your subscription box business.

Branding is an essential step in starting a subscription box business. Branding helps people to identify, share and even recall your products and services. If your branding is influential, people will recollect your business at first sight. Furthermore, if people are impressed by the packaging and contents of your box, they’ll be more inclined to share it, providing you with free publicity that you did not have to pay for.

For influential branding of your subscription-based business, you should consider the following points-

  • People should be able to recognize your business from your brand identity. This means your brand's logo should be unique but also straightforward so consumers will know what your business produces purely from the logo.

  • The brand's name should be catchy, but also notify customers about the type of business and what they will get if they place an order with you.

  • Creating a memorable slogan is a great way to assist both current and future consumers in remembering what your company is all about.

Create a website for your subscription box business

Your website is your marketing tool as well as a place to sell products. Because any eCommerce company can outgrow the capabilities of template sites, a conversion-optimized, custom e-commerce site is beneficial if you're starting with a substantial budget. One of the benefits of building your own site is the ability to customize both the design and functionality to enhance the customer experience and improve conversions.

After conducting extensive research into your target competitors, buyers, and common user behaviours, an expert can design conversion-optimised websites just for you.

Market the subscription boxes appropriately to reach maximum customers.

To begin successfully selling your subscription box, you’ll need a website that’s optimized for conversions. Learning your ideal buyer's journey and the types of content they’ll require at each stage of their relationship with your firm is vital. You need to know what kind of content your target subscription buyer values, so you can develop the right content for them at each stage of their journey and encourage them to buy your product.

Start creating more "deals" for your visitors and persist in encouraging them with unique material until they are subscribers.

Creating tutorials about utilizing the products you send your members every month, whether your box concentrates on crafts, nutrition, beauty, or even men's grooming, is a great way to gain customer engagement.

Increase your customer base

As you advance, the purpose is to continue to grow your business by increasing your customer base. One of the most cost-effective ways of doing this is through word-of-mouth referrals- customers referring to other customers.

Many recurring subscription-based businesses focus solely on customer acquisition and neglect to invest in keeping their current customers pleased. The objective is to keep boosting your company. Providing good customer service is one of the most effective ways to keep your customers happy. Customer issues are unavoidable and this is especially true for new businesses. Your success will be determined by how you treat your current customers and handle customer issues. Social media channels can assist a lot in this aspect. You can create a Facebook page to respond to the queries and problems of your consumers.


Creating a subscription box business can be a fantastic way to make your income more predictable, smooth out seasonal fluctuations, and satisfy your most loyal customers. Many entrepreneurs have been attracted to the subscription box sector because of its great possibility of growth. However, you should always refer to guides on how to start a subscription box business to ensure you’ve covered each of the setup stages. Doing this can result in a solid business that is balanced to generate predictable growth and long-term success.

The subscription box business has opened up an entirely new market in the consumer goods industry. You might be able to profit from this business strategy if you play your cards right. The above steps on how to start a subscription box business will help you get a head start on producing and launching your subscription box business.

You can gain more insights by reading our other blogs on what is pro rating and how to reduce customer churn.