The subscription business model is rather simple: Customers sign up for a monthly (or recurring) payment, and the company provides products, often in the form of a box sent to the house, but sometimes in the form of unlimited media access or even recommendations on how to dress or learn.
Many of these subscription-based ecommerce businesses run into problems, because of things like scaling difficulties, returns, branding and curating packages. That, however, doesn’t mean that it’s not one of the most profitable business models out there – and some companies are proving it with the numbers.
From Birchbox to Craft Coffee, quite a few ecommerce subscription businesses are extremely successful, so keep reading to learn about some of the hottest brands, and how they gained this success.
Birchbox was founded by two Harvard business students who met while in school. The company started as an idea to make the beauty product shopping process a little easier. The company started shipping in 2010, but it gained more than 100,000 subscribers after only to years, and it has a presence in countries such as Spain, the UK and France. The basis behind every box they send out is to provide samples that people can try and see if they like for the future. After that, subscribers can choose the ones they like and only select those for shipping.
As another monthly box business, Pants by Post takes a different approach than many of the apparel “item of the month” clubs.
The company sends subscribers a pair of women’s underwear every month. It’s that simple. Once again, subscribers can select their preferences and even specify that they enjoy a certain brand or style. Focusing on a single clothing item certainly helps the company stand out, but it also provides free shipping in America, and offerings for men as well.
Stitch Fix is not only in the item of the month club business, but they strive to educate subscribers on new styles. The business model works by sending several pieces of clothing that go well with each other.
The subscriber can choose to buy some of it, or none of it. What makes Stitch Fix standout is that discounts are increased when the customer chooses to buy every item in the box.
Jewel Mint is a subscription box company for jewelry, with exclusive giveaways for loyal customers along the way. The key component to the company’s success is that it allows people a chance to try out designer jewelry without the hassle of shopping and spending tons of cash. Not to mention, Jewel Mint sends out advice on styles.
Some dogs are picky, while others tear apart every toy you give them. That’s why Toys4Tails is the best way for dog owners to provide happiness to their little friends on a consistent basis. I would argue that the company's success came with timing (since there was no other business like this,) but it also has a nice selection of toys and rather affordable prices.
Audible provides audio books for a subscription, letting customers listen to their favorite books while on the train, in the car or while running around. The reason Audible has found such massive success (besides being powered by Amazon) is because it provides free books upon signing up, and the listening app is near flawless.
Trunk Club is similar to Stitch Fix, except it focuses on catering to men. Subscribers receive premium clothing, without the hassles of going out and shopping, and wonderful advice comes in from real people, who are assigned to each and every customer.
What’s the coolest part of Trunk Club? The company lets you meet your stylist, allowing you to communicate your needs and tell them how many clothes you need in the first place. Maybe your wardrobe is all worn out and communicating with a person would help them better accommodate you?
Citrus Lane sends out care packages to parents who don’t always have the time to shop around for their little ones. The company was eventually bought out by Care.com, after its huge success. What makes the Citrus Lane company different from other subscription businesses? It offers free shipping to start. Not to mention, the toys, books and goodies are hand selected and chosen based on awards, popularity and usefulness to children.
People drink coffee to keep them motivated to get more done throughout the day. Since coffee drinkers are often busy, why not send them the coffee they love? That’s what Craft Coffee is all about, since it delivers hand-roasted coffees from the best independent roasters in America. subscribers have a chance to try out different coffees every month, or even stick with what they like the best. This model is perfect for giving all the power to the consumers, especially considering coffee drinkers are quite particular about what they drink.
ShoeDazzle is one of the most successful subscription businesses on this list, and they can attribute that to great pricing on designer shoes and the flawless website interface. Subscribers receive wonderful deals when signing up for the service, and loyal customers are rewarded with VIP member credits.
Customers can cancel at anytime, and they can walk through the website within seconds and cancel a monthly order or change around what types of shoes they are willing to receive. The company also offers a cool system for generating a style profile, where the subscribers punch in their preferences, style tendencies and sizes to help ShoeDazzle send out the best options for them.
That’s it for the hottest ecommerce subscription businesses right now. I know there are plenty of other cool businesses to talk about in terms of subscriptions, but I feel this gives you a great idea as to what it takes to become successful in this market. If you have any questions about building your own subscription business, or even about these companies above, feel free to drop a line in the comments section below.