10 Subscription Businesses to Inspire Your Next E-commerce Store

Subscription businesses are on the rise

“Our blades are f*cking great!”

You’ve heard that sentence before haven’t you. Yup, that’s a line from the Dollar Shave Club promo video that went viral in 2012. The company is still around, and it’s doing amazingly well. Who would have thought selling shaving blades for a dollar online would make a successful business.

So why exactly are they successful? The video went viral, sure, but one viral video doesn’t make a successful company. The blades are cheap, sure, but you can get cheaper blades. The blades are great, but you can get better blades. No, those aren’t the reasons why Dollar Shave Club is successful. They are successful because of their business model.

DSC operates on a subscription model. That means you pay a fee every month, and in return you get shaving blades every month. It’s like how you pay gym fees every month in return for accessing their facilities. It’s the subscription business model that works in their favor.

Think about it. If DSC decided to stop selling blades as a subscription service and start selling them as a regular e-commerce store, would anyone buy them? Why would you shop online for a throwaway blade, no matter how cheap or great it is, when you can walk down to the nearest convenience store and buy one off the shelf in 10 minutes.

You see, shaving blades are a hugely competitive business. One on end you’ve got the top-quality and long-lasting razors like Gillette and Edwin Jagger, and on the other you’ve got the temporary blades at convenience stores, magazine stands and gas stations. It makes absolutely no sense to start your own shaving blade business when you’re competing with this.

But DSC has removed the competition. They took a completely different route and said, “Hey, just forget about shaving blades completely. Pay just $1 a month and you’ll never need to go shopping for another blade again!” You now have fresh, new blades coming in every month for just $1. That’s incredible!

Subscription businesses are here to stay. DSC is not the only one. Not only does a subscription business change the playing field, it also gets you regular, dependable, recurring revenue each month. Whereas with a regular e-commerce store you’re wondering when you’ll make your next sale, with a subscription business you can calculate exactly how much is coming to you each month and plan ahead.

So if you’ve got a product idea, and you think the competition is too strong, instead of changing the product why not change the business model around. I mentioned this in the article on validating product ideas. Think outside the box and see how you can convert it into a subscription business. Not sure if it will work? Validate it first by putting up a landing page, telling people to subscribe to your business by paying, and collecting e-mails when people sign up.

To get your creative juices flowing, here are some more examples of subscription businesses that are killing it. Maybe you might get inspired, or get some ideas, and start your own subscription business?

Birchbox

Birchbox is a subscription box for beauty, grooming and lifestyle products. They don’t make their own products. Instead, they create a selection of product samples from different brands and put it into a box that gets shipped to subscribers each month.

Subscribers get to discover new  products that have been curated for them by the experts at Birchbox. Brands get their product out to new audiences. Birchbox enables the connection.

It’s a win-win-win situation and shows that you don’t need to create yourown brand to start a subscription business. The value that Birchbox provides is the regular discovery and curation of products for customers. If they were a regular e-commerce business, they’d be no different from any other wholesaler.

Manpacks

Another subscription box with a twist, Manpacks allows you to build your own box of men’s products like underwear, clothing, grooming and so on. In this case, customers don’t get the same product every month like DSC, nor do they get a different set of products every month like Birchbox. Instead, each customer creates a custom set for themselves, say two pairs of underwear, a pair of socks, and a bottle of cologne, and they get this delivered to them.

Obviously, pricing for each customer is different and depends on what they put into their man pack. They also get access to a dashboard where they can add or remove items from their man pack.

The products offered are a mix of various brands plus some of their own products. The value they provide is the flexibility and convenience of receiving men’s essentials on a regular basis.

Trunk Club

Trunk Club is not quite a subscription business, in that they don’t charge you automatically every month. Yet the business model is pretty similar and worth a mention. You might get some ideas from this one.

They are basically a personalised clothing service for men. Customers sign up by filling out a form with their fashion preferences. Trunk Club then assigns a personal stylist to each customer. The personal stylist creates an assorted trunk of clothing from the 50+ premium brands that Trunk Club stocks and sends it to the customer. The customer then gets 10 days to try on clothes and return the ones he doesn’t want. He gets charged for the ones he keeps.

It’s up to the customer to choose when he wants his next trunk. His stylist remains with him and he can contact the stylist for consultations. So intead of spending time going to a bunch of different retailers and trying out clothes, customers get their own stylist for free and clothing sent to them at the click of a button.

Shoe Dazzle

Shoe Dazzle is like Trunk Club but for women. Customers sign up and enter their footwear and fashion preferences. They then get assigned a personal stylist who creates a custom showroom for them. The showroom is basically a collection of curated shoes based on the customer’s preferences.

Customers are under no obligation to purchase anything. They can pick and choose which shoes they want to purchase. The showroom is updated every month with shoes that Shoe Dazzle themselves creates. Sometimes they do add shoes from other designers and brands.

There is a VIP subscription service for people who want discounts, free shipping and a bunch of other perks. This works in an interesting way. Basically customers pay a fixed price of $40 every month and this entire amount goes into their store credit. It also rolls over so if a customer decides not to buy a shoe one month, she gets $80 to spend next month. The perks, then, are just that. Extras that come along with the subscription at no cost to the customer.

Citrus Lane

First time moms will know how tough it is to find new toys and products for their children. Younger kids also tend to chew, break, lose or get bored of toys at an alarming rate, so parents need to hunt for new toys to entertain their kids regularly.

That’s where Citrus Lane comes in. It’s a monthly subscription box for children. The products inside change every month and are curated by the staff at Citrus Lane. They basically source different products based on the age of the subscriber’s child and pack them up into a box.

More than convenience, Citrus Lane offers a peace of mind to parents and lots of joy to children.

Craft Coffee

Subscriptions need not be restricted to non-consumables. There are a whole bunch of coffee subscription services around, and Craft Coffee is one of them.

They basically curate coffees by blind-tasting coffees from various artisan microroasters. Each month they pick three good coffees and send it to subscribers.

Customers get to discover new coffees every month at affordable rates. Additionally, Craft Coffee sends tasting notes and brewing tips to customers based on the coffee for added value.

Doorstep Dairy

As you might imagine, Doorsep Dairy delivers dairy products to your doorstep. It’s not, however, a regular delivery from the local supermarket. Doorstep Dairy actually teams up with local farms and brings customers fresh, healthy and organic products directly from the farms.

Obviously, they deliver value through healthy food, but the real value is eliminating big supermarkets and dealing with farms. Customers get the convenience of having their kitchens filled once every week, while farms make more sales.

Nerd Block

Do you need comic con figurines and t-shirts delivered to your house each month? No, really, do you need it? Probably not, right? I mean, you can survive if you don’t get it.

Yet people subscribe to Nerd Block. It may not fulfill a need, but it definitely fulfills a passion. If you’ve ever seen a Comic Con, you’ll know what I’m talking about. This is an example of a well-defined niche and Nerd Block are doing a great job of delivering to passionate people who love the surprises they get every month.

Plated

Plated does food delivery in an interesting way. They don’t deliver a bunch of groceries to your house, neither do they deliver cooked food. What they do, instead, is send you a recipe and the ingredients for it, packed in precise proportions.

Subscribers can pick from a bunch of gourmet recipes. They still have to pay for each plate but their subscribership gives them a discount as wel as auto-delivery.

The value Plated offers is a substitute for going out. Instead of eating at expensive restaurants, get the same gourmet food at home. Why don’t they just cook and deliver the food? Well, that’s what sets them apart. They allow customers to cook the food themselves, thus letting customers in on a unique experience.

Bark Box

Dare I call them the Birch Box for dogs? This one is a great example of thinking outside the box, so to speak. So far we’ve been looking at products and consumables for humans, but what about for pets.

Every month subscribers receive toys and treats for their dogs. Bark Box takes information like age and size of the dog so that they can customise the box to some extent.

If you’re a pet owner, you’ll know how good it feels when you get your pet a new toy to play with. Dogs tend to chew toys up or get bored of them, so dog owners need to keep replacing them. Bark Box fills this need while also donating a percentage of revenue to dog shelters.


 

As you can see, each of these businesses have taken regular e-commerce products in competitive niches and turned them into profitable subscription businesses. Some of them have received investor funding, and others have gone on to be acquired. Sometimes, a change in strategy is all you need to set yourself apart and become profitable in a crowded market.

So if you’ve had any product ideas that you thought might be too tough to compete in, try looking at them from a subscription viewpoint. Take inspiration from these businesses and see if their business model can be applied to your product. You could create your own product, or use other brands. You could provide a regular subscription service, a personalised service, a curation service, or just target niches like nerds.

If you think you have a good idea, and you’ve done some validation, it’s time to start your subscription business. In subsequent posts, we’ll go through specific steps you need to take to successfully launch it. Subscribe below if you’d like to get notified when the posts are out.

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