Subscription boxes are one of the best ways to shop, period. They offer consumers unique experiences curated around products and themes, introduce new brands, and make checking the mail just plain fun.
On the business side, subscription commerce offers a stable financial model rooted in recurring monthly revenue that can be built around almost every niche – from puzzles to beauty to pets. If there’s an existing community around a product or category online, chances are you can build a subscription box around it.
But how do you go about it? This article will provide the best tips and tricks to help you succeed. Let’s get into it.
- Top 20 Best Craft Subscription Boxes in The UK
- What Should You Keep in Mind Before Starting a Subscription Box Business?
- How to Start a Subscription Box Business
- How Much Does it Cost to Start a Subscription Box Business?
- What is a Subscription Box?
- How Do Subscription Boxes Work?
- Are Subscription Boxes a Viable Business?
- What Are The Pros And Cons of Subscription Boxes?
- How Much Money Can You Make Selling Subscription Boxes?
- How Many Items Should You Put in a Subscription Box?
- What is The Difference Between a Membership And a Subscription?
- Can I Resell Products in a Subscription Box?
- How Many Subscribers Does The Average Subscription Box Have?
- How do I Get my Product Into a Subscription Box?
- Types of Subscription Box Suppliers
- How Long do People Keep Subscriptions?
- Why Are Subscription Services so Popular?
- 7 Reasons Your eCommerce Business Should Use Subscription Services
Top 20 Best Craft Subscription Boxes in The UK
If you’re looking for craft subscription box UK ideas, we’ve got you covered! From calligraphy to pottery, crochet clubs and art subscription boxes, we’ve found a range of monthly craft boxes to suit makers of every shape and size… from beginner stitchers to sewing addicts to multi-crafters who want to try something new.
Read Also: Using Local Business Directories To Boost Your Sales
We’ve even included the best UK craft subscription boxes for kids too to inspire the next generation to get creative (they make a great alternative to plastic toys).
1. Craftiosity
- Not on the High Street, prices start from £26.95 for a one month kit
- Best for: variety of projects
Treat your favorite crafter or yourself with a subscription to Craftiosity. Each month, you’ll receive all the tools, materials and easy to follow photo instructions to make a beautiful project. It could be lino cutting, book-binding, Japanese shibori dyeing – or something completely different! Buy a subscription and you’re ready for a perfect crafternoon.
2. Cosy Craft Club Subscription Box
- Cosy Craft Club, £24 per month
- Best for: discovering new crafts
Cosy Craft Club is a monthly UK craft subscription box for adults. Every month features a new craft that’s delivered straight to your door, plus there are online resources and inspiration to go with it. Whether it’s arm knitting, macrame or weaving, you’ll learn new skills, make something gorgeous and craft along with their Cosy community.
There’s been everything from lino printing to jewelry making, tie-die to crochet basket making. You’ll never be bored with a Cosy Craft subscription!
3. Craft Box Club
- Craft Box Club, £22 a month
- Best for: sustainability – all boxes are plastic free
If you’re on the hunt for craft boxes for adults with a conscience, Craft Box Club is the one for you. Each box comes with clear, easy to follow video guides making it super easy to get creative. Plus you’ll receive personalized craft help and advice so it’s ideal for crafting newbies. They aim to keep their projects frustration free by including all the tools and guidance you need to make the project.
Recent boxes have included beeswax food wraps, needle punching, artisan salt dough, and washi tape coasters. One great benefit of Craft Box Club is you can return your box if it’s not the craft for you – just box your tools back up, wrap and send them back to Craft Box Club and you’ll get £5 off future subscriptions.
4. Monthly Craft Subscription Box – Corinne Lapierre
- Not on The High Street, £24.50 for two months
- Best for: Nature and folk art lovers
Sign yourself up to receive a package full of creativity each month, with exclusive craft projects using felt, embroidery, stationary and a few little surprises to make your day. We like the traditional design of these kits, inspired by nature, folk crafts and the seasons.
Each month you’ll get all the materials and instructions you need for a beautiful new craft project Choose between a one, two or three months subscription.
5. The Clay Club Pottery Kit
- Selfridges (£48)
- Best for: pottery
This one isn’t technically a regular craft subscription box, but it’s a great starter kit and after binging The Great Pottery Throwdown we’re including it as it’s top of our Christmas wish list this year. Each kit includes paint and tools to create your own clay home décor, pottery, sculpture and art with a DIY home pottery kit, kids pottery
6. Monthly Bread Making subscription
- Not on the High Street, £35 per box
- Best for bakers
The only food-based box in this kit, we’ve included the Baker Boxx Bread Box for all those of you who also love to make things out of food as well as craft supplies! Sign up to get a unique bread baking kit in the post each month.
All recipes are carefully sourced from around the world and each box includes little handy extras, tips, and tricks! It’s available for 3, 6, 9 or 12 month subscriptions.
7. Pom Pom Club by Post
- uOpen (£14.95 per box)
- Best for: fun factor
Er yes, you heard us! Pom pom fans everywhere (yes we see you) unite with these fun and easy pom pom craft boxes. PomStitchTassel, an independent Devon-based company, are here to fill your life with an array of DIY pom poms, tassels and yarn crafts, with a new yarn-themed craft every month.
Designed for teens and children aged five and older, we don’t see any reason why grown-ups won’t enjoy this lovely gift idea too. It is, after all, a fact no one can dispute that making pom poms ups the joy factor in life significantly!
8. Knitting box by Knitting Box Club
- UOpen(from £24.99 per box)
- Best for: Choose your knitter type
We love the versatility of this nifty knitting subscription box – with three options to choose from – just yarn, knitted toys or baby clothes – so you can sign up to the monthly knitting post that suits your favorite type of project.
Whatever you choose you’ll get a monthly knitting craft subscription box to your door, curated by an indie family business in Cornwall. If you pick the Knitted Toy Chest or Baby Clothes Knitting Box options, you’ll receive super sweet patterns and projects to make, plus yarn (choose the color for babies), needles and notions to make up cute family knitting projects.
If you’re all set for patterns, opt for Just Yarn and get 6 to 8 of the latest yarns from leading brands – you can opt for a crochet or knitting theme to further personalize your crafty preferences!
9. The Little Box of Knitting
- Amanda Bloom’s Little box of knitting, £49.95 for 3 months
- Best for beginners who want a complete project kit with video guide
Following on from their success with Little Box of Crochet, Amanda Bloom’s Little Box of Knitting has been launched! This quarterly box, includes the yarn and needles required for the project along with exclusive stitch markers that have been designed for subscribers.
Claire Garland of Dot Pebbles Knits designed this box and it comes with a detailed pattern booklet, technique videos, a bodkin for sewing in ends and even an exclusive postcard and matching notebook by Nic Allen. Plus some extra treats. It’s a box that comes with everything a knitter could dream of!
10. Knit in a Box
- Knit in a Box, £21.99 per box
- Best for knitting for children
Knit in a Box is a family run, monthly knitting subscription service. Every month you’ll receive a mystery knitting kit that’s been carefully curated and packed by the Knit in a Box team.
You never know what you’re going to get but there will be something to knit for a baby aged up to 12 months. You can choose monthly boxes for babies (boys, girls or gender neutral) or children up to the age of six. Yarn, knitting pattern, buttons are all included plus extra surprises! If you’d prefer knitting for adults they have a ladies box too.
One of the loveliest things about this craft subscription box is that you get an exclusive membership to the Knit in the Box VIP customers Facebook Group. This community will allow you to make friends with like-minded knitters, share patterns, views and projects.
11. Mystery Yarn Box
- Etsy, from £17.85 per box
- Best for: Lovers of surprises
Ok so this one isn’t technically a regular subscription box, but we’re including these sweet mystery boxes of hand dyed yarn from Dina’s Home of Crafts in this round-up as we just think it’s a lovely idea, and even though you buy the boxes monthly, new ones are released each month for regular surprises. As a one-off purchase, they’ll suit those reading who have a limited budget and can’t commit to a monthly cost.
Choose between basic, advanced or luxury options, with 4-ply and DK variations available for each tier. You’ll receive skeins of yarn and a stitch marker in the basics box, plus additional knitting or crochet accessories and a gift with the next step options. Just leave a note when you order to let them know if you’re a a crocheter or knitter. Price includes UK shipping.
12. Build a blanket – lucky dip skeins club
- Ruffles Crochet Crafts (Etsy, £7.50 per box)
- Best for: flexibility – you can buy individual boxes ad hoc
This month-by-month blanket builder club really appeals to us – each month you get a random pair of 20g Skeins of yarn on a lucky dip rotation – so no two blankets by club members will be the same. Choose between DK 100% Merino Superwash Wool or Sock yarn.
These yarn building boxes will appeal to both knitters and crocheters – use them to create your blanket with your favorite technique to make your own beautiful, colorful blanket with Ruffles Hand Dyed Yarns.
13. The Little Box of Crochet
- The Little Box of Crochet, £37.90 per box
- Best for beginners who want a complete project kit through the door
The Little Box of Crochet is a craft subscription box that’s packed with everything you need to make their exclusive projects. Every box will feature an exclusive project by some of the best designers around the world and come with “how-to” photos to help you start making.
14. TOFT Bird Club Crochet Subscription
- TOFT, £30 per quarter
- Best for amigurumi fans
TOFT offer a range of fun craft subscription boxes, starting from £14.99 per box, but their most popular craft subscription box is the infamous Ed’s Animal Club, which gives you everything you need to make an adorable array of birds. Their subscription will last 12 months and guarantees you 7 surprise deliveries throughout the year.
You’ll get an exclusive crochet amigurumi pattern to create a standard size Edward’s Menagerie animal, along with an additional story postcard. Don’t forget the checkout #edsanimalsclub to see all the past animals and what your fellow crocheters think of the box.
15. The Calligraphy Box
- uOpen (£19.08 per box)
- Best for: Calligraphy fans or those who want to learn
Calligraphy is enjoying a huge resurgence at the moment, and if you’ve always been curious to learn more about this soothing craft, a monthly subscription to The Calligraphy Box is well worth the investment. You’ll get to learn and try a range of new calligraphy skills with fresh lessons and materials, suitable for right and left handed writers, each month.
It’s a great way to stock up on your essential kit as you’ll gather pen holders, inks, nibs and practice sheets, with lessons to teach you a mix of modern, Copperplate and Spencerian calligraphy styles.
16. Papercraft Society
- uOpen (£24.99 per box)
- Best for: Papercraft addicts
Build up your papercraft stash with a monthly curated collection of papercraft goodies including dies, stamps, papers, embellishments, collectibles and exclusive designs and projects worth over £60. Each box also comes with a 36-page booklet to help you make the most of each box.
17. Felix Loves Fabric subscription box
- Etsy (£22 per box)
- Best for: stash lovers
If, like us, the thought of receiving four modern fabric fat quarters in the post each month makes your heart hop, then good news – we’ve got the craft box for you. These beautiful fabric subscription boxes are also especially handy if you find trying to pick a fabric in the haberdashery all a bit overwhelming.
Offering fresh, bright fabrics, each 100% quilting weight cotton and wrapped in tissue paper and ribbon, the monthly picks vary in theme but you can see examples of previous packs in their Etsy shop to get a feel for whether they’re your cup of tea before you sign up.
18. Skimming Stones subscription box
- Skimming Stones, £26.95 per box
- Best for original fabrics
Launched by fabric designer Laura Tulloch last year, this Aberdeenshire-based sewing subscription box comes with a unique fabric that’s been designed in-house, and everything you need to make a project, including step by step instructions. This box is so lovely it is topping our team’s birthday wish lists this year.
19. Sew Darn Sweet Boxes
- Sew Darn Sweet, £13 per box
- Best for haberdashery fans
Oakapple Haberdashery’s Sew Darn Sweet craft subscription box is the box for passionate sewists. Every box contains four beautiful fat quarters (measuring ¼ metre, each piece 50 x 55cm), as well as haberdashery bits and bobs such as binding, ribbons or buttons. Every box has a new theme and comes with project suggestions for those of you who need a boost of creativity.
20. Grow and Sew– Sewing Subscription Boxes
- Grow & Sew, from £24.95 a month
- Best for sewing for babies
This sweet sewing box makes a lovely gift for a friend, family member or colleague. It contains everything you need to sew something for a new baby – it could be an accessory, a piece of clothing or a decoration for the nursery.
What Should You Keep in Mind Before Starting a Subscription Box Business?
So this is for all those people who have a great idea and no idea how to actually implement it. These are 4 things to decide before you start your own subscription box company.
There are many more decisions to make along the way (like website design, platform options, credit card processors, and a bunch more), but before you go crazy and spend 3 months designing the perfect logo, you’ll want to focus on these questions first.
1. What do you want to sell?
Beauty Products! Dog Stuff! Snacks!
Figure out what your passionate about or where there’s a specific need. Plated figured out a way to help non-chefs feel like a professional without having to go to the store and pick out the ingredients or take a class on how to use the broiler. Taste Guru knows how hard it is to find delicious gluten-free snacks without having to go through the painful (and expensive) process of taste testing.
Before you choose what you want to sell it is a really good idea to see if someone else is already doing it (or how many people are already doing it). ‘Well Aly, I used Google so can I get started?’ – that’s a good start, you should also check out http://boxes.mysubscriptionaddiction.com. The list is much more involved and Liz updates it regularly.
2. How are you going to make money?
Seems like a crazy question to ask, customers, pay you for your box of the month club so that’s how you make money! Well, not always. In fact a common thing subcom founders say is that they wished they had charged more for their box. What you have to decide is: will you pay for the products in your box or will you partner with companies to get products for free?
You Pay For Your Product: This is the way you were probably thinking. You buy stuff to put in the box and customers pay you for the box. The biggest thing to keep in mind if you choose this model is how much to charge for your box.
Pros: You have more flexibility in what you include in your box, so you are in control of what your customers are getting.
Cons: This model means that you make money off of 3 month and 6 month prepay plans, not really month to month users. It also means that your margin is small so you won’t really start making money until at least year in.
You Don’t Pay For Your Product: So what if you don’t want to pay for the product? Then partnerships are the way to go. You can partner with companies and have them provide you with free samples (and sometimes full sized products) to include in your box.
Pros: You aren’t paying for your product so your making money almost immediately and since your margin is larger you’re less dependent on customers staying with you for longer.
Cons: You’re going to have to focus hard on partnerships to get a variety of products in your box and avoid giving out repeat items. You’re also dependent on what the company gives you which means you have less freedom to include whatever you want in your box.
3. Who is your ideal customer?
Barkbox recently said in an interview that their ideal customers are 20-somethings without kids and empty nesters (basically anyone who isn’t already spending money on kids). This doesn’t mean that people with kids aren’t buying Barkbox but they’ve recognized where they can get the most traction and highest retention. So who is your ideal customer? Don’t say everyone…don’t be that person.
4. How will you ship your boxes?
Will you ship them from your garage? Use a third party company? Ship straight from your partner? There really is no right or wrong answer here it just depends on what your box includes.
Some boxes like El Hombre Salsa send you salsa from one partner every month so they ship directly from the partner without having to worry about packaging and shipping themselves. Other companies like Yumvelope are curating the products that go into each and every box so they ship out themselves
How to Start a Subscription Box Business
We don’t need to tell you that subscription boxes have taken the world by storm. With well over 2,000 subscription box brands popping up in recent years, it’s hard to ignore the business opportunities available in this burgeoning industry.
That said, there’s a lot more that goes into launching a successful subscription box than a good idea and a passion for the products you’re shipping. In fact, that’s exactly why we’ve created this guide.
Step 1 – Select a Niche Market
The first and most important step in this list is inherently simple, but can often be more difficult than people think. You may already have a loose idea of what your box will contain, but how carefully have you analyzed your niche?
How Will Your Box Fill a Void in a Saturated Marketplace?
Answering the question of how to start a subscription box really begins with how your idea will fill a void in a highly saturated marketplace. Your box needs to stand out, but how do you plan to do so?
If possible, your box should deliver products that don’t yet come in competitor boxes. That’s not to say you can’t have any competition or overlap in your space. You’ll just need a way to stand out and deliver in a new and unique fashion.
Step 2 – Conduct Competitor Research
We’re talking about finding a niche that isn’t overly saturated, where you’ll be able to fill a void or improve on the products of your competitors. The only way you’ll be able to determine if your box meets these requirements is by doing some serious competitor analysis.
Stand Out by Delivering Greater Value
Let’s be honest, it’s unlikely that you’re coming to market with an entirely new product. If you’re one of the select few that will be able to deliver something entirely new to the market, you deserve a round of applause. You may very well have an easier road ahead of you.
Otherwise, you’ll be working to improve the way an existing concept is being delivered to market. The easiest way to stand out is by doing what you do better than your competition and marketing your improvements effectively.
Identify Willing Suppliers
Competitor research also comes in handy for the third step in this list. Soon you’ll be needing to select product suppliers, but you’ll find that not all product manufacturers will be willing to work with you. Even fewer will be willing to negotiate a discounted pricing for a new box on the market.
Lucky for you, your competitors are already doing tons of research for you, saving you plenty of time. Contacting brands in competitors’ boxes, and those from related niches will allow you to enjoy many of the same benefits of your competition without the hassle of negotiating.
Remember, we want you to deliver a unique and improved product, so don’t rely exclusively on products your competitors already work with. Use them as a foundation from which you can build with your own negotiations for new and exciting brands and products.
Step 3 – Conduct Product Supplier Research
When people think about how to start a subscription box, they tend to get excited about the types of products they’ll be shipping in their boxes. However, it’s not always as easy as contacting a supplier and shipping their product.
When Identifying the supplier for the products you’ll be shipping, you’ll want to put in the extra work ahead of time to vet their reliability and determine whether or not their costs per product fit your budget.
Reliability
If you plan on shipping hundreds or thousands of boxes each month, you need to make sure each and every supplier you include in your boxes will be able to deliver on time.
You don’t want their internal issues holding you up. They won’t be the ones hearing from your customers about your box being late or it missing a product.
Cost
While conducting supplier research you should also be negotiating for the best prices for each product. Eventually, brands may be willing to give you their products for free, as your box will represent a new channel of exposure.
However, right off the bat, you’ll likely be looking at paying somewhere between wholesale and retail cost for each of the products you ship. This is where your expert negotiating comes in handy. Just because you’re a new business doesn’t mean you don’t have any leverage.
Contact multiple brands that offer similar products and work to find the best value from each. You’ll be able to leverage that information with more expensive/less flexible brands to help drive your costs down.
Step 4 – Conduct Packaging Size and Supplier Research
When people think about how to start a subscription box business, the box itself is often an oversight. Everyone is focused on the products they’ll be shipping.
Once you’ve conducted your supplier research, you’ll have a good idea of the types of products you’ll be shipping every month. You’ll want to have a set template for the number and sizes of each of the products you’ll ship so you can get an idea of the size of the packaging you’ll need to fit them all in.
Size and Weight
Box size and weight can be a major issue for subscription box companies. Consider the cost to ship different sizes and weights while creating the outline for the products you’ll be shipping and the size of the box they’ll be traveling in.
Remember, tiny modifications in size can have a drastic effect on the price you pay to ship your box. Small modification in shipping price can have a dramatic impact on the profits you receive from each box. Small reductions in profits can have a significant impact on the money you can spend to acquire each new customer, and small decreases in a marketing budget can have a serious negative impact on results.
You can probably see where this is heading.
Don’t miss the small issues that can snowball into having a dramatic impact on your overall success.
Packaging Suppliers
The process of how to start a subscription box that is poised for long-term success revolves around the careful consideration of every aspect of your business. The company that supplies your packaging is one of the most important considerations you’ll make.
You want to ship a cost-effective box, sure. But you’ll also want to ship a box that makes receiving and opening it an experience each month. There are countless companies that can create your packaging, so take the time to find one that will deliver the perfect balance of quality and economy.
Step 5 – Conduct Fulfillment Service Research
If you’re brand new and starting off small, you’ll likely be able to handle all of the fulfillment yourself. However, if you’re considering how to start a subscription box that can compete with the big dogs, you’ll want to hire a fulfillment company to help you with the logistics of delivering your boxes each month.
Collect Quotes and Negotiate
Like with the packaging, you’ll want to shop fulfillment companies. There are plenty of companies that can help to save you hundred of hours each and every month, allowing you to focus on the rest of your business.
Step 6 – Create a Realistic Budget
In order to fully understand things like return on marketing investment and overall profitability you’ll need to create a clear and well-defined budget.
- How much can you expect your customers to pay for the products you’ll be sending them?
- How much can you expect to pay for the products you ship each month?
- What about the cost of packaging and fulfillment?
- What is the average LTV (lifetime value) of customers in your niche?
- How much can you afford to spend on marketing to acquire each customer?
Think about all of the costs involved in production, fulfillment, customer acquisition, and customer retention to get a clear picture of what you’ll need to spend/charge to be profitable and successful in the long term.
Step 7 – Establish Your Branding
Effective branding is a big part of how to start a subscription box that people notice, share with their friends, and remember long after they’re exposed to it.
Name
A catchy name is only part of effective branding. It needs to clue people in to the type of business you’re in (subscription box) and the type of products they’ll be receiving when they order from you.
Logo
Think of a logo as a business name that you don’t have read to recognize. Even if your logo is a script that spells out your box name, people will likely recognize the shape of the logo before they ever read it.
Also, logos shouldn’t be overly complicated. Trying to be creative for creativity’s sake can get you into trouble, as it can make it difficult for people to understand your brand name and what it is you do/sell. Instead, be unique but keep your design simple. It will be far easier for people to identify with your brand if they can immediately understand it.
Think of the Amazon “a”.
Slogan
Some brands are known for their slogan that clearly identifies the benefits of doing business with them. While it’s certainly not a mandatory branding requirement, coming up with a compelling slogan is a good way to help your customers and potential customers remember what you’re box is all about.
Step 8 – Create / Launch Your Website
Answering the question of how to start a subscription box business has been all about preparation and research up to this point.
Your website will become the foundation of your subscription box business and act as the public face of your brand. Your marketing, customer service, and every customer interaction will revolve around your site. In case we’re not being clear enough, it’s important, O.K.?
Template Site
Depending on the amount of capital you’re starting with, a template site from an eCommerce platform like Shopify may be the best way for you to get operational. They’re easy to create, inexpensive, and provide you with a plug-and-play interface that will allow you to get a site up in a matter of hours.
Template sites have their disadvantages, but if you’re operating on a budget and don’t have the technical savvy to build a conversion-optimized, custom ecommerce site, they’re a good starting place.
Custom Ecommerce Site
It’s easy for any eCommerce brand to outgrow the abilities of template sites like the ones mentioned above. For those launching with a more comfortable budget, we recommend building a conversion-optimized, custom eCommerce site.
The benefits of this type of site are great, most notable is the ability to fully customize each and every design element and functionality to optimize the user experience and drive more conversions.
Conversion-optimized sites are built by expert marketers based on extensive research of your ideal buyers, competitors, and user behavior on your website. The process goes far beyond simply constructing a good-looking site that shows off your products.
Instead, each page is crafted around a single user goal, driving visitors toward signing up for your email list, purchasing a single box, or signing up for a full membership.
Step 9 – Market Your Subscription Box
Once you’ve figured out how to start a subscription box company, you’ll need to understand how to effectively market your new business. The topic of marketing your subscription box is beyond the scope of this post, which is exactly why we’ve added this MASSIVE guide to subscription box marketing.
Inside you’ll find a step-by-step process to developing an effective subscription box marketing strategy and how to deploy the most powerful marketing tactics to suit your niche and your unique customers.
If you’re launching a subscription box business, this is a must read!
Step 10 – Work to Retain Your Customers
Once you’ve done the heavy lifting and signed up a customer the hard work is over, right?
Not even close!
Too many recurring revenue (subscription) brands are focused on customer acquisition and don’t put enough resources into keeping their existing customers happy. The truth is that signing new customers is far more expensive than keeping existing customers, but many brands still fail to recognize the potential represented by their current subscribers.
Quality Customer Service Is Mandatory
When it comes to the subscription box industry, we already know that there are plenty of competitors for your customers to fall back on. Your goal is to never give them a reason to do so.
Excellent customer service is one of the most effective ways to keep your customers happy. Problems arise, it’s inevitable. This is especially true for new businesses. What will define your success is the way you handle them.
Rather than doing your best to sweep problems under the rug, put resources behind correcting the problem for your customer as quickly as possible. Then work to over-deliver and make their customer service experience a positive one, no matter the problem.
That could mean sending them a free box, a refund for their current box, an awesome free gift, or just making sure their needs are met as quickly as possible. The more you can over-deliver to correct their problem (within reason), the more likely they are to become a loyal, long-term customer who refers your brand to their peers.
Social Media Customer Service
Social networks like Facebook and Twitter represent excellent platforms from which to run your customer service operation. You may decide to have a dedicated Facebook page or Twitter handle just for customer problems and questions.
How Much Does it Cost to Start a Subscription Box Business?
Startup Costs
Wondering how much it costs to start a subscription box business?
- The minimum startup costs for a subscription box business: $1,763
- The maximum startup costs for a subscription box business: $32,509
- The average startup costs for a subscription box business: $17,211
Here’s a detailed list of subscription box business startup costs:
Software Expenses
Your subscription box business needs software to run efficiently!
Why spend money on software? Because it can help you save time and automate certain parts of the business, so you can focus on the most important matters. Software and technology can help you grow your business, and save you from expensive personnel costs.
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| IT Support | $150 | $2,000 |
| Online data storage | $0 | $299 |
| Payroll Software | $0 | $200 |
| Email marketing tool | $0 | $100 |
| Design Programs & Software | $0 | $50 |
| Accounting & Invoicing Software | $0 | $50 |
| Social Media Management Tools | $0 | $50 |
| Project Management Software | $0 | $25 |
| Internal Communication Tool | $0 | $20 |
Office Space Expenses
It will be your call to determine if you need office space. It is not a requirement but may be necessary as your subscription box business grows.
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| Rent | $500 | $5,750 |
| Utility Costs For Office Space | $200 | $1,150 |
| WiFi & Internet | $50 | $100 |
Equipment & Supply Expenses
Starting a subscription box business may require purchasing some equipment, whether that’s for producing the product or packaging the goods, or equipment needed in the back office.
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| Technology Office Equipment | $500 | $5,000 |
Inventory Expenses
If you sell a physical good, you’ll likely have to start with some inventory.
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| Upfront Costs For Inventory | $300 | $5,000 |
| Inventory Storage | $0 | $5,000 |
| Package Design | $50 | $3,000 |
| Shrinkage | $0 | $1,000 |
| Distribution costs | $0 | $750 |
Website Costs
Every business should have a website, and it’s worth spending a bit of money to set it up right.
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| A Domain Name | $12 | $200 |
| Business Email Hosting Service | $1 | $15 |
Advertising & Marketing Costs
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| Influencer Marketing | $0 | $750 |
| Press | $0 | $500 |
| Facebook & Instagram Ads | $0 | $350 |
| Customer Research & Surveys | $0 | $300 |
| Google Ads | $0 | $300 |
| Affiliate Marketing Commission & Fees | $0 | $250 |
Other Expenses
| Cost | Min Startup Costs | Max Startup Costs |
|---|---|---|
| Credit Card Processing Fees | $0 | $300 |
What is a Subscription Box?
Subscription boxes are a recurring delivery of niche products as part of a marketing strategy and a method of product distribution. Subscription boxes are used by subscription-based eCommerce businesses, referred to as “subcom” for short, which follow a subscription business model.
They target a wide range of customers and cater to a variety of specific needs and interests. It is estimated that there are 400 to 600 different kinds of subscription boxes in the United States alone and more overseas.
Subscriptions vary in both cost and frequency, making them more accessible to a greater range of customers with different socioeconomic backgrounds. Subscription boxes tend to range from $10 to $100.
How Do Subscription Boxes Work?
A subscription box is a package that customers receive by mail on a recurring basis. The products in the box all relate to a specific niche or interest.
The products themselves aren’t the only source of value with these services. There are other reasons that subscription boxes appeal to customers.
Some boxes are focused on the element of surprise, meaning that the customer doesn’t know what they’re getting. Others focus on curation, offering the best versions of products within a specific category. Sometimes savings are the primary goal. Customers receive a selection of goods at a lower price than if they bought each one separately.
With services like Ipsy, subscribers get to try out sample sizes of products before committing. If they decide to buy the full size, there are often brand discounts on the site.
Companies like Dollar Shave Club offer convenience along with curation. Customers receive the same highly-rated products each month, so they don’t have to worry about running out. Many subscription box services offer several of these value propositions at once.
Are Subscription Boxes a Viable Business?
A decade ago, most consumers didn’t know what a subscription box was. There were some early adopters in this market, such as The Sampler, an art-based subscription, which started in 2004. However, the trend really took off when beauty service Birchbox hit the scene in 2011.
Now, there are subscription boxes for everything from vegan meals to scuba gear. Birchbox is still going strong, along with its main competitor, Ipsy. Many entrepreneurs are joining in, hoping for a piece of a market that grew 890 percent between 2014 and 2018.
What Are The Pros And Cons of Subscription Boxes?
Monthly subscription box companies enjoy high retention rates and a predictable income stream. User feedback and referrals are easier to obtain than they are with other businesses. These are just some of the reasons that more than 3500 subscription boxes exist in the U.S. alone.
While some of the initial novelty of these services has worn off, the industry is still booming.
Pros
More Consistent Feedback From Users
With monthly box subscriptions, you have 12 opportunities each year to seek customer feedback.
It’s also relatively easy to encourage subscribers to respond to feedback requests. Many companies offer to tailor future boxes based on feedback. Customers are motivated to give their opinions when they know that doing so will improve future deliveries.
By making it easy to review every box, you can keep customers’ responses coming. Many companies send out an email after each box is received with a link to answer some quick questions.
This might seem obvious, but the key to benefitting from consistent feedback is to actually use it. If a customer has a negative experience with your product, it gives you a chance to improve. Look for patterns so you can continue to learn and increase your product’s value.
By showing subscribers that you value and implement their feedback, you’ll increase loyalty and retention.
Greater Frequency = Higher Likelihood To Refer To Others
If a customer enjoys their subscription each month, they’re likely to tell friends about it. Your offering will be on their mind much more often than with other business models. Even with quarterly subscriptions, the customer is reminded of how much they enjoy your products four times per year.
Consider offering an incentive for referrals. For example, you could give a customer one month free if they refer someone who starts a subscription.
Referrals don’t require an in-person conversation. Today, consumers post about shopping experiences, whether positive or negative, on social media.
You might provide a referral code to someone who has thousands of followers on Instagram. A single post about your service could lead to dozens of new subscriptions. Just make sure your shipping and packaging materials are as photo-worthy as the products.
Lower Retention, Less Need For Lead Gen
Subscription services don’t require as much time or money for retention efforts as other business models. If a customer remains happy with your boxes, they’re unlikely to leave. This is particularly true with customizable subscriptions. By giving a subscriber control over what they receive, you further motivate them to stay with you.
When customers do cancel, if you’ve encouraged feedback, you’ll know why. You can then apply that information to increase retention going forward.
There are two primary reasons that customers cancel a subscription box. The first is that it’s too expensive. The second is that they’re unhappy with the products. Each of these cancellation reasons is reasonably easy to address.
If price is the issue, you can offer a discount or coupon. You can also consider offering differently priced tiers. If the customer didn’t like their products, gather as much feedback as you can, and make changes accordingly.
Higher retention rates also mean that you can spend less time looking for new leads.
Predictability of Subscription Boxes
It’s fairly easy to predict what your costs and revenue will be with a subscription box company. Although you’ll include different products each month, you can estimate what costs to expect.
Shipping and packaging are also consistent, so you know how much to budget for those your box design and other costs. Also, you can calculate how much stock you need based on the number of subscribers.
Once a customer signs up, you know when to expect payment. You can count on a consistent monthly recurring revenue (MRR). While customers may cancel, once your business is up and running, you’ll be able to predict retention rates.
Because of their predictable revenue stream, subscription businesses are attractive to investors. If you end up seeking outside funding, you’ll be able to provide a clear overview of potential profits.
Cons of Subscription Boxes
If you’re thinking about launching a subscription box service, it’s vital to understand the potential downsides. Keep in mind that for each successful box, many others have failed.
The good news is that if you do decide to proceed, you can learn from others’ mistakes. Being aware of the downsides of this model can help you address or avoid them.
High Levels of Competition Across All Niches
A few years ago, the idea of subscription boxes was novel and exciting. There was room in the market for just about any idea someone could imagine. Now, however, many corners of the subscription market are oversaturated.
If you start a beauty box subscription, you won’t just be up against big names like Birchbox, Ipsy, and Sephora. You’ll also be competing with hundreds of smaller offerings. There are already options for more specific niches, such as perfumes or cruelty-free makeup. The potential audience is also smaller for very specific niches.
To stand out from the competition, you’ll need a unique and creative subscription idea. It may be challenging to find such an idea when there are already so many different boxes available. You’ll also need to determine whether your potential product is actually something people want to receive regularly.
Struggling To Maintain Excitement and Novelty
The excitement of receiving new, high quality products in the mail is one of the reasons subscription boxes are so popular. It’s easy to maintain that sense of novelty for the first couple of months. When a customer has been with you for years, though, it’s much harder. Nurturing those long-term relationships is crucial to success for subscription boxes.
Even if a customer isn’t unhappy with their subscription, they may simply get bored. Failing to gather and implement feedback makes this outcome much more likely. Ideally, subscribers will let you know what kinds of items will keep them interested.
There’s a balance between branching out and remembering why people signed up in the first place. If you include new or unique products to keep people hooked, you risk losing loyal subscribers.
Stagnation When Not Tailored To Customer Needs
Customers are more likely to cancel subscriptions that aren’t customized. For business owners, customization requires more time, effort, and money than sending a standard box. It’s more difficult to manage inventory when there are different shipment configurations. You’ll also need to maintain a wider variety of vendor relationships.
If you offer subscription customization, it’s crucial to perform market research and understand the options subscribers want. Also, remember to implement past feedback for future shipments.
Aside from the products themselves, consumers want to be able to personalize their subscriptions. The option to skip a month or two of deliveries can reduce cancellations. However, you’ll need a system in place to keep track of postponed orders and restart shipments on time.
Uncertainty of Income (People Can Cancel!)
Customer churn is a term that refers to the cancellation of subscriptions. Preventing churn is one of the main objectives of any subscription service.
Retaining customers is easier with subscriptions than other businesses, but people can still cancel. Some studies show that one-third of all subscribers cancel within three months. Over half cancel in less than six.
If your profit margin is slim, it can be difficult to recover from a spate of cancellations. Cratejoy, a platform for subscription box companies, recommends a margin of 30 percent. That number may be hard to reach for new businesses.
Still, cost-cutting efforts may backfire. If you include items of lower quality than customers are used to, they’re likely to cancel. Remember, there are several costs involved in this type of business besides the products themselves. You’ll need to account for shipping, packaging, marketing, and more.
How Much Money Can You Make Selling Subscription Boxes?
Though it varies greatly by industry, most subscription boxes have a profit margin of 40-60%. This number can further be increased if you offer one-time purchases or multiple pricing tiers.
The average subscription box price varies by industry but generally ranges between $10-$40 per month. Curated or higher-value boxes may go upward of $100, while some companies also offer the first box for under $10 to incentivize new customers.
Pricing a subscription box is based on a number of factors.
Here’s what you need to consider:
- Total product cost. The most obvious thing to account for is your cost of goods sold. If the price you set doesn’t cover what you spent on production or procurement, you’ll never succeed. This is why many subscription boxes include products with varying values or multiple lower-cost products. You need a firm understanding of the costs associated with all of your products and the margins required to to cover those costs.You also need to account for costs associated with procuring products from outside subscription box suppliers.
- Fulfillment costs. eCommerce fulfillment isn’t cheap, so your pricing will need to cover the cost of custom subscription boxes and eCommerce shipping. Remember, fulfillment costs tend to increase as order volume increases, so you may need to revise pricing models as you grow. These costs are often forgotten by startups, which lands them in hot water when sales start to take off.
- Customer acquisition cost. The final piece of the equation is factoring in how much it costs for you to land and retain a paying customer. These are both valuable eCommerce KPIs to stay on top of. If you spend more attracting customers than you make, you’ll be out of business before you know it. You can combat this by looking at your marketing efforts and associated subscription website costs.
How Many Items Should You Put in a Subscription Box?
There’s no right or wrong amount of subscription box items, but most industry professionals recommend between five and 10 items. This gives your subscribers a valuable amount of products for their money, but not so many items that it’s difficult to use up each month.
The more you consolidate what is in each subscription box, the less your shipping and handling fees will be too. Though it’s tempting to sell more products per box to land higher per-unit prices, this carries over to your expenses.
Aim for a healthy medium of valuable goods that justify a competitive price. You can also ask your subscribers what their favorite items are and optimize your subscription box around these products.
What is The Difference Between a Membership And a Subscription?
In membership business models, customers pay for access to content, services, or features that aren’t available to the public. In subscription business models, customers pay a recurring fee in exchange for physical products or exclusive content of some kind.
On the whole, memberships and subscriptions are quite similar. Their differences consist of what products or services a business sells, how said goods and services are delivered, and how payments are processed. Some memberships offer a lifetime account for a set fee, whereas most charge a monthly or annual fee.
Can I Resell Products in a Subscription Box?
This depends on what products you include in the box and how you use them. As my colleagues note, a person who purchases authentic “branded” items can ordinarily resell those items without violating trademark law. But problems arise when a company purports to create a new product, such as a gift basket, that mixes together several branded products from several different companies.
First, the company that makes the “bundled” product (such as a gift basket), cannot do anything to suggest that the trademark brand owners authorized it to include their products in the “bundled” product, or that such product is formally associated with any of those brand owners.
If the bundled product suggests in any way that it is officially associated with any of the brand owners, this could constitute a form of passing off that could give rise to trademark infringement claims.
A more common problem arises when the owner of one branded product might not want his product to be associated in the same “bundle” with another product that he deems unsavory or inferior.
For example, the brand owner for a famous candy bar that markets itself as a “family product” might not want it included in a gift box that also includes adult-oriented toys or publication–association of a family oriented product with adult-oriented products might be deemed to tarnish the reputation of the brand for the family oriented product.
Trademark owners have the right to object when their products are bundled with other products that might confuse the public or tarnish their reputations.
When combining branded products together, it is important to consider whether one or more of the brand owners might object to the combination—–there are many circumstances in which one brand owner may justifiably object to being associated in a “bundled product” with another brand owner.
In a situation like this, a company that develops and markets “subscription boxes” needs to work closely with IP counsel to minimize the possibility that brand owners will object to the “bundled” product.
Certainly, the safest approach would be to get permission of all brand owners before combining them together. Without such permission, there is always the risk that one or more of the brand owners will sue for trademark infringement.
How Many Subscribers Does The Average Subscription Box Have?
The median number of subscriptions an active subscriber holds is two, but nearly 35 percent have three or more. Male shoppers are more likely than women to have three or more active subscriptions—42 percent versus 28 percent, respectively—suggesting that men particularly value automated purchasing and the ability to limit store trips.
Consumers do not have an inherent love of subscriptions. If anything, the requirement to sign up for a recurring one dampens demand and makes it harder to acquire customers. Rather, they want a great end-to-end experience and are willing to subscribe only where automated purchasing gives them tangible benefits, such as lower costs or increased personalization.
How do I Get my Product Into a Subscription Box?
A subscription box is a promise to deliver items on a set schedule. You need to deliver on that promise, and your products need to be top quality. Otherwise, your subscribers may cancel. Dealing with the churn of constantly bringing on new subscribers is costly. So you need to find high-quality subscription box suppliers that you can rely on to deliver.
The first step is to identify the type of subscription box you want to offer. Will you send everyone the same box each month or give your customers a choice? Are you sending unique subscription box products that you can only source from one supplier? Or could you buy your items from multiple wholesalers?
The next step is to do market research to understand your customer base. This will help you find subscription box products that meet their expectations. It’s important to be clear about what you will offer and who will want to buy it.
Working with your ideal price point and your startup budget, you can move on to identifying the best sources for your subscription box products.
How to get your product into a subscription box
If you make products, getting them into a subscription box is a great way to promote them. You could offer free samples to subscription box companies. Or you might find a good wholesale market by selling subscription box products.
Here are steps to take to promote your goods to subscription box sellers:
- Reach out to subscription box businesses that sell products in your market niche. Find out their requirements for suppliers. Start a conversation.
- Send some free samples to your target companies as a teaser.
- If you have a wholesale web presence, highlight the appeal of your products for subscription boxes.
- Offer dropshipping subscription box services. That lets others market your products for you.
Types of Subscription Box Suppliers
Thanks to the internet, there are an almost infinite number of places to find subscription box products. Here are three main sources.
Wholesalers
Buying wholesale subscription box products is the classic retail business model. This model works well for boxes that give people common supplies they need to replenish, such as makeup or hair care products.
If you sell major brands, you can develop relationships with multiple distributors to make sure your supply chain is uninterrupted. That gives you protection in case one of your subscription box suppliers is backordered.
However, you can buy almost anything wholesale. Do an internet search for wholesalers of the types of products you want to offer.
If you develop a relationship with your subscription box suppliers, you might eventually have them make custom products for you. However, if you want to offer unique products, there is another route to finding subscription box products that may work even better.
Makers
One winning box idea is to surprise your subscribers with different hand-crafted items each month. You could create a local artists subscription box to highlight and promote makers from your region. Or you could curate unusual and interesting products from around the world.
Online platforms like Etsy make it easy to connect with a wide variety of makers.
Another way to find interesting handmade items is to put out the word that you are looking for new subscription box products. Be as specific as possible about what you’re interested in so you can attract the right vendors.
Working with the artists who make the products that go into your boxes can be both rewarding and frustrating. When you buy in quantity, most artisans will give you wholesale or discounted pricing, so you have room for markup. Makers can create custom products found only in your subscription boxes, which could help you win new customers.
At the same time, small businesses may be more susceptible to challenges that lead to delays. If you’re sourcing hand-thrown mugs, you might not have inventory on time if the potter’s kiln breaks or she gets sick.
Retailers
Buying items from retailers and reselling them may sound crazy. However, there are several ways this can work for eCommerce subscription businesses.
If you’re able to get a good price buying at retail, you can still mark up the products you include in your box. If you’ve shopped at Costco, you have seen this in action. Small shops can buy bulk containers of, for example, bags of chips and resell them at a profit. You can also find deals at retail on Alibaba and Amazon.
Selling across borders can also allow you to buy retail and still mark up your products. The retail price for handcrafted placemats in Peru might be low enough to allow you to include them in your box of kitchen essentials.
Another way to profitably purchase products from retailers is to look for closeout sales. Some local retail stores may also be willing to sell to you at wholesale, particularly if they sell their own branded products.
How Long do People Keep Subscriptions?
According to an interview with Andrew Warner of Mixergy, one of the founders of Foodzie (selling monthly tasting boxes of artisan food) said they had average subscription lengths of 6-8 months. That implies a churn rate of around 14% (and a retention rate of 86%).
BarkBox (selling monthly boxes of toys, gifts and treats for dogs) reportedly boasted a 93-95% retention rate in their first year. Taking the midpoint of 94% retention rate, that equates to a 6% monthly churn rate or an average subscription length of around 17 months.
UmbaBox (selling monthly boxes of curated handmade goods) reportedly claimed a retention rate of 90% (churn rate of 10%) a few months after their launch. That’s equivalent to an average subscription length of 10 months.
Why Are Subscription Services so Popular?
Convenience is the main reason why the subscription-based model for goods and services is popular among consumers. The ‘set it and forget it’ mentality that a subscription company offers its customers fits well with the fast-paced information overload culture of the 21st century.
The Dollar Shave Club is perhaps the most notorious business to find multi-million dollar success with the subscription-based model. It was acquired by Unilever in 2016 for a cool $1 billion. As it turns out, people really liked having their razors automatically sent to them.
And Unilever really liked the subscription economy.
But businesses don’t need to turn convert to a subscription company in order to get in on the action. Amazon, though a multi-billion dollar company in itself, uses the subscription pricing model on household items sold through the online marketplace.
Read Also: How to Start an eCommerce Business in 2022
Customers can select a subscription option when ordering high-use items like toilet paper, toothpaste, or dish soap. Capitalizing on the convenience that subscription payments can offer consumers, Amazon has used the subscription-based pricing model to further cement its multi-billion dollar status.
Needless to say, consumers really like convenience, and a subscription-based pricing model is the easiest way to address that.
7 Reasons Your eCommerce Business Should Use Subscription Services
If you’re still not sure whether or not the subscription business model is right for your business, then read through this list of reasons to jump into subscription mode. Your customers and your accountant will thank you.
Reasons to leverage subscription services
- Your customers want subscription services… and they want flexible choices
- Subscriptions are convenient for you and your customers
- You can build loyalty with customer referrals
- Subscriptions create consistent income
- Subscriptions have low customer acquisition costs and increase customer retention
- It’s stupid simple for your customers
- You create emotional connections with your customers
Finally
The opportunities provided by the subscription box industry have certainly caught the eye of many an entrepreneur. However, the question you want to be asking yourself may not be how to start a subscription box, but how to launch a subscription box business from a solid foundation that is poised to deliver predictable growth and long-term success.
The points outlined in this guide will give you a jumpstart to planning and building your subscription box business. It’s up to you to take what you’ve learned here and expand it into a full-scale business plan.
You’re poised for success. Take the motivation that brought you to this article and continue taking the steps necessary to build a successful business.
