Empire builders, we live in the most amazing time ever! Literally anyone can start an online business from scratch without having to invest thousands and thousands of dollars. What’s even more amazing is that there are no limits to how far you can take your eCommerce business, especially with the right strategies—like the subscription box model.
If you’re looking for an absolute game changer to boost your business’s profits overnight, it’s all about one thing: subscriptions, subscriptions, subscriptions! I’ve been saying it for a long time, and I’m still going to be banging on this drum, especially with subscription box services becoming more popular than ever. Let’s explore how subscriptions can deliver phenomenal returns and help you build your empire.
How the Subscription Box Model Makes Dropshipping Much More Profitable
Imagine if you could keep your customers coming back again and again—and even be able to predict how much they’re going to spend. That’s the reality you can enjoy by using the subscription business model; it’s one of the most amazing options for running a dropshipping business.
Instead of making just one individual sale, each purchased subscription is equal to recurring payments. This string of recurring purchases can last for six to eight months or even longer! That’s unprecedented customer loyalty. It’s also a steady income you can use to reinvest in your business or pay yourself a salary. Sounds pretty good, doesn’t it?
If you’re not familiar with subscription box services, here are the basics:
- The customer subscribes to a recurring delivery of physical products, usually monthly.
- The products are typically a curated collection within a specific niche, like cat toys, wellness supplements, snacks, books, beauty products… The sky’s the limit!
- As a dropshipper, you don’t have to worry about the logistics at all. Simply choose the products, direct your supplier to prepare the boxes, and deliver them directly to the consumer.
Choosing the Right Products for a Successful Subscription Service
If you want to make the most of this fantastic business model, it’s essential to understand what customers are looking for in a subscription box. Most people will subscribe to these kinds of services for an average of around six to eight months, which will provide your business with an excellent chunk of change.
But, guess what? They’re not going to stick around for that long if they’re disappointed in the products. So what are they looking for? Customers sign up for a subscription box because they want:
- Convenience: Instead of ordering multiple products from multiple places, they can get a great variety in one box.
- Well-curated products: They want to be surprised and delighted by high-quality products that were handpicked just for them.
- Value: Everybody loves a bargain, so this is definitely one of the main perks of signing up for a subscription service.
- Unboxing experience: Getting a new subscription box in the mail is just like Christmas! Or at least, that’s how it should feel, with aesthetic packaging that’s actually fun to open.
The Right Niche Is the Solution
So, how do you make sure you can tick off all these boxes? It begins by choosing the right niche. Remember that dropshipping is all about building each of your businesses around a popular niche with eager consumers. You can’t please everybody, and it’s a mistake to even try.
Instead, choose a specialty that you’re actually interested in, research it as well as possible, and hone in on those winning products that will really sell, whether it’s fishing gear, scented candles, or gaming accessories. That’s how you provide value and build a loyal client base of subscribers coming back for more.
One of the best resources to help you get some ideas for your subscription service is the website MySubscriptionAddiction, which reviews every single box available out there. Do a search for the niche categories you’re interested in to get a concrete idea of the products already being offered to real consumers.
How to Partner With the Right Suppliers for Your Subscription Box
Dropshippers are always looking for a supplier with a wide range of products. But this factor becomes EXTRA important when you’re taking advantage of the subscription box business model. You need to be able to provide customers with at least six to eight months of unique, interesting products within their niche. That means your supplier should have a large product suite with plenty of options you can mix and match to formulate your boxes.
You guys know I already have a ton of information covering every single aspect of working with suppliers, including how to vet them to find the most trustworthy partner for your business. I love to show you, my students, exactly how to navigate these suppliers, especially which ones to work with and which ones not to.
Some of the most important factors are:
Size of Your Business
If you’re just starting out, you can find great suppliers on AliExpress or CJDropshipping. These are designed for smaller operations. Once you’re ready to level up your business, Alibaba will fulfill those 2,000+ monthly subscription orders.
Variety and Niche
If you’re in the pet niche, make sure the supplier has every possible kind of specialty pet product available! This is what allows you to keep your boxes fresh throughout the whole cycle of the customer’s subscription.
Has the supplier been in business for at least two years (or preferably longer)? What is the vendor’s response rate within 24 hours? If it’s 95% or more, you can feel confident doing business with someone you can communicate with.
Is the supplier the actual manufacturer of these products or just a trading company that’s essentially a reseller? For the best prices, you generally want to work directly with a manufacturer. The supplier’s reviews and trade assurance or trust badge will also be key for helping you find the right partner.
Remember that customers for subscription boxes expect an enjoyable unboxing experience. Many suppliers will work with you to provide the customer with just that. You can use resources like Lumi to create your own beautiful custom packaging and a nice insert card with your branding, which the supplier can use to assemble your boxes.
Making Your Subscription Service Popular and Profitable Long-Term
Are you ready to launch a subscription box that customers love and that generates major income? Here is one final tip that’s absolutely CRUCIAL for implementing a subscription box model. In fact, it can make the difference between just average performance and getting really phenomenal returns with the subscription box model. And it’s this: find the sweet spot for pricing.
If you’re charging the customer $29.99 a month, you don’t want to spend more than $15 on the products plus the shipping costs. You want a nice, high profit margin of 50% or more to make the most of the subscription box model. At the same time, your customer is looking for value when they sign up for a subscription box service. If they can go to the store and buy all the products for the same price, they won’t stay loyal to your service.
That means you have to focus on finding the right product, the right supplier, and the right price to hit that sweet spot for both yourself and the customer. You can also offer them discounts for paying in advance for three to six months, which is a great way to lock in those profits.
Consult With the Pros
When it comes to making the most of dropshipping with the subscription box model, this is just the tip of the iceberg. There’s so much more to learn if you want to create a profitable online business and launch your empire. Dive right in by signing up for my free webinar. Also, check out the Ecommerce Empire Builders YouTube channel for more insights.