How the Subscription Box Model Can Deliver HUGE Profits in 2023

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 

Screen grab of Peter Pru explaining how to find the right supplier for the subscription box model

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.

Vetting

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.

Services Offered

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

Shopper unboxing his newest subscription box

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

Screen grab of Peter Pru discussing how to find ideas for subscription boxes

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. Tagged : / /

Top 4 Hacks to See Instant Dropshipping Profits

Whether you’re experiencing success with your dropshipping business or currently struggling to get it off the ground, there are certain strategies you can use to see the instant dropshipping profits you want. Based on the success one of our clients experienced, we can show you some specific dropshipping hacks to supercharge your business and maximize profitability. Here we’ll review these hacks and how you can use them to make more money soon after implementation.

1. Optimizing Opt-in and Conversion Rates

The very first metric we want to see on someone’s sales funnel is a strong opt-in rate. If people aren’t opting in and providing email addresses and other information, then they aren’t going to make a purchase. Even if people are buying, it will be at a significantly lower rate than it should be. 

Our client had a two-step order form through Clickfunnels and saw an impressive 60% opt-in rate. This is rare to see. While we don’t recommend you try to reach this number from the start with your business, it is possible to get there with enough time and effort, as this client proved. With our team of experienced professionals and plenty of tweaking, we were able to help our client reach this level, and you can, too.

In addition to a stellar opt-in rate, our client had an equally impressive 11.74% conversion rate. This is incredible compared to the average Shopify store, which sees a conversion rate of around one percent. 

Together, these opt-in and conversion rates tell us that there’s nothing wrong with the client’s opt-in and landing pages.

2. Understand the Difference Between Maximizing Profits and Leads

Peter Pru discussing the importance of time and proper expectations when building a store

One point we want to emphasize here at Ecommerce Empire Builders is that you need to know the difference between maximizing profits and getting people into your sales funnel. You need to have a combination of both profits and leads. 

To see instant dropshipping profits, you should have a set of profit maximizers at the ready to help you increase your average cart value. This entails creating maximizers such as:

  • Upsells
  • Order bumps
  • Subscriptions

When it came to upsells, our client saw an insanely high conversion rate of 16.28% for the first upsell. The second upsell didn’t slow things down, either, with an even higher 16.39% conversion rate. 

Regarding subscriptions — we’re talking about services such as Netflix, Dollar Shave Club, and others that charge customers on a monthly basis. If you’re not using subscriptions for your business, we recommend you integrate one as soon as possible. They generate recurring revenue. Our client uses subscriptions to essentially receive free money consistently, without putting in extra work to see that steady passive income. 

3. Optimize for Specific Conversion Rates

Peter Pru emphasizing how important order bumps are to creating instant dropshipping profits

It may surprise you to hear it, but we believe these numbers our client is seeing are simply too high. For most businesses, these numbers are excellent, particularly to start with when going into dropshipping. The reason we see these figures as too high here is that, ultimately, your goal is to maximize profits as a business owner. Even if things seem to be going extremely well, there are always ways to further improve and increase income.

Target 10-15% Conversion Rates for Upsells

We’re blown away by our client’s 16+% upsell conversion rates. But we’ve found that the ideal conversion rate falls at around 10 to 15%. It all depends on the structure of the funnel. Maybe your upsells consist of more of the same thing, or a premium-priced product is included with a purchase. 

These extraordinarily high conversion rates could indicate that these upsells are too good of a deal for people to pass up, leading them to jump on them more frequently. In this case, we’d recommend raising the price on upsells to lower those conversions to the 10-15% range while further maximizing instant dropshipping profits.

Aim for 10% Conversion Rates for Initial Sales

We also recommended that our client raise the price of the main product to bring that 11.74% conversion rate down to the sweet spot of around 10%. Again, this may seem strange advice to hear, but the fact is that if you’re willing to lose more money to attract more people to your business, you will wind up seeing more profits. Many business owners just starting out may not want to hear that, but it’s an important lesson to learn.

If you’re seeing high conversion rates (and you’re happy with your income), you can keep things the way they are. However, if you’re disappointed with your profits, you can raise them while slightly reducing those conversion rates. 

A company like Dollar Shave Club excels because while they lose money when the first subscriber comes in, they make all of those losses back because of the longevity of monthly subscriptions they maintain.

Try to Reach 18-20% Conversion Rates for Order Bumps

When looking at our client’s conversion rate for an order bump, we saw a 14.20% conversion rate that was excellent. Generally, we recommend targeting an order bump rate of around the 18% to 20% range. Order bumps are pre-purchase upsells that customers are likely to add to their cart without much thought. These could include add-ons and other minor purchases that enhance that main purchase before buying.

Unfortunately, many businesses lose a considerable amount of money because they neglect to use an order bump.

4. Knowing What Offers to Consider to See Instant Dropshipping Profits

If you’re unsure what you should be offering your customers, whether it’s a deep discount or another offer, here are some of the different routes you can take.

A “Free Plus Shipping” Offer

In many cases, you’re often better off making a “free plus shipping” offer. These offers are typically safe to go with. But keep in mind that a properly built back-end is vital to get the most from this offer. This is because this offer causes a slight loss of income on the initial sale. But you can make up for that with upsells and other profit maximizers. 

A Deep Discount Offer

Deep discount offers are ideal if you’re using Facebook ads. The platform may not accept ads that make “free plus shipping” offers. In fact, we tend to use deep discount offers for our clients in lieu of “free plus shipping” because it’s usually the safer option of the two. For Facebook ads, we suggest you use video ads that maximize engagement. You can also use image ads that can supplement those video ads.

Work With the Pros to Get the Most From Your Store

Dropshipper reorganizing their sales funnel for instant dropshipping profits

All of these hacks can help you successfully launch your business and see instant dropshipping profits. But it’s increasingly tough to go it alone. There’s so much to consider when optimizing your dropshipping business, from finding the right niche and developing opt-in pages to preparing and launching ad campaigns. If you want to make sure you have the chance at instant dropshipping profits in this highly competitive industry, you’re likely to benefit from working with a team of experienced professionals. At Ecommerce Empire Builders, we have the combined resources and expertise needed to fuel your business’s long-term success.

To learn more about how you can use the power of sales funnels to grow your online business and find out how we can help, attend our free eCommerce masterclass. We’ll show you the steps you need to take to see the conversions and profits you’ve always wanted. You can also subscribe to my YouTube channel for more insights and business strategies. Tagged : / / / / /