ASLU 058: So You Want to Start A Subscription Box Service
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Have you been thinking that starting a subscription box business might be a great business to get into? After all, they’re everywhere for every niche you can think of: vintage stationery, organic tea, dog toys, Japanese ramen, international snack foods, skin care… you name it, there’s a subscription box for it. So it must be easy, right?
Before you dive in you need to do some research so this week, Deb Wong returns to talk about the ins and outs of running a subscription box business.
If you listened to last week’s episode with Deb where we profiled her as part of our Creative Canadian Women series, then you know that Deb’s first business was the subscription box service The Sugared Teacup where she created boxes that featured teas and artisanal goodies from her hometown of Toronto. In 2019, she put that business to bed and started up Dessert by Deb, which was not a subscription box service and focused entirely on organic dessert teas that she created as well as tea gifts and accessories that she designed. But, since then she has added a subscription box to the mix but under a very different business model than The Sugared Teacup.
In this episode Deb walks us through all the pros, cons and things you need to know before starting a subscription box business or adding a subscription box to your existing business. We talk about finding vendors, sourcing products, figuring out packing and shipping and more!
If you just want the links to the resources mentioned in this episode, scroll down to the bottom.
Listen To the Episode
Here’s a direct link to Episode 58 . You can also listen via the player below or on your favourite podcast app (Apple Podcasts, Spotify, Google Podcasts, Amazon Music, Stitcher, and more). Just search for And She Looked Up!
exposure is not compensation…
before you ask somebody to give you something for free so that you can make money from it, remember how you feel when you’re asked to work for “exposure”.
starting a subscription box service
In this episode we talk about:
not losing sight of the fact that there is something very appealing to get something fun and exciting in the mail. Snail mail is not dead and people do like the element of surprise.
the importance of building relationships (we may have mentioned how important relationships are a few times in the past…)
think about products where there will consistently be new things to showcase and where you can find unique items your customers may not be able to find easily on their own
consider products that ship well: how shelf stable are they? How easy are they to ship? Do they weigh a lot? Are they bulky? Are they breakable? Can they withstand changes in temperature?
Sourcing is the backbone of your box. Will the products be your products that you create - in Deb’s case her new box focuses on her own line of teas and accessories with maybe one or two outsourced products. Or will you box contain items sourced from a wide variety of places, none of which are created by you? This is how Deb’s first business was run. Or will it be a mix? How you choose to stock your boxes will play a big role in how you proceed with your service.
Some ideas for sourcing products that aren’t your own including virtual markets, craft markets, pop up markets, seasonal markets, national or regional gift shows, trade shows, corporate gifting companies or even grocery stores, gift shops, wholesalers, and social media
Sourcing from in person events allows you to build face to face connections with the product makers
the importance of asking for what you want - even if you don’t see it. This can be helpful for finding smaller sizes over full sized products
ask for a bulk or wholesale discount
create a questionnaire for potential vendors that asks for all the information you need to make a decision about featuring a product: cost, sizing, minimum quantities for a discount, lead time, etc
how will you market your boxes? Do you have a plan to get your box in front of people? What makes your box unique from all the other boxes out there? Do you have money to advertise?
Develop your community before your first box is even available for sale. Who is this box for? Find them and talk to them. (more relationships…). Create potential customers.
Figuring out how many boxes you need to start with! And how will you scale as your subscriber rate grows? Will you limit quantities with a cap each month? Or keep it open?
What frequency will your boxes go out? Monthly? Every 2 months? Once a quarter? The cost of your box and the size of it may impact this decision.
How will you handle allergies or dietary restrictions if your box deals with products or food where this could be an issue?
How fast will items in your box be consumed? It will take somebody longer to use up a full bottle of moisturizer than a sample size. Food will be eaten quickly but a candle may take a while to be used. This might impact your box frequency.
Will you box service be your entire business model? Or will it be an additional product you offer?
Do you have the space to create a subscription box service? Space to house the product? Space to do the packaging?
Where will you ship to? Will it just be domestic? In North America? International? What will your shipping costs be for each region?
Will you include shipping in the cost of the box or as an additional charge?
What physical size and weight will your box be each month? What kind of packing materials will you need?
What kind of customer experience will you be offering and how is it unique? Can you create exclusives that are only available in your box?
How are you going to ensure cash flow? Most of your expenses will need to be paid up front before you have any revenue.
Will your box be profitable? What kind of margin will you be able to make?
Don’t expect potential suppliers or vendors to be excited about participating in your box for “exposure”. Don’t build your business on the idea that you will be able to get your product for free.
This is a labour intesive business… will you take on help?
Mentioned In This Episode
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