How to Create Your Own Subscription-Based Business

  •    Megan is the Chief Editor for’s platinum membership program helps small businesses grow on the web.

The notion of delivering your product or service to customers for a subscription fee isn't new. However, there may be more types of subscription services available now than ever before. Many of them are wildly popular, though some fare better than others. If you want to offer your service or product for a subscription, you'll have a few important considerations first.

Types of Subscriptions and How They Work

Far beyond the Sunday paper and Cheese of the Month Club, you can now get just about any commodity under the sun by subscription. Many digital counterparts of popular newspapers and magazines have subscription paywalls, with only a few articles per month available for free. Health and beauty items you use frequently, such as razors, can be purchased at steep discounts by subscription from retailers like Dollar Shave Club®.

Mega retailers offer discounts for subscription to automatically charge and ship items you use frequently, such as diapers or office supplies, and even offer increased discounts based on the number of subscriptions you have with them. Digital media streaming services charge users a monthly or annual fee for the continued use of the service. Finally, subscription boxes have become wildly popular and feature items like beauty products samples, goodies for pets, jewelry, clothing, and really, just about anything you can think of. ​

How They Succeed

Subscription businesses create a service that is so convenient it requires no effort to continue, but a little effort to cancel. This makes it more likely customers will stay subscribed longer with little chance of cancelling. Typically subscriptions can be billed monthly, quarterly, or annually which allows customers the chance to try something without a long-term commitment or huge price tag. Automatic renewal makes it even easier to retain customers.

Image of Birchbox Subscription Service

Successful subscription-based brands like Birchbox leverage word-of-mouth marketing and social media to gain subscribers. Many offer deals, discounts, or free products, for current subscribers who get friends to sign up. Deals and contests for posting your subscription box loot to social media offer customers yet another incentive for sharing. Some boxes even include marketing materials inside to encourage posting about your products with certain hashtags. All these efforts create very powerful call to action for customers to share their happiness with a subscription service. It's essentially free advertising that turns one repeat subscriber into several.

​Tips For Creating Your Own Subscription

Whether you already operate a business and you want to create a subscription or you're looking to launch a subscription box business, here’s what you need to think about.

  • Start with a subscription theme you feel passionate about. Even if the idea seems wonderful, you'll be hard-pressed to curate new offerings if you're not interested in it after six months, a year, or two years.
  • Create a website with a clean, professional design. Customers won't just hand over their credit card information for recurring charges to a business with a sketchy website.
  • Know your target demographic well. Market to those most interested in the products or services offered. Your theme should "fit" into the current market.
  • Create a business plan. Even though companies like CrateJoy make it easy to create a subscription business, don't be tempted to launch a business on a whim. Do your market research and write a solid plan.
  • Determine how you will provide value for your customers while still creating a profit. Will you buy the items or partner with companies? Will the selections be curated or determined by what companies are willing to give you? Will you offer additional items for purchase each month?
  • Before you begin accepting orders, make sure you have everything you need to keep track of them. A quality eCommerce platform and email marketing tool that integrates with your website can help you build a quality CRM program for your subscription business.
  • Carefully determine pricing. While it may seem smart to keep your price as low as possible, you don't want to price yourself out of offering really excellent products. The value you offer your customers is what will keep them subscribed.

Is It Right for Your Business?

If you already operate a business, it's important to ask whether creating a subscription service will help you create more business. Your loyal customers could be alienated if, for example, you suddenly hide previously free services behind a subscription paywall. Win them over with a new offer, perhaps a subscription box featuring variation of your best selling products.

If you're looking to launch a brand new subscription business, the question of whether it's right for you becomes much more complex.

Once you do the research necessary and write a business plan, you should have a good idea where you stand. Armed with the tips you find here, you'll soon be off to a great start.