Planning to start your own Shopify subscription business? Knowing where to start can be overwhelming. The market is highly competitive, and customers are becoming more discerning when selecting their preferred subscription service. That is why having a good strategy, the right platform, and reliable tools are essential for success. Shopify is one of the most popular eCommerce platforms in the world and has the features required for running a successful subscription business.

This guide will help you create a subscription business that can stand out and offer customers the best value. From understanding the fundamentals of subscription businesses to setting up your Shopify store and launching a successful subscription service, this guide covers everything, you need to know to start a successful business on Shopify. Let’s dive right in!

What Is A Subscription Business? 

A subscription business is an eCommerce model that allows customers to purchase products or services regularly. This type of business has become increasingly popular in recent years, as it offers convenience and value to consumers. Subscription businesses are not limited to just physical goods. They can also include digital products, such as software and streaming services.

  • For entrepreneurs, subscription businesses offer an attractive business model. Because customers come back each month or year to buy the same thing, it gives you more predictability and stability for your income with recurring payments.
  • Loyal customers stay with a company longer, which helps drive higher customer lifetime value (CLV) for subscription apps.
  • Loyalty programs can also benefit subscription apps, encouraging customers to return each month. It’s important to note that setting up a loyalty program requires careful planning and attention to detail, so you should research and understand the best way to structure one before implementing it.
  • Furthermore, subscription businesses tend to have higher average order values (AOVs) than regular eCommerce stores since customers usually purchase larger orders to get more value out of the subscription. It allows you to generate more revenue and invest in other business areas, such as marketing and product development.
what actually is a subscription based business model

Choosing The Right Subscription Business Models

Before selling subscriptions, it’s important to consider the model that best suits your company. There are three main subscription models: curation, replenishment, and access.

1. Curation Subscription Model

The curation subscription model is the most popular, particularly among eCommerce businesses. This model involves sending monthly boxes of curated goods to your subscribers, tailored to their interests. For example, suppose you’re selling health and wellness products. In that case, you can create a monthly subscription box that contains items from different product categories, such as vitamins, supplements, snacks, and fitness equipment.

The benefits include:

  • High-Profit Potential: For businesses that offer recurring products, curation subscription boxes can be a great way to generate profits.
  • Convenience for Customers: The subscription products box makes it easy for customers to receive the products they need without having to go out and search for them every month.

The downsides are:

  • High Churn: Since customers receive different items each month, the churn rate can be very high, but there will also be an increase in customer acquisition costs.
  • Low Average Order Value: Since subscription boxes typically contain various items, the average order value is usually much lower than for traditional eCommerce stores.
  • Operational Complexity: The cost of packing and shipping subscription boxes can be high, making it difficult to profit.

2. Replenishment Subscription Model

For the business model, the focus is on providing convenience and cost savings to consumers. It allows them to automate their purchase of essential goods, often at a discounted rate. When choosing which products to offer through this model, it’s important to consider items regularly needed, such as razors, diapers, vitamins, and pet food.

The benefits include:

  • Cost Savings for Customers: By offering discounted rates on recurring purchases, customers can save money in the long term on a subscription product.
  • Predictable Revenue Stream: Since customers sign up for a recurring service, businesses can count on a reliable monthly revenue stream.
  • High Conversion: For customers that need the product, it can be a no-brainer decision to sign up for the subscription service from an online store.

The downsides are:

  • Low Customer Engagement: Customers may not interact with the business unless they need to switch or cancel their subscriptions.
  • Thin Margins: Products sold through this model often face stiff competition, resulting in thin margins for businesses.

3. Access Subscription Model

An access subscription model is a great option for businesses offering exclusive content or services to their customers. This could include anything from streaming music and videos to online courses and tools. By offering these products as part of a subscription, businesses can ensure that customers pay a regular fee for access.

The benefits include:

  • Bundling Opportunities: Subscription services can provide customers with access to a wide range of products and services, increasing the value proposition for users.
  • Higher Average Order Value: Customers subscribing to access subscription plans often pay a premium for the bundled offering, resulting in higher average order values than other models.

The downsides are:

  • More Time Investment: Compared to other business models, access subscriptions require more time and effort on the part of the business.
  • Ongoing Content Creation: To keep customers engaged over time, businesses must continually create new content for their subscription plans.

When choosing the right subscription model for your business, it’s important to consider all the factors involved. By evaluating the benefits and downsides of each option, you can make an informed decision that will help you maximize your profits while providing value to customers. With a little research and planning, you can adopt a subscription business model that works for your specific needs.

what are the crucial steps to take to prepare subscription based Shopify store model

Steps To Start A Subscription Business On Shopify 

After selecting the right subscription model, it is time to start building your Shopify store. Here are the five steps you must take to establish and launch your subscription business:

1. Choose Your Subscription Idea

To succeed with a subscription business, you must be passionate about your offering. Research potential products or services, then determine how they fit into a subscription model. Once you’ve settled on an idea, do market research to ensure your offering can be competitive.

An example of this research can include segmenting target customers by age, income level, and location. This will help you identify their buying habits and needs so that you can craft a subscription product or service that meets these requirements. Also, look into competitors in the space to gauge their offerings and pricing.

2. Select Your Subscription Products

Once you’ve researched and identified customers, it’s time to choose what items or services will be part of your subscription offering. Consider the types of products people want to use over time, like food and beverage items, vitamins, skincare items, or educational materials. Also, convenience factor — what products can be delivered regularly to customers’ doorsteps?

Depending on the model you choose, different types of products may work better for you. For example, a subscription box model could feature items related to your theme each month. Also, consider what types of products will be more profitable and help you stand out from others in the same market.

3. Price Your Subscription Options

When choosing a subscription model, you must consider how much to charge for each option. Pricing should reflect your cost structure and your competition’s pricing so that you can remain competitive while still making a profit.

For example, if you offer monthly subscription boxes, you may want multiple pricing tiers that provide different products and services. This way, customers can choose the level of subscription that best meets their needs and budget. Also, consider adding discounts or incentives for customers who sign up for longer-term subscriptions.

4. Build Your Website

Now that you have chosen your products and pricing, it’s time to build a website to showcase your subscription offerings. With Shopify, you can create a professional website quickly and easily with its user-friendly interface. You can also get help from Shopify-partnered agencies like Blue Owl for customized solutions.

Once your website is built, start adding content like descriptions of each subscription option and FAQs to give customers a better understanding of your offer. You can also use visuals like images or videos to show off your products in action.

You can also incorporate sub-pages for each type of product or service to make it easy for customers to find the exact subscription they want.

5. Market Your New Subscription Business

Once your website is up and running, it’s time to start spreading the word about your new business. Consider using digital and traditional marketing techniques to reach the right audience.

Digital marketing includes tactics like SEO, email campaigns, and social media ads, while traditional strategies involve print or radio advertisements. You can also consider partnering with influencers in your target market to generate word-of-mouth promotion for your subscription business.

what is neccessary to make shopify subscription business successful

Tips To Make Your Subscription Business Successful

Once you’re ready to launch, several tips can help you make your subscription business a success.

1. Excellent Customer Experience

Start off with a great customer experience from the get-go. Make sure customers quickly understand how the subscription works and what benefits they will receive for signing up. Setting expectations is key. Be clear about the value of your product or service and how it can help the customer.

2. Streamline The Enrollment Process

Make sure the enrollment process is as simple as possible so that customers can sign up quickly with minimal effort. Make sure to include a way for customers to modify their subscription preferences at any time easily using Shopify store features. Also, the payment gateway should be simple to use and secure for online subscriptions.

3. Engage Your Customers

Engaging with your customers is key to running a successful subscription business. This can be done through email, social media, or even in-person events for local customers. People like to feel appreciated, so ensure you regularly engage with your customers and respond to their questions and comments.

4. Adapt To Customer Needs

It’s important to adapt your business model to customer needs. Ask for feedback regularly, and use data-driven insights to tailor your product or service for the best customer experience possible. This will help you stay ahead of the competition and ensure that customers remain loyal to your subscription for a long time.

5. Prioritize Retention Strategies

For a successful subscription business, customer retention is key. This means having strategies in place to ensure customers stay subscribed for longer. Look into loyalty programs, referral incentives, and other ways to reward customers for their continued patronage. You should also focus on reducing the churn rate by offering discounts or free trials if they renew early or extend their subscription.

6. Monitor Churn

To get the most out of your subscription business, it’s important to keep track of customer churn rates. Keep track of who is unsubscribing and when so that you can pinpoint any issues quickly and make necessary changes. Keeping an eye on this metric will allow you to spot trends early and adjust your strategy accordingly.

7. Utilize Automation

Automation can help optimize your processes, save time and energy, and make running a subscription business much easier. Invest in automation software that can help you automate customer onboarding, billing, payments, customer support, etc. This will enable you to focus on other aspects of the business without worrying about tedious tasks.

8. Be Data Driven

Data can be a powerful tool for making decisions and improving your subscription business. Utilize data to gain insights into customer behavior, trends, and preferences. This will help you make better decisions about pricing, offerings, marketing strategies, etc.

Incorporate Shopify Store Subscriptions With Blue Owl

Being a Shopify-Partnered agency, Blue Owl provides the most comprehensive solution for subscription businesses. From creating your Shopify store to designing it and creating a subscription-based checkout page for customers to setting up automated billing, we have you covered.

Setting up your store with subscriptions is easy and quick using our help, allowing you to start selling and managing recurring payments. Our experts have the technical know-how to ensure a smooth and hassle-free transition to subscription-based sales.

On top of that, we even provide marketing services such as creating promotional campaigns and optimizing them for search engine visibility. This will ensure potential customers can easily find your Shopify store, helping you reach out to more people within your target audience.

So, don’t wait any longer, and get in touch with us to start your subscription business today. Our team of specialists is here to help you make it happen!

Looking for a valuable partner?

stop waiting, contact us today!

contact us