Business as one of the investment tools. Business vs investment John Rockefeller once argued with John Rockefeller about what is better - business or investment. If you have little money, you need to do business. If there is no money at all, you need to do business urgently, directly

The subscription model has long been popular with some stores. For example, the famous Dollar Shave Club sells razors in this way. There are many other examples - Japanese Candy or Dutch Waffles, there are even subscription guitar delivery services.

How the subscription model works

A classic online store is a catalog where the client selects the desired goods, pays for them and waits for delivery. He does this every time he wants to buy something.

But there are some products that are bought regularly. For example, socks, razors, diapers, guitar strings, pet food, and so on. The same thing, in the same volume, with the same frequency. In this case, the subscription model works well.

How it works:

1. The client buys a subscription for a long period: six months, a year - for the right to receive goods with delivery "on schedule".
2. Pays immediately for the entire period, all consignments of goods.
3. Receives goods with home delivery with a certain frequency: once a month, once a week, depending on the goods.
4. A subscription product usually costs less than a simple catalog product - the seller negotiates a reduced price with the supplier, making a profit on volume and guaranteed "pay in advance" of a large batch of goods.
5. The buyer receives a good price and regular deliveries of goods, which are also needed with a certain frequency.

Are there certain types of companies that are more suited to this model than others? How can companies use this to increase profits? How are subscription shoppers different from regular shoppers in terms of long-term ROI?

Of course, the subscription model itself is nothing new. We subscribe to newspapers and magazines, TV channels, buy subscriptions to fitness clubs, and so on. But there are more and more products that are sold under this model. And this format is beneficial for both the buyer and the seller.

Customers get their favorite product without leaving home. With employment on the rise, it's no surprise that this sales model is gaining momentum.

The figure below shows the ratio (total profit per customer over his life cycle) for subscription and regular customers (by transactions), a sample of retailers who work with both of these sales models. A value above the green line indicates that the subscription customers of these companies have a higher LTV than regular customers.

LTV ratio for subscription and regular customers

Stores operating with an average basket value of up to $25 have an LTV of 1.78 times higher for "followers". Similarly, stores with an average check of 25-50 and 50-75 dollars have more advantageous positions. Stores that have average check exceeds $75, regular customers have a higher LTV, not subscription customers.

Which industries are leading in subscription sales? These are "food and drink" and "health".

It is expected, since in consumer goods, as well as in medicines and cosmetics, buyers have a need with a certain frequency - the subscription model is ideal for these segments.

Benefits of the subscription model

1. Easier to get higher LTV

In the traditional sales model, the first purchase is only the first step, to turn a customer into a loyal one, the store needs to do a lot of work with loyalty, upsells, repeat sales, remarketing.

The subscription model has a much clearer idea of ​​the cost per customer. All you have to do is calculate the average time that a customer stays a subscriber and you will already know the LTV value (which means you can figure out how much you can afford to spend to get them).

What is more important - despite the fact that the client pays every month, he must make a purchase decision only once. That is, the burden associated with decision-making is automatically removed from the client when selling by subscription.

1. More predictable monthly income and growth

With a higher bounce rate and a clear idea of ​​how long a customer stays with you on average, it becomes easier to predict monthly earnings. You can know exactly how much you can spend on acquiring a new customer to drive sales growth.

1. Easy shipping process

Most subscription stores have only one product, sometimes with multiple "tiers" of subscriptions. This limits the number of packages that must be collected and delivered per month. The delivery process becomes predictable, transportation costs become easy to predict.

1. Selection is kept to a minimum.

The abundance of options has a paralyzing effect on buyers, the subscription model eliminates this problem.

1. Buyers are easy to identify

Usually subscription buyers are a separate segment of the audience, so their behavior is easier to model, and their desires are easier to guess.

Subscription types

There are several main models.

Death Wish Coffee, which sells the strongest coffee beans, had two goals: to scale the business and find ways to keep customers coming back for purchases. Coffee is bought regularly, which is why the subscription model was a good solution - the company soon achieved a 20% increase in revenue through repeat purchases.

With the help of the ReCharge app, energy drink manufacturer 5-hour Energy has managed to achieve an excellent result: today 45% of sales are subscription orders with Shopify. A few months after the subscription launch, the company reported that their subscriber base was growing by about 10% every week.

Surprise in a box. Specific subscription model: a box with individually selected products in a specific category. For example, Birchbox works according to this model - they deliver a box of perfume samples to the client's door every month. The Cratejoy service offers sets of "surprise boxes" of various themes: gifts for moms, books, or even, for example, boxes for fans of the Teenage Mutant Ninja Turtles series. The peculiarity of such a subscription is that the client receives not only goods with delivery, but also pleasant emotions from intrigue.

closed clubs. Subscription is also seen as a way to increase loyalty. Higher status customers get exclusive access to products, content and services.

Content is also a commodity. For example, the Russian online magazine SLON gives access to full versions of articles only to those who have paid a subscription.

Premium service. There are some customers for whom the price does not play an important role, while they do not want to wait for their turn for service, delivery, and so on. Especially for them, stores sell a subscription to a premium service.

Grace period for subscription. There is a different subscription model: the customer buys a “price discount period” during which he can buy goods on the site at a wholesale price. And also pays for storage and shipping. The seller makes a profit not due to the sale of marginal goods, but due to the large flow of customers and the predicted life time value.

The online hypermarket of food and household goods Naturamarket.ca has such a system: the store offers goods by subscription at a reduced price - 25-50% below the market price. This is possible due to large sales volumes and clearly predictable risks. To encourage customers to buy more, the store guarantees free shipping on orders over $75 (as we remember, this is the upper limit when the LTV of subscribers is even higher than the LTV of ordinary buyers).

conclusions

Subscription sales work exceptionally well for those stores whose average check value is less than $75 (in the west, in Russia, the prices are comparable). The most frequently used subscriptions are in the consumer goods and health and beauty segments. But even if your business does not belong to any of them, you have every chance to establish sales by subscription - numerous successful examples confirm this.

As we already mentioned, the contents of the box are usually a mystery to the recipient, but almost all such services tell what was in the boxes in previous months. So you can get a rough idea of ​​the content of the boxes. For almost all subscription packages, there is one more rule: the longer the subscription, the lower the cost of one box.

Cosmetics

The makeup box is perfect for girls who like to try something new. And beauty boxes are also needed when everything seems to be on the shelf in the bathroom, but the soul requires something else, it’s not clear what. Boxes sometimes surprise with beauty novelties that are not yet on the shelves of cosmetic departments or in popular online stores.

Tip for men: a subscription to a beauty box will help you out when you don’t know what to give a girl. Sign it on one or more boxes, and you will be warmly remembered every time you open the next package.

Glambox

The Glambox was previously known as the Allurebox. Each box contains 6-8 cosmetic miniatures. Do not confuse miniatures with sample bags. One miniature package is enough for several applications, so you can taste whether you like this product or not. And these miniatures are convenient to take on trips.

You can also order Glambag - a cosmetic bag with 6-8 full-size mass-market products.

Periodically, the service offers to subscribe to limited boxes, the composition of which is known in advance. I personally ordered a set of Toni&Guy full size hair care products a long time ago. It turned out then very profitable: three times cheaper than in the store.

L'Box

L'Box combines miniatures and full-size products in its boxes. In total, you will receive 5-6 cosmetic products and tips from the beauty guru on how to properly use the contents of the box.

You can also order a L'Box Fashion box with jewelry. In it you will find 5-7 pieces of jewelry and stylist's tips for creating different looks with them.

L’Box also offers limited edition boxes, products for which are selected by popular beauty bloggers. The composition of the "limit" is known in advance.

The cost of a subscription for one month is 850 rubles.

Newbeautybox

You can choose from two subscriptions: a box of luxury cosmetics or lifestyle products (by this we mean the mass market). The subscription price is the same as the number of products, but the lifestyle box contains full-size products, while the deluxe box contains miniatures.

The cost of a subscription for one month is 850 rubles.

Live Organic Box

In the boxes you will find natural and organic cosmetics, natural home cleaning products, food, and even eco-clothing and accessories made from natural materials. Phew, I repeated the word “natural” three times in one sentence, but this is precisely the difference between this box and the previous ones, and the contents of the box are thoroughly known in advance.

The cost of a subscription for one month is 1,690 rubles.

InstaBeauty

In self-care, regularity is the most important thing! So, not without reason, the creators of the InstaBeauty service believe that they deliver eight Asian fabrics to their customers every month - two per week. If after a few tests you have special preferences, you can order a personal set: collect the masks that you like.

The cost of a subscription for one month is 970 rubles.

The box contains four samples of perfume and two samples or one miniature of cosmetics for care. Those boxing products that you like, you can buy on the site.

It is worth clarifying that in the boxes you will not find eau de toilette and perfumes that you are used to seeing on store shelves. I love parfum - selective perfume shop.

The cost of a subscription for one month is 1,490 rubles.

It's not really a subscription box, but a set of flavor samples. Each box contains five samples united by a certain theme: floral aromas, fresh aromas. You can create an individual set by selecting the scents you want to try on the site. The box will appeal to those who like to change perfumes or want to finally find the perfect one for themselves.

Aro-Mania will introduce you to niche perfumes created by individual craftsmen or perfume houses with a rich history. Niche fragrances are fundamentally different from the usual ones. Perhaps this is exactly what you have been looking for.

The cost of one box is 1,990 rubles.

clothing

The variety of clothing boxes is not as wide as cosmetic boxes, but there are still some interesting things.

Soxster

There are no surprises here. It's just that three pairs of fresh socks arrive at your place at the beginning of each month, which, you see, is very convenient. Subscription is issued for six months or a year, you can issue a one-time test subscription. You will not find any particularly fashionable pieces in stripes and ribs here - only calm colors that are suitable for everyday wear. Although women's socks have a slightly more diverse palette: there are yellow, light green, pink and pale blue.

The cost of a subscription for one month is 395 rubles.

Trusbox

The delivery service for women's panties Trusbox has abandoned the model of surprise boxes (it is not yet clear whether it is temporary or permanent), now you can evaluate the contents before ordering. The creators of the service always select unusual models that are not so easy to find in stores.

The cost of one box is 1,699 rubles.

For children and mothers

The birth of the first child is almost always some kind of shock for the parents. During this period, boxes prepared by professionals will come in handy, containing useful things for caring for a baby, toys and amenities for mothers, such as body creams or something tasty. Every month you receive a box corresponding to the child's age.

For older children, you can order play and development kits.

MimiBox

MimiBox can be ordered from the very beginning of pregnancy to fully enjoy your new condition. In the boxes you will find body and hair care products, natural goodies and tea, touching things like a notebook for mom's notes and useful items, like a belt in a car for pregnant women. And after giving birth, you can order two boxes at once: for young mothers and babies. MimiBox has a lot of eco-friendly items, as well as cute little things to decorate the room.

The cost of a subscription for one month is 2,900 rubles.

AistBox

AistBox kits are prepared for children from birth to seven years of age. Boxes are divided into topics. So even though the contents of the box are a surprise, you can choose what your child is most likely to enjoy. Sets for older kids include books, creative toys or party supplies such as pirate themed.

The cost of a subscription for one month is 2,500 rubles.

Foxietravel

Twelve sets of Foxietravel is a trip around the world. With the first set, the child will receive a backpack, a wall map of the world and a compass. And then every month will travel to a new country. Each Foxietravel box contains toys, educational games and exciting tasks.

The cost of a subscription for one month is 1,640 rubles.

MEL Chemistry - kits for safe chemical experiments. Many children are not indifferent to all sorts of experiments. To try to explore the world they didn’t mix anything caustic with household chemicals found at home, direct their curiosity in the right direction. By the way, adults will also be interested in experimenting with MEL Chemistry kits, so this is a great activity for a family evening.

The cost of a subscription for one month is 2,690 rubles.

Beverages

Roasting coffee

Order coffee for home or office. You will regularly try new interesting varieties and enjoy the right fresh roast.

A find for collectors, connoisseurs and beginners who want to try real pu-erh to find out its true taste and properties. The creators of the service promise that you will not get any ordinary tea, such as you can buy in a store. These will be only collector's items, for example, teas, the release of which was timed to coincide with the anniversary of the tea factory or some other significant event.

The cost of a subscription for one month is 3,250 rubles.

winyway

Winyway is a wine delivery service selected for you by a personal sommelier. When ordering the first box, you indicate which wine you like best: white or red. After tasting the drinks from the first box, you share your impressions with your personal sommelier, and the next box will already be compiled taking into account your preferences. Every month you can order one box and not be tormented by the problem of choosing in the store.

The cost of one box varies depending on the contents.

Miscellaneous

EnjoyMe Box - funny little things and gifts

The things that you will find in the box are difficult to combine with any theme. This is a mix of little things that make life more pleasant and joyful, and the house more comfortable. Key holders, lunch boxes, funny figurines for table decoration, pen and phone holders, sets for photo shoots and candles. You can keep something for yourself, and give something to friends and colleagues.

The cost of a subscription for one month is 990 rubles.

Sex-box - box with sex toys

Surprise box Sex-box will appeal to those who are embarrassed to go to a sex shop, and those who have already thoroughly studied the range of all the stores in the city and are eager for new products. When ordering, you need to choose the box package (lite - for beginners, hard - for sophisticated) and type (for a guy, a girl or a couple).

What's in the box? Surprise! But the senders promise that these will definitely be cool and non-standard things, moreover, made in the USA and Germany.

The cost of a subscription for one month is 2,990 rubles.

Surprizbox - an unusual gift

The creators of the service offer to order such a box if you absolutely do not know what to give a guy, girl or friends. Choose the addressee and the cost - that's it, your mission is completed, and the surprise package is on its way. The guys from Surprizbox assure that the value of the surprise in the box will always be greater than or equal to what you paid, and that the content will definitely please the recipient.

You can also order a box of goodies. It will contain not primitive sweets, but sweets from Japan, America and Europe, some liquid Snickers or chewing gum in a tube. In general, you can sometimes please yourself with such a gift.

The cost of one box - from 399 rubles.

BoxBetter - box for self-development

Each box contains a book on self-development or motivation, recommendations from personal growth experts, video trainings, a creative task and pleasant little things like sweets, cosmetics or accessories. On the site, you can find out in advance what topic the next box will be devoted to.

The cost of a subscription for one month is 1,900 rubles.

Shitexpress - surprise box for your enemies

The most non-standard box service completes our selection. The guys deliver the freshest shit all over the world! If you are very angry with someone and dream of revenge, even if not the most exquisite, then you are on Shitexpress. So far, there is only horse manure in the assortment, but the creators of the service promise that it will be possible to choose an animal whose poop you want to deliver to the offender.

The cost of the box is $16.95.

Share with us in the comments your experience of ordering boxes by subscription and tell us what other interesting box services you have come across.

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Subscription Products - How to Start a Million Dollar Business

Have you ever thought that you can subscribe not only to newspapers and magazines?

What can you say about product subscription daily demand as an idea for business? They, these very simple, daily used goods, are no less necessary than spiritual food and we need them all the time.

For several years now, there has been such a project on the bourgeois Internet - BlackSocks.com (literally: "Black Socks"), which sells and delivers black socks for men by subscription.

What's in the salt? Everything is very simple and practical. Men always wear socks, that's a fact. And, of course, they fail regularly. Inevitably, you have to periodically go to the store for new socks. This, of course, takes time. And the site "Black Socks" just positions its services as saving time (according to the creators, their service helps to save 12 hours a year on buying socks).

It accepts annual payment from subscribers for a shipment of 9 pairs of socks and delivers them 3 times 3 pairs of socks throughout the year. Moreover, interestingly, it delivers by ordinary letter (fortunately, the socks fit into a regular envelope) and the recipient does not even need to go to the post office for them - the socks will be in his mailbox.

Funny, original and very practical!

2 years after entering the US market (originally black subscription socks were sent only to Europe), the guys from BlackSocks.com became sell by subscription and other goods - briefs, T-shirts, T-shirts and toiletries for shaving and washing.

In 2009, the company sold $5 million worth of socks and related products this way! Today she has 60,000 sock followers in 74 countries.

What is the secret of success and why are men's products chosen for this kind of business?

Firstly, men, as a rule, are not picky about their underwear (color, style, pattern do not really matter here, and the traditional black color for men's socks is an eternal classic).

Secondly, for single men, such a service is a real salvation (men do not like to go shopping, especially for socks; at the same time, a situation should not be allowed so that at one fine moment it turns out that all the socks are worn out and you have to go to work in holey socks !).

Thirdly, business men, of course, are pleased to realize that they are saving their time.

This method of sale is also good because once attracted a buyer can become a regular customer (after all, he will need socks for the next year), to whom, in addition to socks, you can offer a wide range of other "men's" products.

I cannot say whether such a business in its purest form is able to take root in Russia. But given that we have no less men, and among them there are a lot of busy people who clearly have no time to go to the store for socks, we can offer such a service. I know some men who don't wash their socks at all. They wear them to an unbearable state, and then just buy new ones - so as not to wash them. This is how you can send a new pair every week.

And now the actual idea for a small business.

By and large, such a delivery subscription products can be organized not only via the Internet, but also in your city. After all, every family regularly buys soap, toothpaste, washing powder, toilet paper, dishwashing detergents, etc. in stores. etc.

You can simply conclude agreements with wholesale bases. Collect orders from customers for a year in advance, buy goods in bulk at a discount - and once a week (for example, on Saturdays) deliver the goods to the homes of subscriber customers yourself or using the services of a courier service.

Costs are minimal, no office needed. And people get used to comfort very quickly (in other words, it is enough to simply tie a client to yourself).

Similarly, it is possible to arrange, for example, the delivery of stationery, paper, printer cartridges, not only to ordinary citizens, but also to small firms. After all, the expression "time is money" is true for everyone. Especially for busy and business people.