by I came across this quote, and it inspired me to write this article because it’s very true when it comes to the subscription box industry.
You may be at a point in your business where you are unhappy with the results or revenue you are generating and wish you could make more money and speed up your growth.
If this is you, then this article will help you put things in perspective.
When it comes to this business model, the money is 100% in the execution, and I have said that to people many times over the years.
There are no real barriers to entry, and anybody can set up a subscription box from their bedroom and build a life-changing business over time.
(I know this because we did it at BusterBox, and so did so many other people I know)
That’s what’s so brilliant about it, though. Your background and education don’t make a difference at all, and everybody has the same opportunity to build something great.
If you want to be successful, it all comes down to the execution, and your subscription box idea on its own is simply not enough to get anywhere…
The example I will use is there are many different boxes that are all similar to each other, and if we picked out 3 of them in the beauty niche, it would look something like this.
1. One of them has 20 subscribers, and the owner can’t seem to do anything to push it forward.
2. One of them has 3000 subscribers, is making very good money, and has a great life.
3. The last one has 20,000 subscribers, and the company is generating eight figures and can be sold for a life-changing amount of money.
As you can see, all these businesses have a very different outlook despite having a similar type of box.
Now, this example was obviously made up, but there are so many examples of this across the industry in every niche you can possibly think of (I know because I see and help a lot of these businesses)
The difference between success and failure is normally down to the quality of execution…
Now saying that….
There are things you can do to increase your chances of success and make everything much easier.
And that’s why the quote, “It’s not about how hard you row. It’s about what boat you’re in.” inspired me to write this.
Some business owners put themselves in a situation where everything is way more difficult than it needs to be.
This can happen right from the start when they decide on their niche.
Unfortunately, some niches will be much harder than others to get any kind of positive traction in, and this could be down to multiple reasons.
I will give you an example.
I am in the dog toy and treat niche with BusterBox, which is a very big market, but we currently only ship our boxes to the UK & Ireland.
Ireland is absolutely tiny, and we have never been able to grow past 1000 subscribers over here…
So we had to go to the UK, and that allowed us to grow past 10,000 subscribers…
If we just stayed in Ireland, we would be stuck at a maximum of 1000 subscribers, and our company would be a fraction of its current size.
Now, a similar business to mine in the US would be able to grow way bigger than a UK or Irish-based company just because the US market is way bigger, there are more dogs, and there are more high-quality customers who can afford the box every month.
All of those things make a massive difference in how big and fast you can grow.
I used this example because I am familiar with it from my own business, but I always see it across the industry.
Things like your market size, customer purchasing power and location play a massive part in the potential of your business.
If you get them right from the start, you make everything so much easier on yourself.
Now, I am not saying you need to go with a completely mass-market product that has gigantic competition. There is a lot of money to be made in different niches, but you still need to do your homework and pick something with a high ceiling.
It’s not always a good idea to compare your business to somebody else because they could be playing within completely different rules to you.
You could both be working as hard as each other, but their niche allows them to scale quicker than you.
That may not mean anything other than the fact it will take you a bit longer to get to where you want to go, and you may need to be more tactical on your journey.
Another example great example inspired by “It’s not about how hard you row. It’s about what boat you’re in.” Is Subscription Metrics and Margins.
If you set up a business with terrible margins and a high churn rate, it will always be way more difficult to succeed compared to a business with great margins and a really low churn rate.
When you have a strong margin, you can spend more to acquire a customer, giving you a massive marketing advantage and making your life much easier.
It also means you’re generally more profitable, so you have a better business and quality of life, as it opens up many more opportunities for you.
E.g. You can pay yourself more and also hire staff to support the business as it scales (Giving you and your family more freedom)
If you have a terrible margin, you are always looking over your shoulder when it comes to ad costs, which stops you from really growing and also puts you in a difficult position where you can’t hire any help, and you end up having to do everything yourself or on a very tight budget.
(This is fine at the start, but tell me how fun it is when you are four years in and you are working 15-hour days trying to do every single task yourself)
You can make certain choices, which will make everything so much easier. Please do this.
The exact same thing applies to Churn. If you pick a model which has notoriously high churn, it will be much more difficult to scale up and build a sustainable business. You will reach a point where you hit a subscription treadmill, and the marketing cost to grow any further becomes unsustainable.
That’s why it is smart to do your research at the start and figure out your chances of having a good retention rate with your idea. Can you keep the average person signed up for a bare minimum of 10 months?
Is there any data out there which will back this up?
If you think you can do so, then it’s a good idea to proceed.
If you think it will be a struggle and your retention will probably be terrible, then it’s a good idea to go back to the drawing board and make some adjustments.
It doesn’t always have to be so difficult.
Now, if you have been running your business for a while and you feel like you potentially made things difficult for yourself already, please don’t panic.
There are choices you can make right now, which can help a lot.
Sometimes, these choices are right in front of us, but for whatever reason, we either don’t see them or make excuses about why they won’t work.
I will give you some examples.
If your churn is terrible and you have tried everything you can think of to fix it and it’s still not improving, you may need to take a step back and look at the bigger picture.
I would dig into your data to find out the three main drivers of churn and then come up with a solution for those problems.
I have said this before, but one of our main drivers was dogs destroying toys too quickly. Once we gave our customers the opportunity to upgrade to tougher toys, this lowered our churn overnight.
You deffo have main drivers of churn in your business, and if you can identify them and actually come up with proper solutions, that will make a massive difference.
Alternatively, if you have tried that and aren’t getting any joy, a simple fix might be changing from pre-paid subscriptions to commitment terms, getting rid of your 3-month plan, and replacing it with a 6-month plan.
That is usually a quick fix you can implement to reduce your churn overnight, and if you are on Subbly, you can do this with their commitment term feature.
Likewise, if your margin is a problem in your business, the simplest fix is to raise your prices. Now, you may have some preconceived notions about what people are willing to pay, but unless you have done any kind of price testing, you are probably wrong and leaving a lot of money on the table.
Search this group or my blog for a post I did about price testing, which will help you massively with this.
Or if you have done all of your price testing and can’t go any higher and are still facing margin problems, then maybe it is time you started making plans around cutting out all the middlemen, going directly to the source yourself, and improving the margin that way.
If you have discovered your market or your country is too small to scale to any substantial size that will provide you with a great life, then you need to either change your offering slightly to attract more customers or consider expanding into a bigger country with what you have.
There are always options with these things, but the worst thing you can do is bury your head in the sand and make things intentionally difficult on yourself.
I could list many examples in this business model where people make decisions that make things much more difficult than they need to be, but hopefully, you get the idea of what I mean now.
Remember, if things are hard, there is normally always a way to make things easier for yourself, and sometimes, the difference between success and failure is the ability to do this.
The ones that go far with this business model recognise this and do it.
It’s not about how hard you row. It’s about what boat you’re in.
I hope you got some value from this article; if you have any questions about this or subscription boxes in general, just let me know. Have a great day.
