by I recently took a look at our sales numbers and saw we have now surpassed $6 million dollars in Subscription Box Sales.
Our revenue is really starting to snowball now and our aim by the end of this year is to be doing at least $500K a month in sales.
The craziest thing is we only started this business a few years ago with barley any money or resources.
That’s what I really love about the internet. The barriers to entry for creating a Successful business have been completely removed.
If this was before the internet it would have been basically impossible for any of us to build our businesses or reach the customers that we can reach.
I think the opportunity has never been bigger for anybody who wants to build a business that can change their life.
I think the opportunity has never been bigger for anybody who wants to build a business that can change their life.
The pandemic accelerated consumers behaviour in regards to online shopping and subscriptions are becoming more and more part of everyday life.
The Subscription Box industry is still at a very early stage and I think everybody in this group has the potential to make the most of that.
I am now going to share 5 things I have learned from $6 million dollars in Subscription Box Sales in the hope it helps other people out.
1. Never assume anything.
One of the most valuable lessons I have learned over the last few years is you should never assume anything when it comes to marketing. The longer you are in your business the more you will understand what your customers want. But truthfully you will never know everything.
It’s very dangerous to assume things without actually testing them and backing up claims with data. I have found this is especially true when it comes to price testing and running different offers.
You may have pulled the price of your box out of thin air or copied a competitor at the start and you could be leaving a lot of money on the table. As you scale up a few dollars in the difference can make a massive difference, so it’s important your charging the maximum amount that you can for your box.
The only way you will ever find out what the maximum amount is by running price tests. You should track your conversion rate, CPA and churn rate with each different test and then decide what price makes the most sense for your business depending on the data.
If you have already done price testing and you have found your ideal price my advice would be to do another test a year later and then keep doing them each year as things can change and you may be able to charge more.
The price for goods, shipping boxes etc is increasing year on year and it’s important your business doesn’t take all of those hits or it could be in trouble. So my advice would be to test your prices regularly and you may end up presently surprised.
The same kind of thinking should be applied to offers. Honestly, you never know what is going to convert until you actually try it. You may have stuff made up in your head about what will convert and what won’t convert and none of it may be true.
Example:
At Christmas we ran a free Christmas outfit offer with the first box. E.G if a customer signed up they would get a Santa outfit for their dog. This performed much better than I ever expected it to. It has now completely opened my eyes to all the different offers we can test in the next 12 months.
2. The Money is in the execution
A lot of the time when a new entrepreneur is getting involved in business they are very paranoid about somebody “robbing their idea” They think that their idea is unbelievable and everybody is going to copy it.
I am afraid, though For the vast majority of businesses ideas really aren’t worth anything at all and all the money is in the execution. This is particularly true for 99% of Subscription Box businesses.
Let me explain to you what I mean.
The barriers to entry for setting up most Subscription Boxes is extremely low. It’s not that difficult to source cardboard boxes and products and set up a website that accepts recurring payments.
What is difficult though is actually making your Subscription Box a success.
That is why you see so many boxes in the exact same niches with much different levels of success.
That is also why if 10 different people all set up the exact same Subscription Box Business they would all have extremely different results.
I have found the two main things that make the biggest difference are
1. Knowledge (This can be learned)
2. The Level of Execution
You need to show up every single day and perform to a high level consistently. If you do this and you are willing to accept and learn what you don’t know you can really push your business far.
Also, if don’t have the skills to do something that is completely fine. There are lots of things that I can’t do.
The main thing is identifying this and then getting somebody in with the skills to do that task.
We have identified 4 key areas you need to do consistently do at a high level if you want to be successful with your Subscription Box Business.
3. 4 Key Areas
These are the 4 key areas that you need to do well if you want to get anywhere. If you don’t think it’s possible to do one of these at a high level then you need to get help from somebody that can.
If even one of these areas are handled poorly in your business, you will not get anywhere.
1. Customer Service
Poor customer service means unhappy customers, a high churn rate and a bad reputation. None of these things will work when you’re scaling a Subscription box business. You need happy customers, low churn and a great reputation, so Subscribers give you good reviews and refer their friends.
2. Marketing
You have to know how to market your product and acquire customers at scale. This is often the missing link for so many Subscription Boxes. They have everything else down to a tee, but they just can’t get customers. I have written so many different articles about how to get customers that will 100% help you. If you are struggling in this area please check them out as this is vital. Not being able to get people signed up isn’t fun at all. There is nothing more frustrating than been stuck at a certain level for months or even years.
3. Sourcing Products
You need to be able to consistently source high quality products at a price that allows your box to make a profit. Customers need to be wowed by your box every single month. If they aren’t, they will cancel and this will drive up your churn rate.
4. Fulfilment
Fulfilment needs to be under control. You need to have a reliable process set up so customers get their boxes on time. This is an area a lot of people don’t think about and then when they start growing it creates big problems as they aren’t prepared.
If you can manage to do these 4 areas at a high level consistently you will do very well with your Subscription Box. If your skill set can’t cover one of these areas, then you should admit that and get help.
4. Graphic Design Is Key.
This might sound crazy, but I honestly think having graphic design skills are one of the most critical parts of this business. We used to do all of our design work in house using different tools and to be honest with you it simply wasn’t good enough for where we needed to go.
Once we got a graphic designer things started changing in the business. Suddenly we were able to improve our conversion rate massively, Sales numbers started going up as the quality of our ads and emails improved.
We can now rapidly test different offers by changing assets on our website and see how they do within a few hours.
One of the biggest problems I see with a lot of Subscription Box owners is they try to handle all the design work themselves and what happens is they have a great product but the website isn’t good enough to convert. Or the ads aren’t designed well enough to generate traffic or they can’t present their offers properly.
My advice would be to find a graphic designer who can help you with all the stuff I just mentioned. They don’t need to work for you full time, but you should have a freelancer, you can go to who can help.
5. Churn is more important than the acquisition as you get bigger.
The higher you go the more you realise that the churn is more important than the acquisition side of things. Once you get to 1000 subs its clear you know how to get customers and at that point, it’s just a case of repeating what got you to 1000 and increasing budgets and doing things better to grow.
At this point you will soon see for yourself that the churn is the most important thing simply for the fact that if your churn is too high at a certain point it will basically be impossible to grow any further.
Example, if your churn is 10% and you have 10,000 subs you need to get 1000 subs a month just to stay where you are.
Now imagine if your churn was 15%? You would have to get 1500 subs at 10000 just to stay where you are. This can get difficult quickly the higher you go.
That is the main reason why churn is so important. You need to have software to monitor it (ChartMogul, Profitwell, Baremetrics etc.) and you need to be working on it all the time.
You should survey everybody who cancels and find out why they are cancelling and then attack the biggest cancellation reasons and fix them. Trust me, if you get control of this early it will make things much easier for you as you grow.
We spent a lot of time last year working on our churn and it’s now in position to allow us to seriously push on and grow further. If we never bothered working on it or improving it. It would have been very difficult to go up much further.
I hope you found this article helpful. These are just 5 things I have learned from us surpassing $6 million in Subscription Box sales. If you have any questions at all please let me know. Have a great day.
