Subscription Boxes – The Next Big Thing for E-Commerce

Entrepreneurs looking to dive into a relatively fresh type of venture should look towards subscription boxes, which are steadily becoming the next big thing. For those of you who aren’t familiar with the concept, the basic idea is to design a monthly or quarterly box of merchandise based on a theme or niche.

For example, LootCrate are one of the longer established providers of such boxes. Their box theme is designed for gamers and geeks and has a new theme each month. Customers sign up for around £20 a month, and receive at least £30’s worth of t-shirts, comics, mugs and novelty items.

The business behind this is that by fulfilling several thousand orders a month, you can pay bulk pricing for the items you put in your boxes, allowing you and the customer to get a good deal. The work is in picking your box combinations and then sourcing those items. The more subscribers you get the more money you will save when sourcing the items wholesale, but if you don’t sell enough subscriptions then it will be hard to give a good deal in your boxes. Picking a niche you know and that has potential will be vital to succeed.

Crowdfunding would be a suitable way to acquire funding for such a project, as you are likely to find subscribers amongst your donators. This will also allow you to gauge interest better before launch, which will aid your buying judgement and not purchase too much of a product.

Purchasing too much of a product is bad unless you have a lot of working capital, storage and you last long enough as a business to make use of surplus stock. Subscribers will not want the same item in another box again, however, new subscribers often look through previous boxes before signing up, to be sure the sort of stuff they like is selected. By not offering old boxes for sale, some of the items can have an increase in demand after some time. This then allows you to offer it on sale on an online store. This will only work however with items that were from a long time ago, otherwise you’ll lose subscribers to those who only want a few items and don’t mind waiting a little while. Items from popular subscription boxes often end up on eBay, so be sure to check what the item is going for on there before re-selling, and ensure the majority have been sold by other sellers already.

All in all though subscriptions boxes are quickly becoming a ‘thing’ for good reason. Whether it’s a box for entertainment or convenience (heard of the monthly shaving supplies box?), There’s a subscription box out there for everyone already. The market is only going to get bigger, and 2016 is a great time to become a part of it.