Starting a subscription-based business has become a game-changer for new entrepreneurs and established brands. It’s expected that the global subscription box market will grow at a CAGR of 18.4% and may reach $145.82 billion by 2032.
The recurring revenue streams, customer loyalty, and a predictable income model have made subscription services a hot topic in online retail. Pairing the subscription-based model with Shopify, which has amazing features, apps, and integrations to sell products or services, can be a great eCommerce business idea and drive great success!
In this comprehensive guide, we’ll walk you through the key steps and strategies to build a subscription-based business on Shopify.
If you want to start a subscription box business or change your current business model, this blog post will help you.
Let’s start by understanding why the subscription-based model is trending.
Why Is The Subscription-Based Model Trending?
To answer this question, let us understand with an example of Adobe.
A professional photographer who wants to use Adobe Photoshop software must spend approximately $500 – $1000 to use it. However, this large purchase means the photographer owned the Adobe Photoshop software for the next ten years. Very few people could buy this.
To improve their sales, Adobe adopted the subscription-based business model. They found selling Photoshop as a monthly or yearly subscription more beneficial than a one-time payment method.
Let’s now check a few reasons why the subscription-based model is trending.
- Attracts New Customers
The subscription box model makes it easy to attract new customers. It is convenient to ask a shopper to pay only $5 – $20 monthly to use a product or service rather than asking for a lump sum of $500 to $1000. This way, you can still make the same or, in several cases, more profit as long as it keeps your customers happy.
- Offers Predictable Revenue Streams
The subscription-based model is becoming popular because it doesn’t have you to predict sales targets. Yes, you heard it right!
With subscription-based Shopify stores, it is easier to predict monthly unsubscribe rates. You can also evaluate your guaranteed continued subscriber base to learn how much your business earns.
- Elevates The Return On Customer Acquisition Costs
The return on customer acquisition costs is achieved through customer retention within subscription-based businesses.
Subscribers tend to show a higher loyalty level than one-time purchasers. This is because they have already committed to recurring expenses. This loyalty increases the possibility of subscribers staying with the service over time.
Additionally, the subscription model encourages customers to assess the value they receive. This leads them to think twice before canceling. It prolongs their subscription tenure and maximizes the return on the initial acquisition investment.
- Perfect For Brand Loyalty
The subscription-based business model fosters brand loyalty by prioritizing the retention of existing customers.
Regular products or service deliveries keep the subscribers engaged and satisfied.
This consistent interaction builds a strong emotional connection between customers and the brand. It also increases customer lifetime value.
It is a no-brainer why big businesses have migrated to the subscription-based business model.
Let’s now check how you can build a subscription-based business on Shopify.
How To Build A Subscription-Based Business On Shopify?
Shopify offers features like email marketing, subscription management, and 24/7 customer support. This makes it a perfect choice for building a subscription box business. Here are essential steps to build a professional subscription business on Shopify.
- Identify What You Want To Sell
To build a successful subscription-based business on Shopify, it’s crucial to first identify what you want to sell.
It doesn’t matter if it’s curated monthly beauty products or gourmet coffee blends. Having a clear and appealing product offering is the foundation of your venture.
Understanding your target audience’s needs will help tailor your subscription service. This fosters long-term customer loyalty and sustainable growth.
- Create Your Shopify Store
Don’t have an existing e-commerce store? You can easily get started by hiring someone to build a Shopify store specifically for your subscription box and Follow the steps below to create a Shopify Store:
- The first thing you have to do is buy a domain. Bluehost, GoDaddy, Google Domains, etc., are some websites where you can buy one.
- After getting the domain, you have to sign up for Shopify and configure your domain with it. You can choose whether to opt for a paid plan or a free trial. Then, you can set up your domain by clicking on the online store tab at the left of the page.
- Once you start developing your Shopify eCommerce website, select a theme. You can choose from the default theme available on Shopify. You can also get the new theme using integration and plugins.
- Once you have configured the theme of your Shopify store, you can go back to the homepage and personalize it. Enter the information related to your business, like name, logo, etc.
- After personalizing the homepage, you can start creating the product pages. Also, configure your Shopify store with the subscription box management and the app you use for recurring billing.
- Add Subscription and Recurring Billing
Integration with a Shopify subscription box app is necessary to sell subscription boxes.
Select a subscription app or integrate it with a subscription billing tool with an API you could use. Recharge, PayWhirl, and Bold are some popular apps for integration.
- List Out Your Subscriptions Product Catalog
Once the subscription management app or API is integrated, you can see the subscription details of the product on the product pages. This you can find in your Shopify admin portal. These details are available in the subscription section.
- Configure A Payment Gateway
The payment gateway is an important aspect of any Shopify subscription box-based business. The tool that you use must be adaptable to the payment gateway. It offers a seamless experience to your shoppers.
Shopify comes with a default payment gateway, Shopify Payments. You can integrate this or use a third-party payment gateway like Amazon Pay, Apple Pay, and PayPal.
- Draft Your Subscription Rules
To set up a Subscription-Based Business on Shopify, you must set rules. These rules help you personalize your product and service offerings.
These rules can be:
- Product information you need to be available for subscription,
- The frequency of billing for the customers,
- Other information about shipping or discounts.
- Promote Your Shopify Subscription Box Business
To promote your Shopify subscription box business effectively, start by leveraging social media. Create engaging content showing your subscription box’s unique features and benefits across Instagram, Facebook, etc.
Use eye-catching visuals, user-generated content, and influencer partnerships to connect with potential customers.
Run paid advertising campaigns on Google Ads and Facebook Ads to reach a wider audience. Provide exclusive discounts and promotions to incentivize new sign-ups and attract existing subscribers.
You can also implement referral programs to encourage word-of-mouth marketing. This fosters a loyal community around your subscription box services.
Strong social media presence and strategic advertising are key to marketing your Shopify subscription box. Also, crafting enticing offers can attract a broader customer base.
- Manage Your Subscription Business Efficiently
Building a subscription business and marketing does not mean all. You need to manage this business effectively to get success.
Organize inventory and set streamlined shipping processes to ensure fulfillment of subscription orders. Also, process payments using secure and reliable payment gateways to manage cash flow.
Offer world-class customer support. It’s very important to address any issues or inquiries to satisfy subscribers.
Analyze subscription metrics such as churn rate, customer acquisition cost, and lifetime value. It helps in making informed decisions and adjusting strategies for better outcomes.
By focusing on these areas, you can easily run your subscription services.
Additional Tips for Building a Successful Subscription-Based Business on Shopify
Here are some things to consider when building a subscription-based business on Shopify.
- Focus on Customer Retention
In a subscription-based business on Shopify, customer retention is important.
To enhance retention, assure personalized experiences, provide flexible subscription options, and consistently engage customers via regular communication.
Moreover, prioritize exceptional customer service to build trust and loyalty while periodically refreshing your offerings to keep subscribers excited and engaged.
- Offer Multiple Subscription Plans
In a subscription-based business on Shopify, customer retention is important.
Assure personalized experiences by providing flexible subscription options. Engage customers via regular communication to enhance retention.
Refresh your offerings to keep subscribers excited and engaged. Focus on exceptional customer service to build trust and loyalty.
- Provide an Easy Cancellation Option
In a subscription-based business on Shopify, it is important to make cancellation easy. Hence, you should offer a one-click cancellation option within your customer’s account settings.
Ensure that your subscription terms and conditions are transparent and provide flexible subscription plans. Also, maintain responsive customer support to build trust and attract subscribers.
- Use a Subscription Management App
A subscription management app on Shopify helps manage recurring payments and customer subscriptions. This ensures a smooth and organized process for your business and your subscribers.
Focus on providing diverse subscription plans and offering flexible options. Also, understand your target audience’s needs and implement personalized experiences.
- Track Your Subscription Metrics
Use Shopify’s built-in analytics tools to track your subscription metrics. These indicators could be retention rates, revenue trends, and subscriber growth.
Focus on providing flexible subscription options and optimizing the eCommerce user experience. Also, leverage targeted marketing strategies to attract customers.
Conclusion
In conclusion, building a subscription-based business on Shopify can be profitable. It offers a recurring revenue stream and a loyal customer base. A suitable subscription model creating compelling products or services is essential to succeed. Also, implementing effective marketing strategies can be the cherry on the cake.
