The UK subscription box market is growing at an exponentially fast rate and is forecasted to £1.8bn by 2025. It’s popular with both consumers as a delightful shopping experience, and businesses as a profitable business model.⁠

So how do you create a subscription box business? I asked Moira Fuller business coach and guest of Episode 1 of my podcast Start, Scale Succeed  to share her top tips.  Moira is a former subscription box founder and she shares everything you need to know to set up and scale your own subscription box business.

What is the first thing you need to do to create a subscription box business?

Firstly you need to work out what type of model you will do. There are 2 models, replenishment and curation.

1 – Replenishment

These are things you want that you will use on an ongoing basis, e.g. Hello Fresh food subscription boxes, a shaving subscription box, Something that you would buy regularly, that is getting replenished into your house.

2 – Curation

Curation means selecting a range of especially chosen products to generate delight when they arrive on the doorstep. This is often the most successful type of box

Curation boxes can go wrong if it is just a random bunch of stuff put together, with no hook or theme, it needs to make sense for the customer. Niche down. A general pamper box for women is too general and may not resonate. Instead look at creating a niche item like a spiritual box that delivers things like crystals and oracle cards every month is, for a very specific target market.

Developing your subscription box idea

Work out what your customers want, and how to deliver this. For instance you may make gorgeous hand sewn leather purses, but that’s not a subscription model, as people aren’t going to buy new ones on a regular basis. However people buy things like body care and stationery all the time if they love them. What is something people want to buy regularly? 

Consider your time frame. It doesn’t have to be a monthly subscription, it could be quarterly. 

At this stage it’s crucial to do your customer research or discovery to find out what people want.

How to do your customer discovery

Ask at least 50 people to fill in a questionnaire that is quick to fill in, with maybe 1 or 2 open questions where they might put in a little more detail.

Then do some deep dive questions. For instance I tapped into the crafting community. I spoke to a local knitting club and found out that members who loved knitting were not interested in trying other crafts. That really helped me find my audience for Craftiosity.

You’re aiming to test your hypothesis of what you think people want:

  • The price point
  • why are they buying it
  • What they want to get out of it
  • What do they want to see in it 
  • How frequently they would like to receive it

It’s also a good idea to add to the end of these questionnaires an option that if we go ahead and launch this, and you would like to know, please enter your email address. This is a powerful way to immediately start with a semi warm audience who are a good match with your subscription box before you go live.

Get Creative

Use your creative energy to think about how you want to delight your customers. How do you create the theatre of the unboxing – the tissue paper, the first piece you see when you open it. There is an element of performance – be playful with this. 

How can you add little touches that make it a bit more special. For instance with the Bloom & Wild flower subscription box, the flowers arrive in brown paper wrapped in a beautiful pink grosgrain ribbon with a sticker over it saying ‘your flowers are sleeping’. It’s those little touches.

Practical considerations
  • You will need to find suppliers for your boxes, packaging, and stuff that will stay largely consistent month to month.
  • You will also need to find suppliers for content, perhaps collaborations to tie in with any of your own products that you are including.
  • Think through your customer journey. How are they buying? How do you set up recurring payments? How will you fulfil the orders?

Pricing & margins for a subscription box business

Price points

£25-30 is the average price point for adult subscription boxes. A few like Stitch Fix, where a stylist selects clothes for you, that can be £100 plus. Children’s subscription boxes tend to have a lower price point of £15-20.

One of the advantages of the subscription box model is you are selling directly to the customer. If you are selling retail or wholesale you have to build that into your profit margins.

Aim for 50% as your gross profit

This is what you are selling it for after the costs of the packaging, the contents, the postage and paying someone to pack your boxes. If you’re not already there you will get there in terms of having a fulfilment centre or bringing in freelancers. It may take a little while to get here because when you start out as your subscriber numbers are lower. It takes time to build the numbers to the level where you can place orders orders at wholesale rates to make the equation work.

The profitability is pretty high for a product based business.

In order to get a 6 figure business with a box retailing at £25 you only need to have 333 subscribers. We’re not talking crazy numbers, and it is completely viable if you’ve nailed the customer delight element.

Things to bear in mind
  • The recurring nature of the subscription box mode means that  most people who buy a box are in for 3-6 months. That’s the average length of subscriptions. Some will just be in and out for a month, some are in it for 20 plus boxes because they absolutely adore what you do. 
  • It is seasonal throughout the year, subscription boxes, like e:commerce, are usually busier in the winter months leading up to Christmas, and quieter in summer months. 

Top tips for scaling your subscription box business

1 Outsource your fulfilment / packing boxes as soon as possible

People will start to get a bit of success, and then they are spending 3 days packing boxes, where that’s not the zone of genius, and they could be doing other things to grow their business. Look at using fulfilment centres, with interim steps such family and friends help you pack, or local freelancer. It is best get the boxes and products out of your houses as soon as possible, and free up your dining table!

2 Hire A VA

You need to stay in your genius zone, not doing things like replying to customer enquiries. Look at hiring a VA to support you with tasks that drain your energy.

3 Focused Marketing

Focus on 1-2 channels where you customers are hanging out, and get really good at marketing on these rather than trying to cover all the bases

Email marketing is crucial. With social media you are on someone else’s real estate, and always at the risk of losing your account. Plus only 10% of your posts get seen by your audience. With newsletters you know it is going to everyone’s inbox, and then it is their choice whether they open it. 

4 Work On Your Mindset

Look at your money mindset. Often people will get to a certain level of success and then have fear of pushing through that income turnover or boundary, because of mindset issues. 

How to keep growing the audience for your subscription box business

Often when we talk about growth we are thinking about how to find new customers and bring them into the top of your marketing funnel.

In fact people see most success when they look at their conversion rate. What is the conversion rate on your website? Look at setting up email automation so that when someone comes into your world, are they automatically welcomed into your community

Look at your retention rates. Can you keep people as a subscriber for an extra month or two because they love what you are doing?

You want to get your customers to a point where the subscription box is part of their life, and it’s a no-brainer for them to get the box every month. 

Thank you so much to Moira for sharing how to create a subscription box business. You can listen to the full podcast here.

I hope that this post helps you to continue on your journey to success and if you need any extra support then check out my free resources on my website, follow me on Instagram, subscribe to my monthly newsletter or get in touch at Book a free discovery call to see how we can work together and how I can help you with your business or idea Book a power hour with and get the clarity of what your next steps need to be and your questions answered.