002: Why Should I Start a Subscription Box?

Hi, welcome back to the Launch Your Box podcast. Today we're talking about why should I start a subscription box. I'm going to break it down for you and probably tell you some things you hadn't even thought about it. So let's get started. Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams. Hey y'all, it's Sarah here, and today we're breaking down the top 5 reasons you should start a subscription box. In that last episode, you heard all the reasons that I started my own subscription box. I did it for 2 main reasons. One, I did it to create the VIP experience for my regular customer, and two, I also did it to create financial stability in what seems like a roller coaster world in our e-commerce industry. It's It's that feast or famine type of world. There's so many different reasons you could start a subscription box. These are my top 5. Let's talk about it. All right. So number 1, subscription boxes, they're trendy, fun, and convenient. So I want you to think about how many boxes do you or your family members subscribe to? Now, research shows that households on average, subscribe to 3 monthly or quarterly subscriptions. And so we can think about that in a lot of different ways. It's not just a trend, it's really the fact that people are subscribing to these. They're fun, they're convenient. So let's think about what items have you subscribed to. Like, I think about, I got my husband, um, Jerky of the Month Club one year for Valentine's Day. Um, I loved the Wax Melt of the Month. We use those little wax melts in the candle melter and And it's creating a convenience for me because I know that I'm going to need the wax melts. I know that I'm going to have to go out and buy them if I don't have a subscription. But when I have a subscription, they're just automatically delivered to me month after month. So then I get to open my drawer, pull out a scent that I like, and I don't ever have to worry about me running out and having to go to the store. And so you can think about this in so many different ways. There's makeup boxes, there's food prep boxes, there's pet boxes, so many different options. But really what you're doing is you're creating a fun experience. It's trendy, it's the newest, hippest, latest, greatest thing, but you're also creating the convenience. And that convenience factor is one of the biggest reasons that people subscribe to boxes. So if you can take something and make it super convenient for your customer, that's ultimately what you want to do. We're busy. We are busier now in our lives than we've ever been before, and people are recognizing the need to do something for themselves, but they're also recognizing the convenience factor. When you have something on subscription, you have something on auto shipment, it's just coming to you. You don't have to think about it. And if we can create a way to eliminate the buffer between running out of something and having to go get something, you're creating a super amazing subscription box for someone. So that kind of ties me into number 2. So number 2 would be it's a great way to grow your niche. Now, what do you mean by niche? And I'm gonna tell you, that's your specific area of expertise. For me, it's my monogram subscription box. The fact that I do personalized boxes, that's the niche that I'm in. There's that old saying that the riches are in the niches, and that's really being known for something specific and really narrowed down. When we try to broaden our ideas and broaden our box and really create something that could be for a lot of people, we really are not doing ourselves a very good service. If we can narrow that down, you're really going to skyrocket your growth because you become known as the go-to person for that niche. And you can look at the billion, billion-dollar box company called the Dollar Shave Club. Have you ever heard of them? It's called the Dollar Shave Club. It is literally just razors. And I want you to listen to this. Just because you can do all the things doesn't mean you should. I'm going to repeat that because I think those of you in the back need to hear it again. Just because you can do all the things doesn't mean that you should. So the billion-dollar company, the Dollar Shave Club, they could do all kinds of things. They could do bathroom items, they could do shampoos, they could do any kind of thing they want to. They have all the resources, all the manpower, all the fulfillment that they need to do anything they want to do. But they have stuck to razors, literally razors, and they deliver it to you super affordable and super convenient way and has really become the known place to get your razors, the Dollar Shave Club. And they exploded, they exploded early on and they just keep growing and growing and growing because they went deep in a very specific area. And they became known for something. So I want you to think about it. My niche is monogramming. I make monogram gifts for women. Can I do more than that? Absolutely. I can do a lot of things, but if I stay focused on that particular area of expertise, I am known for that. It doesn't dilute my message and it becomes crystal clear what I do and what I sell. So if you have a really broad box, I want you to think about how you could narrow that down. So say your box is for moms. Well, what kind of moms? Moms of toddlers, moms of teenagers, stay-at-home moms, work-from-home moms. Like, what kind of moms is your box for? Because just saying that your box is for moms is not gonna make you known for anything. And so that's what I want you to remember when we talk about it's a great way to grow your niche. Now, number 3 of why you should start a subscription box is because it's an easy startup. You don't need an investor to start a subscription box. Now, some companies do, and they choose to go bigger and, and have investors, but we don't need to. You can literally capture pre-sales early on that would pay for what you're going to put in your boxes. A student of mine launched probably a year and a half ago, and she said, you know, Sarah, I don't have the funds to buy all this stuff. I think I'm gonna have like 100 subscribers, and I don't have the funds to buy everything I for 100 boxes. I really want to see if I could pre-sell them, and then in 6 weeks I would ship them. Is that okay to do? It's okay to do. If you can ship them in a shorter time frame, I recommend keeping that to 30 days, but she needed that time frame to get it from her supplier. So she launched a pre-sale campaign letting her customers know. She built her waitlist, they signed up, they got the email, they got a discount for being pre-sale knowing that she was going to make them wait 6 weeks, but she captured all that money up front, was able to buy her products, ship them out, and then next month she just kept building on that, and she was able to then afford it month to month. Now, once you get your sales started going, you're gonna, you're gonna be able to reinvest for the next one and the next one and the next one. And when I say that it's an easy startup, you don't need all the fancy things. You don't need custom packaging in the beginning. You don't, you don't need to pay for all these super fancy things. You build that in as you can afford it. Um, what I prefer you to have a website, absolutely. But if you don't have the funds to have a website built for you, or if you cannot do it yourself, it's not a deal breaker for starting your subscription box. So I want you to know that you don't have to have a bunch of startup money to really start a subscription box. All right, number 4. These last 2 are probably my favorite. Number 4 is recurring revenue. Y'all, there is no better revenue than recurring revenue. I can't even begin to tell you how much this changed my business and my life. Recurring revenue is revenue that hits your bank account every month, same day, same, same time. It just, it's like clockwork. It's going to hit your bank account every single month. And you're building a business where you can build in recurring revenue. You're building a very stable and strong business. A little story is when COVID hit my business, I have a retail brick-and-mortar store. I have an e-commerce store. And when COVID hit our country in 2020, it shut down my retail store for 45 days. Had I not had my recurring revenue, I wouldn't have been able to pay my employees. I wouldn't know if I would have sales from day to day. Like, it literally saved my neck during COVID shutdowns. Because I had this monthly revenue. I could pay all my employees even if they couldn't come to work, even if they sat at home, which they did. I could pay their paychecks because I had this recurring revenue built in. It was hitting my bank account every month. And here's the other thing. I didn't have to show up and sell stuff. I didn't have to show up online and make sales. I already had the sales. I already had the customers. It was just coming out of their accounts. And I didn't have to show up in a time where we were panicked, we were scared, things were uncertain and ask people to buy from me. And that was an amazing feeling. I was able to keep my entire staff for the entire length of time that we were off work. We were able to get our subscription boxes out once we were back into our building. And had I not built in that recurring revenue, things could have gone very different for my business in 2020. And so I want you to think about what recurring revenue could do for your own business. If you had this revenue, could it— could you hire more people? If you feel like you're doing all the things right now and you're like, I could just use one more person, but I don't know if I can pay them a paycheck regularly. If you had recurring revenue, you would know that you would have those funds every single month. Could I buy more equipment? Could I rent a building? Like all these things you could do if you knew you had money coming in to your bank account every single month. And not only do I want you to think about what it could do for your business to have a product like a subscription box where you had monthly revenue you could count on every month, what could it do for your personal life? You know, I think about my own personal life and it created more freedom for me. It created my ability to take more time off because I didn't have to show up every single day to sell something to pay my bills for the month. My subscription boxes paid my bills for the month. So once those were out the door, I could kind of relax the rest of the month. And it wasn't like this rat race, this hamster wheel that I was on every single day in my e-commerce business of having to show up and sell over and over again. I sold it one time and people were staying. They loved it. And so I didn't have to worry about it. And what happened in, oh gosh, 2018, when my subscription box really started to take off and I was really growing. My home had flooded about 8 times and over and over and over again in a period of about 9 months. And it was a nightmare. It was a nightmare for us. And there was really no help. We couldn't get assistance from FEMA. It was a city drainage ditch and the city would not take any responsibility for it. And our— we didn't have flood insurance. We didn't live in a floodplain. So there was no reason for us to have flood insurance. So here our home was being hit with these floods and just as we'd get it cleaned up and fixed back up, it would flood again and it just kept happening. I knew I wanted to get out of that house and I knew that I didn't, I mean, I didn't know if I was going to be able to sell it. And so my concern was how could we go buy another house and we may not be able to sell this house, but you know what happened? I had this recurring revenue and I knew that it covered my bills at the store, it covered everyone's paycheck, and there was extra every month. And I knew that no matter what happened with that house, I could afford two mortgages every month until I either sold it or I rented it or what else needed to happen with it. I knew that every single month this was going to hit my bank account and I could move on. And we were lucky. We sold the house in a matter of weeks, but not knowing if we could, knowing that I could take on two mortgages changed everything for my family. And I want you to think about what recurring revenue could really do for not only your business, but for your personal life as well. Now, the last number 5, number 5 reason, you know, I love recurring revenue, but number 5 might be my all-time favorite, and that's the product is already sold. So let me explain that a little bit. So one of the biggest stressors for any product-based business is that we have this large investment in our products. It's unlike digital products at all. Digital products don't cost us much to, to make, but we have to physically buy our inventory when we sell physical products. And so whenever you're buying products, whether you have a retail, physical retail location or an online store, there's always these questions that come up in your head, like how many should I buy? What if this doesn't Am I going to have to mark this down? Like, there's all these variables that you go through. Something you pick out could be a complete dud, and then you're marking it down 6 weeks later wondering, gosh, I didn't make any money off of that, or I've lost money on that. And the beauty about having a subscription box is that you're buying product that's already sold. So it takes so much of the worry out of your e-commerce business. Because I know I just went to market in Atlanta last month and I bought products not only for my store, but I bought products for my subscription boxes. And I'm buying products for the rest of 2021, so I'm buying 9, 10, 11 months worth of products. But the beauty about the products that I've bought for those subscription boxes is that they are already sold. I already have the subscribers. I'm going to retain my subscribers. I'm going to keep growing, but these items have sold. I don't have to worry and wonder if the trend's going to change, if someone's going to like it or not. It's going in their box. I've made the decision. I've done the best that I can with that decision. Hope my subscribers love it, but I don't have to worry that it's going to sit on my shelf and collect dust because it's already sold. I already have those customers. And I think that that is the most calming and reliable thing that you can do in a product-based business, is know that the inventory that you're buying is really already sold because you have these monthly subscribers. So if you're just starting out, if you're thinking about a subscription box and you're wondering, not only is it fun and exciting for you, but these are real tangible reasons why it makes sense to start a subscription box. Number 1, you're creating convenience for the customer. So that's going to be fun and it's on trend and that's, that's a thing right now. So you need to create convenience. And if you create convenience, It's going to last. Number 2, you're going to grow your niche. You're going to be known for something. You're just going to skyrocket your growth and you're really going to find your sweet spot when you can do that, when you narrow your focus. Number 3, it's an easy startup. You don't have to have all the things done to start a subscription box. You literally can buy product for one box, get it set up online, use some generic packaging for the first few months, and sell it. And once you grow, you get more subscribers, you can continue to uplevel it. I didn't get custom packaging until I had 100 subscribers. I use brown boxes, I stamp them, I use cute tape. Like, you just do what you have to do in the beginning. And so it's an easy startup. Number 3. Number 4, I already told you about my love for recurring revenue. Once you really start generating some revenue with your subscription box, you're going to see how it's going to change everything for your business. And your personal life. And number 5, we just talked about, the product is already sold. You don't have to worry about stacks of dollar bills sitting on your shelves because you bought some dud inventory that no one's buying. You've already sold this. It's going in your box. So I hope that helps you decide to start your subscription box. I'd love for you to join my waitlist. You can find that at launchyourboxwithsarahwilliams.com. SarahWilliamsMarketing.com. Make sure you subscribe to the Launch Your Box podcast. I'd love for you to take a minute to rate and review it. Let me know which episode is your favorite so far. Don't forget to join me next week right here.