026: 5 Ways to Scale Your Subscription Box Business

Do you dream of selling more boxes, being more profitable, and turning the everyday chaos of your subscription box business into a streamlined, manageable business that is scalable and fits into your life? Then you're going to want to listen to this episode.

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 everybody, welcome back. Um, today we're going to talk about scaling your box and 5 ways that you can scale your subscription box. You've spent time, you've built your subscription box business, and you're probably thinking, well, now what? Now what do I have to do? And I just want to take the time to celebrate because if you're sitting here listening right now and you've already started your subscription box, You've launched it, it's out the door. Like, that's the hardest part of this whole thing is getting your box launched and having subscribers. So let's just do the little clap. Let's celebrate. You did it. It's not an easy feat to get off the ground, but I'm very excited that you stepped into this and you're taking this journey. And, and maybe you're sitting here thinking that you started off really great. Things were growing month after month, and now you have hit a plateau. I was there. I was a little over a year in and I hit a plateau. So, I definitely know that feeling. Or maybe you have been growing so quickly that it feels like you can't keep up, like you are exhausted every day just trying to keep up with the growth that you have had. I want you to know that I have been there with that, too. I started a new membership this month. And it really took some soul searching for me. I started a new membership called Scale Your Box. I'm so excited about it. It's really for those members inside Launch Your Box that have hit a certain point in their business where they're ready to scale. They figured out all the entry-level stuff. They figured out the tech, they figured out what they want in their box. They figured out their ideal customer. They're on their way, they launched it. And now maybe they're at 100 subscribers. Subscribers. Maybe they're at 500 subscribers, maybe they're at 1,000 subscribers. And it's, it's about scaling. And it's not about scaling to get tens of thousands of subscribers, but it's about scaling in a way that creates more profitability for you and creates a business that fits with your life. The last thing that you want to do is be running ragged and feel exhausted every day when you are done with work. And that's not why we start businesses. That's not why we start a subscription box. We do it so that we can build stable recurring revenue into our product-based businesses. And there's a way to scale and to scale where everything feels easier, feels manageable, and ultimately more profitable. And so I want to, I want to break that down for you today. When I started working on the material for the new membership, it really became clear to me on what areas that we needed to work on to efficiently scale our subscription box. And so the first one is developing a multi-channel marketing plan. Like gone are the days of simply posting on Facebook and Instagram and welcoming piles of new subscribers every month. Like those days are gone. Those days did exist. They used to, I think back to 2017, 2018, when social media, was, was easy. It's not easy anymore. The expectation of us on social media is a lot. And, and if you don't do these things, you're not seen. And we all know that being seen is how we get sales. And so it's really beyond social media. Yes, you need social media, but I'm talking about ads. You've got to invest in the ads and really setting those up in the right way. How much should you invest? What's a good return on investment here? And so that's something that's really important in your multichannel marketing plan. We've got to make sure we're consistent with emails. Maybe you're, you're working with an influencer. There's so many different channels of marketing. When you are ready to start scaling your box, you need to have a very well-rounded marketing plan. It cannot be just on Facebook. It cannot be just on Instagram. We're talking about Pinterest. We're talking about TikTok. We're talking about multiple platforms. You've got to continue to reach new people to to keep that funnel full. That's the top of your funnel for your whole business. They find you somewhere. Where is the place that they find you? How do they come into your world? And we've got to have this multichannel marketing plan so that people keep seeing us. New people. We don't want the same people seeing us over and over again. We have to keep building in new people to keep that funnel at the top of our marketing chain full of new people. And as they go through our funnel and they go through the processes that we have set up, the automations, then, you know, that number lessens every time they go through a step of that funnel. Ultimately, the end of the funnel is being a subscriber. So we have to make sure that we keep that funnel full and we develop a solid multichannel marketing plan in order to scale our box. The next thing that's really important is optimizing our inventory. I'm talking about sourcing, I'm talking about manufacturing, I'm talking about how much inventory you have sitting on your shelves, how much inventory you have in the manufacturing stage, how much inventory you have ordered. All of that affects your bottom line, and all of that's going to affect how profitable and how much you can scale, because it's not just about having the inventory, but it's about the turn of that inventory. Every time inventory is sitting in your space, maybe it's your warehouse, maybe it's your fulfillment center, maybe it's your home, that is like boxes of cash sitting there. And so in order for our business to be profitable and for us to continue to scale, we have to have funds to buy the next set of inventory and buy that next set of inventory to keep growing our subscription box business. So how do we optimize that? Like, how do we manage that? How do we, how do we source in an effective way? How do we manufacture manufacture in an effective way. We have a lot of buying power. When you're a subscription box owner and you need hundreds, maybe thousands of pieces of stuff for your box every single month, this gives you buying power. It's leverage that you have to negotiate so that you can optimize your inventory. Can you do net terms? Can you have companies hold stuff for you for a certain amount of time so that you pay upon shipping? There are lots of different options that you have, but we've got to put a plan together to optimize your inventory. You want to know exactly what is coming in and when it's going out. And if you have that nailed down, you have that optimized. And so it's really building an inventory plan in a way that you haven't before. That's going to allow you to scale. That's going to give you the cash flow you need to keep buying more inventory, increasing those numbers so you can continue to scale. The next, the next way that you need to be scalable is your fulfillment. And this looks different for different people. And so when I think about fulfillment, for me, we have a warehouse, I have employees, we do a lot of not only subscription boxes but our everyday sales. So it makes sense for us to do that in-house. And people ask me this all the time: Sarah, you have thousands of subscribers, why wouldn't you use a fulfillment center? And here's the thing, we customize every one of these boxes. And so I know the touch points on every one of these boxes is heavy. It's heavy. It's a heavy touch point. And that means that we, there are a lot of variables in this box. And so we've got to make sure that the checks and balances are there. And I'm not comfortable with someone else doing it. I'm just not, I would rather invest in a staff and a building to ensure the quality of my stuff. The variables— we're talking t-shirt sizes, we're talking personalizations— I want to have control over that. And so that's why I choose to do my own fulfillment. If my box was all the same thing, there were no variables, in a heartbeat I would use a fulfillment center. It would just freeze— it frees up everything for you. It frees up your life. You can ship your goods to the fulfillment center, they pack it, they ship it for you. And you're just at home on the couch. Sounds like a dream, right? But for me, there's too many variables, and so I'm not comfortable with that. And the other, the other big piece for me is that I have a lot of local customers. So does it make sense to ship to everyone when 38% of my subscriber base is local to my town? They come in, they pick up from my warehouse, I'm building connections with them, and a lot of times they're buying more things from the warehouse while they're here picking up. So you've got to, you've got to lay out the pros and cons. Is a fulfillment center better for me? Is doing my own packing and shipping better for me? And it depends on what you want. I want to have more control over it. I want to be able to handle the customer service on my end and know that what we're doing is efficient and good. We've nailed this. Like, we've been doing this, we're going on our 5th year now. And so we have a very good process and I don't see any reason for me to use a fulfillment center, but that is a good option for other people. The next way that you need to scale your box is going to be in retention. And here's the thing about retention. We spend so much time getting new subscribers We forget how much time we need to invest in keeping our subscribers. And I want you just to let that sit with you for just a little bit. Getting new subscribers and keeping new subscribers. Is there someone on your team, in your business that is dedicated to keeping your subscribers? That could be your customer service person. That could be you. That could be your assistant. That could be someone needs to be dedicated into taking care of your subscribers so they don't leave. You've already invested. Maybe it was in the ads, maybe it was in whatever freebie or giveaway or bonus that you provided. You've already invested in getting them to become a subscriber. It doesn't take a lot to keep them. And if we remember how important it is to keep them, or even how easy it is to retain someone versus going out and getting a new subscriber, it needs to be high on our priority list. And a lot of times it's not. I want you to think about your retention rate. We'll just say for an example, a 90— you have a 95% retention rate in your business. If you don't know what your retention rate is, I want you to go to the show notes and I want you to grab the link to my retention rate calculator. And I want you to plug your numbers in. I want you to plug in how many subscribers you have, how many cancellations, how many new subscribers you get. It's going to tell you your retention rate and your churn rate. And it's very important to know this number month after month after month. If you have a 95% retention rate, number one, you're doing a heck of a job. So congratulations. But you also, on the flip side, have a 5% churn rate. So that means 5% of your subscriber base leaves every single month. It's not a big number when we're talking 5%, but it's a big number when we're talking about scaling our box. Let's take me for an example. I have 3,000 subscribers. 5% churn rate means that 100— hang on, let me do the math. I don't want to just mess up the math while we're on the podcast. So 3,000 Times 5%. Okay. That means 150 subscribers would be leaving my subscription every single month, every single month. What does it take me to go out and get 150 more subscribers? It's going to take Facebook ads. It's going to take a ton of email marketing. It's going to take a special promotion. So would I be better to focus on retaining these 150 subscribers versus always focusing on the front side of the business and getting more subscribers. So even if I could change this number by 1%, um, that's 30 subscribers. So 1% of 3,000 is 30 subscribers. If I could focus on reducing my churn rate by 1%, that's going to save me 30 subscribers. So I want you to think about that, and I want you to make sure you know this number Grab that spreadsheet if you need it, if you don't know this number, and I want you to sit down and think about how you can improve your retention so that you could get back 1% of what you're churning each month. And then lastly, the, the fifth way that you can scale your subscription box is creating raving fans. And I know you know what I'm talking about if you're a subscription box owner. But I'm talking about those people that just love everything that you do. They're subscribers. They've received box after box after box. They're invested in you. They're invested in your business, and they just love the things that you provide for them, what you're curating for them, and anything else you, you've got to offer. They're grabbing it. Those are your raving fans. You can do this in a lot of different ways. That connection point between you and your customer is huge. So if you're not showing up live, if you're not front-facing in your business, you need to be. That's going to help you create raving fans. Maybe you need to layer in some affiliate marketing, um, and those affiliates are your subscribers. If they love their box, they should be an affiliate for you and you should pay them for bringing more people to you. So you've got to invest in an affiliate marketing plan. Maybe that involves influencers. But creating those raving fans, they're going to tell their friends and they're going to tell their friends. And this is how you can continue to build that funnel that we were talking about. Um, cause you're constantly having those new people come back into the business. So let's just recap 5 ways to scale your subscription box business. Number 1, Creating that multi-channel marketing plan, all the things. You cannot just be in one place. You have to be where people are. So you've got to develop a plan so that it doesn't feel heavy. Two, you gotta optimize inventory. Remember that inventory is cash. You've got to make sure you have a good plan of what's coming in, what's going out, how long it takes how long it's sitting there. Inventory that's sitting there is like cash sitting there. So you've got to make sure that you're turning your inventory, you're optimizing your processes, that you're buying effectively and efficiently, and you're working out terms with your suppliers. Number 3, fulfillment. We've got to streamline our fulfillment processes. Maybe we need a bigger space to work in because what we're doing is completely unproductive and inefficient. Maybe we need to look into having a fulfillment center fulfill our boxes for us. Whatever this is, we've got to streamline it. One, to help with customer service. Two, to help with profitability. And three, to improve your efficiency so that you're not running ragged all the time. Fourth one, which I think is probably one of the most important, is our retention strategies. We've got to improve our churn rate. As little as 1% could make a big difference in the revenue that you're bringing into your, your business every single month. Love on those subscribers. And of course, the fifth one is creating raving fans. They love your stuff. They wouldn't be a subscriber if they didn't love your stuff. So how can you help them help you by setting up an affiliate program, reaching out to influencers, just showing up and loving on your people is going to go a long way in scaling your own subscription box. 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.