Want to Start a Subscription Box Company? Here Are the Basics

It seems like there are subscription boxes for everything — from meal preparation and dog toys to razors and novelties for every fan base. Subscription box businesses are going strong, and you might be wondering if this could be the right type of venture for you.

We’ll explore whether a subscription box company might be a good choice, some areas you’ll need to think about and the easiest way to legitimize your business — through an LLC.

Is a Subscription Box Business Right for You?

Before you start a subscription box company, it’s important to understand what you’re getting into. There’s lots of competition out there, and in the early days, profit margins can be thin. That means you need to be confident in your ability to make your business a success before committing significant amounts of money.

What Type of Subscription Box Will You Start?

Subscription boxes exist across most of the sectors you can think of, so how do you know you’ve got a great product? It all starts with validating your subscription box idea.

• Identify your subscription box business’s unique selling points (USPs): You need to have a unique value proposition for your customers. What is it about your subscription box that will help you to stand out and win market share?
• Look at who your competitors are in the space: Understand other businesses that offer substantially similar products, either on a subscription or ad hoc basis. Competition isn’t necessarily bad, but you’ll need to differentiate yourself to be successful. Is this a product that people will want to buy on an ongoing, subscription basis?
• Understand your market: Clearly identify exactly who your subscription box customers are likely to be, where they hang out and how you’re going to reach them. This will be essential to your marketing, communications, sales and customer support.
• Talk to clients: Talk to potential customers to understand what they want from your subscription box products and validate this by asking if they would commit to spending real money on them.
• Test the market: Carry out some low-impact market testing, without spending too much money. Create a minimum viable product and see if you can get people to sign up for your new service so you can start to gauge demand.

Do You Have the Right Skills for a Subscription Box Business?

As an entrepreneur, there are some important skills you’ll need to master if you want to make a success of a subscription box:

• A deep understanding of all the costs associated with your subscription box, so you understand exactly what your expenses are
• Excellent research abilities, so you can find the right products at the right prices for your subscription box
• Good forecasting skills, so you can identify and understand trends and growth
• Powerful marketing skills, so you can write headlines, ad copy, calls to action and copywriting
• Inventory management acumen, so you can ensure you’ve got enough product in stock to meet customer demand

If you don’t have these skills yourself, you’ll need to find professionals who can help you in each of these areas.

What Does a Day in the Life of a Subscription Box Company Owner Look Like?

Here’s what you can expect in an average day:

• Reviewing subscriptions and sales from previous periods to see what products, boxes and marketing are driving your success
• Looking at your current inventory and stock levels and planning for future subscription boxes
• Making orders with your suppliers and arranging for payment
• Calculating profit margins and subscription prices to ensure you can pay all your business expenses
• Dealing with any customer requests or issues
• And much more

Why Do You Need an LLC for Your Subscription Box Business?

We recommend a limited liability company as the best type of business entity for your subscription box business. There are several good reasons to choose an LLC:

• An LLC is fast, easy and simple to set up
• An LLC provides “liability protection,” meaning that it keeps your business and personal assets separate
• An LLC requires you to have distinct business banking and accounting, so it’s easier to manage your business finances
• An LLC is a recognized business type, which gives you more credibility and legitimacy with your suppliers, customers, partners and others

You can create an LLC in just a few minutes with Bizee, and we make it straightforward and quick.

A subscription box business will demand a lot from you, but it can also be very rewarding. If you find the right products, a good audience niche and keep your costs under control, you have the makings of a successful business. Remember to validate your subscription box ideas and test the market, and you’ll create a business you’re proud of.