Subscription Business Model? How To Create It For Your Ecommerce Business

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    Subscription based ecommerce is an increasingly popular trend. In the coming year, businesses across all industries must look at how this unique form of commerce could increase digital sales and create longer-term customer loyalty.

    Although traditional subscription boxes may not be the best option for your business, It is essential to recognize that there are a variety of subscription models. If you can develop a unique strategy, the best method could transform this e-commerce trend into an effective source of revenue for your business.

    What is a subscription business model

    Subscription models are a form of business that requires customers to pay a monthly fee to access your information or services. It could be done either annually or monthly and is a great method of providing an experience to your users and generating revenue.

    The most effective illustration is Netflix. With a monthly cost, Netflix subscribers can watch films and TV shows whenever they wish.

    Additionally, since Netflix creates original content, it can provide an experience you won’t find elsewhere.

    subscription business model

    Why subscription business model: Its Benefits

    1. Subscription plans are convenient for customers.

    People are always busy, Obtain an item (that they enjoy) delivered when they require it, with minimal or no effort. Sign them up. Subscriptions help people avoid looking up new products, purchase them from stores, and provide a better customer experience.

    2. Customers can discover new products.

    subscription business model
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    Not only do they save money by not having to drive to the supermarket, but they also experience new products they might not have bought themselves.

    Try Snack Crate Take Snack Crate, for instance, which allows you to purchase bags of food items all over the globe. Through this service, you could discover a new favorite snack that you did not know existed.

    3. Companies can accurately predict revenues.

    The subscription model makes it simpler to estimate the amount of income your company will earn every month. Because your customers pay frequently, you know when they’ll need to pay and how much they’ll pay. If you’re incorporating budgets into your business plan, This will let you make an accurate picture of the resources your business has.

    4. Subscriptions can increase customers

    Sometimes, the price of a service or product is prohibitive to consumers. Charging weekly, monthly, or annually lets you establish an affordable level and allows consumers to budget the cost into their monthly expenses.

    You might think about purchasing an automobile. If you decide not to purchase it in full, you’ll probably be put on a plan of payment where you’ll be paying in stages over time. This will allow you to pay the price of the vehicle, although you may not be able to pay for the entire price at the time of purchase.

    5. Subscriptions decrease customer acquisition costs.

    Instead of contacting prospective customers who may not have a good impression of your brand or don’t trust it, subscription models let you conduct business with those who already have. This reduces marketing expenses and lets you focus more on referrals from customers. Word-of-mouth marketing is usually cheaper and more effective than advertising that promotes your business.

    6. Companies build better relationships with their clients.

    Another advantage of working with customers who are the same is that you can build deeper relationships with them as time passes. If your support team is available to provide exceptional customer service, customers become more comfortable with your staff and working with your company’s brand. This is crucial when customers need to choose whether to continue their membership.

    After you’ve learned about the advantages of a subscription model, let’s review the actions you could follow to create one for your business.

    What is Subscription-based eCommerce?  

    In simple terms, it is an economic model that permits customers to purchase items or services they require regularly. This can improve the customers’ lifetime value substantially.

    Here’s how top brands are harnessing the endless potential of subscription commerce

    Dollar Shave Club

    subscription business model
    subscription business model examples

    One of the top models of subscription commerce. Dollar Shave Club is a California-based company that offers products for personal grooming for its clients. With the flexibility of their subscription plans and high-end products, they’re a leader in the male grooming market. In addition, they use the top eCommerce shopping cart software to make shopping for their clients as pleasant as possible.

    Blue Apron

    subscription business model
    Blue Apron

    Blue Apron is an American meal kit service that provides premium food ingredients regularly. Customers can set their food preferences then their Blue Apron team will take charge of the rest. This novel concept shows how far the subscription-based business model could go.

    Farmhouse Delivery

    subscription business model
    Farmhouse Delivery

    Farmhouse Delivery is a Texas-based company that provides customers with fresh, local, and organic meat and other groceries. In addition, they provide freshly prepared meal kits, produce boxes, and everything else in between. You can sign up for the meals or items that meet your preferences. 

    Top 3 Types Of E-commerce Subscription Models

    The market for subscription-based online shopping has grown in every country. This is because the habits of shoppers change constantly. They prefer easy shopping with little effort, no shipping charges, and the best entertainment. So the subscription model can serve every purpose and provide excellent business opportunities.

    There are many e-commerce subscriptions that can be distinctly adaptable to various industries. First, let’s look at the most well-known forms of business models based on subscriptions.

    Access through a subscription model.

    The majority of people use the model of access subscription. These are subscriptions to e-commerce where customers pay a monthly or annual fee to access online subscription services. They can select the e-commerce products they want to purchase whenever they wish.

    The replenishment subscription model.

    The auto-ship, or replenishment, model is a business model for e-commerce where a buyer subscribes to receive periodic delivery of the same product. Certain kinds of products, like food, medicine, groceries, and nutritional supplements, as well as others, should be bought regularly by consumers. These are the kinds of products that the replenishment subscription model is at its best!

    Model of subscription to Curation.

    The model of curated subscriptions is based on utilizing its “surprise” element. In this model, the customers are unaware of the items they will get in every delivery. This model lets stores gather various products and then deliver them to customers in predetermined time intervals.

    This kind of subscription model can offer a significant degree of personalization. Brands could offer items that meet the needs and preferences of the customers in an individual stage segment

    Easy steps to start a subscription service for eCommerce from scratch

    The process of establishing an eCommerce subscription service is fairly easy by following the ten steps:

    1. Conduct market research

      In the beginning, you must determine the audience you want to target. Even when there are already customers in your business, you will need to identify who will buy an annual subscription instead of an ordinary product. This requires returning to the basics and understanding what users are grappling with.

    If you can identify the issues they’re facing, and what they’re struggling with, you can adapt their needs into a longer-term service. You’re not fixing a problem once; you’re providing over weeks, months, and years. You must ensure that you’ll be able to deliver an efficient solution from the beginning and have enough room to continue improving as time passes.

    You’re trying to pinpoint the current issue. Next, find out how your product or service, or a fresh version, could solve it for the customer. You must then consider how your customers’ needs will change as time passes to design a new process for your company.

    2. Select the right subscription model

    The first step to launching an eCommerce subscription is to select the model of subscription which best suits your needs. There are three kinds of subscription services for eCommerce at present:

    Curation is similar to the Blue Apron, and Stitch Fix that you can send boxes of selected products to your subscribers every month.

    Replenishment, such as Amazon Subscribe and Refill, such as Amazon Subscribe & as well as Dollar Shave Club, which allows you to make regular deliveries of consumer items

    Access like access, such as as well the Thrive Market, where the subscription cost gives access to exclusive products for members

    The process of creating a subscription service must be like the business plan procedure. It is a process that involves initial study, analysis, defining the needs of your customers, and then testing and executing. To get started, Here are five steps you need to take.

    3. Conduct a competitive analysis    

    One aspect of an analysis of your research should include a thorough investigation of possible competitors. You might already have some ideas in your head, or you may need to conduct a brand new analysis to understand who your competitors are in the world of subscription services.

    Software development is often competitive. CTOs pick their preferred software firms and vendors by looking up the websites of their choice and also online consults. There are thousands, if not hundreds, of websites to choose from, and a plethora of challenges for SaaS companies is always on the rise.

    What you must be looking for to determine your subscription model is the possibility for you to beat the competition. Perhaps it’s the product as well as the features accessible. Perhaps it’s offering prompt and quick customer service or an appealing pricing structure.

    Check out your competition to find out what they are doing and the requirement for subscriptions in your particular industry. Then, find ways to distinguish yourself.

    4. Define your buyer’s persona

    Personas of the buyer are a method of research to identify the audience you want to target. They provide a clear understanding of how consumers perceive the value and pricing of the products. When you offer subscriptions, you could be serving multiple people.

    Let’s take an example. For instance, suppose you’re planning to launch a software program built on managing customer relationships. It could come with multiple subscription levels as well as membership programs. Perhaps one of the tiers is cheap; however, it only offers access to your service’s most basic functions. The higher-end one, with a slightly higher price, provides a full suite of options.

    Like the previous example, you’ll likely have to identify and appeal to various individuals. It’s up to you to know who these individuals have in mind, the things they’re searching for, and how your offering can be improved to meet their needs.

    For a start, be aware that you could encounter a number of the following:

    • Direct buyer: The owner of the business
    • Manager/Team leader had of a team or department
    • Chief Technical Officer Responsible for the investment in technology and more skilled in SaaS products

    5. Connect with your target audience    

    According to Invespcro the study, it’s five times more costly to get a new client than to retain your existing customer. That means that you must be able to attract and keep your customer base. This is usually the most difficult aspect of getting customers because it is usually a matter of the product into their hands to convince them to buy it.

    The most effective thing you can do is consider the onboarding and sales initiatives as the first step in an ongoing relationship. It’s important to demonstrate that you’re thinking ahead and are willing to take care of a client beyond the initial sign-up. It could be anything from direct interaction or even education to giving them an outline of the forthcoming updates, features, and events they can access.

    You should make the most of any of the introductory stages (such as a trial offer) to make the transition to a monthly or typically an annual subscription in the quickest time possible. Let them have access, showcase their capabilities using your product and keep that initial involvement going to keep them from joining your team.

    6. Finalize pricing and product offerings    

    subscription business model
    innovative subscription business model

    Prices and offerings for products are the most important element of establishing a subscription model. Each SaaS product comes with certain benefits and features that depend on the tier and use cases. It can be a challenge to determine the right pricing and the features you need to choose when offering a free, monthly, or quarterly membership.


    The process of creating subscriptions can be a bit intimidating. With the right strategies at your side, you can start a profitable business with minimal effort and time. In this post, we have discussed the reasons, what, and how of the subscription business.

    It’s true that establishing subscriptions can be a little daunting. However, with the right strategy at your side, you can start a profitable business with minimal effort and time. This article discussed the reasons, what, and how of the subscription-based business.

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