How much does it cost to start a subscription box company?
With the subscription business model, one of the benefits is that you can essentially choose when you ship, meaning that you can just ship at the end of months of you’d like! (what we did at Blind Surprise). So, you can start your business and take orders before you purchase any inventory – amazing! So, the cost to get started with a subscription based business is just the cost of creating an LLC and building a website, which is very nominal! We started Blind Surprise for under 400 dollars, with no inventory.
Where can I build a website to get started?
When people ask me how to start a subscription box company, they are typically most concerned about the website. No need to fret – there are great tools available for people with no technical skills. There are fully hosted options such as Volusion and Shopify, or you can use a self-hosted option and build your website on WordPress. For detailed information on starting your eCommerce business, just sign up for my free 6-step eCource on starting an online business
Where do I find vendors/suppliers for my subscription box?
This, of course, depends on the niche that you plan to pursue with your subscription box business. You probably will want to start by finding whole distributors. Typically, a good place to start is googling suppliers or vendors that you know you want to use for your subscription box, and just reaching out to them (you will need your EIN in order to be sold at wholesale prices and be tax exempt). If you are having issues though, I highly recommend Worldwide Brands – they offer a massive directory of wholesale distributors that are pre qualified. So you don’t need to spend countless hours sifting through terrible ‘wholesale’ distributors that are often times scammers. These guys do the work for you.
Who pays for the shipping costs of orders?
One thing about subscription boxes is that you typically ship other company’s products in your branded boxes, so you can’t dropship. Rather, you are going to need to ship the orders to yourself and then ship them again to your customer. On the inbound shipping, you can typically negotiate a reasonable shipping rate with your vendor, since you will be buying in volume. That should be the only shipping you should have to consider paying for at all though. The outbound shipping is on the customer. What you can do is figure out your average shipping costs every month, and then charge that. Oftentimes, companies even make a little bit on shipping of each item.
How can I track orders to ensure they are getting to customers once I ship?
The best way to ensure that tracking is taken care of is to email each of your customers a tracking code through your shipping company. At first, we were not doing this, and then we would receive countless emails every month with people asking where their subscription box was. Once we started sending out tracking codes, we have not received a single inquiry of this type.
How do I handle fulfillment and distribution of subscription boxes?
This can definitely be one of the most difficult parts of starting a subscription box company, as most start up companies cannot afford to hire help or use a third party for this. I am putting together a guide for managing fulfillment for subscription boxes, so feel free to reach out to me and I will send over the guide – email@example.com – In terms of shipping and distribution, there are great third party services that will put together your shipping labels for you in a matter of hours. The company that we use that saves us literally hundreds and hundreds of hours is Postage Pirate. High recommendations!
Jump to other section of guide:
- What is a Subscription Based Business
- How to Start a Subscription Box Company
- Dealing with Subscription Business Model Issues
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This article is by Josh from neverjobhunt.com.