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17 Oct 2021, Edition - 2287, Sunday

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Business

Subscription Business Model: The Complete Guide

Covai Post Network

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TCP : ADVERTORIAL

Customer appetite for subscriptions is showing no signs of slowing down and if you have seen a business opportunity that would be well suited to this format it makes sense to try and find a good way of monetizing your idea.

Here is a guide to the sort of questions you need to answer and bases you need to cover if your subscription business is going to have the best chance of success.

What are the main advantages of this type of business model?

A good starting point would be to ask yourself what it is that makes the idea of a subscription- based business so appealing.

An obvious advantage attached to this business model is the element of predictability it offers.

When you launch a business you are entering unknown territory and can only guess at the costs and sales projections that you might be able to achieve because of so many variables.

A subscription business model delivers a greater degree of certainty as it is easier to make an educated calculation as to what sort of costs and profits you are likely to achieve. This is primarily due to the fact that you are selling a packaged product that you can cost out with reasonable accuracy.

Logistics are less challenging

Another appealing aspect of subscriptions is how much easier it is from a logistics perspective.

It is simple. You are going to be shipping one subscription box each month and that makes the fulfillment process far less complicated.

You know how much it costs to ship each box and you don’t have to have a warehouse full of different items, which can be costly.

Finding an edge

You might think that the subscriptions market has become fairly saturated with so many new entrants in the last few years. However, there is always space if you identify a niche and then set about filling that void.

Make sure you thoroughly research the market and scrutinize what your competitors are offering so that you can find an edge.

Reliable suppliers make all the difference

You don’t want to disappoint your subscribers by having to delay a shipment or cancel certain items because they are unavailable.

That is why it is essential that you do the groundwork in establishing good relationships with suppliers you can trust and will givethe support and prices that make your business model viable.

Work on your packaging strategy

The packaging design and solution you use for your product is critical for so many valid reasons.

Firstly, it should always be remembered that the subscription box is the first physical impression a customer will get of your business. That is why it has to have the credentials to impress.

As well as using a design and presentation format that has the capacity to impress the recipient it also needs to work from a packing and shipping point of view.

Some subscription businesses regard packaging as being of secondary importance and only focus on what it is they are shipping.

That is often a mistake and your packaging strategy is often key to a successful subscription business model.

If you get these vital elements right before you launch your business you will have laid the foundations for what could be a successful venture.

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