The key ingredients for successful subscription commerce companies

- December 14, 2012 3 MIN READ


guest post by Carlo Pandian

Subscription commerce seems to be skyrocketing lately. Customers pay a monthly subscription to be entitled to use services, buy cheaper products or receive goods each month.  It’s proving to be hugely successful for many companies and this is resulting in well-known business models reinventing themselves to offer a similar service. If you are looking to jump on the subscription commerce band wagon you will need to be aware of the necessary criteria that you’ll need to make it a success.

One of the main advantages of using this business model is the ease of transforming one off or casual customers into long term returning customers that will pay you a set amount each month.  You can therefore create recurring income and a certain level of predictability concerning sales.  It’s more comfortable for start-ups as it does away with the feast or famine days that can plague the self-employed.

The Key Criteria for Your New Business

  • When you establish your subscription business you will need to have the tools that will allow you to provide the service. Your customers will need to be able to sign up easily and make regular payments that you can collect with ease. This will require an in-depth website with a decent infrastructure and unless you have experience making these types of websites you will have to approach an expert web designer to get you started. In addition to the modern website you must also provide a very user friendly website that will be enjoyable for your visitors to use. The last thing you want to do is over complicate things for your customers, so ensure it is designed to be used by even the most novice Internet users.
  • Once you have created your working website you will need to target your customers and ensure you keep attracting new ones while keeping the ones already signed up. You can advertise on the usual online channels such as social media profiles, working on your SEO with building links and working on your keywords to improve your rank in the search engines and promoting your website everywhere you can think of. If you already have a small business let your customers know about the new changes and invite them to join.  You can encourage more responses by offering special sign up offers.
  • Maintaining detailed accounts is also a must. You can use affordable accounting systems such as the hugely successful QuickBooks.  Keeping accounts will help you to stay on top of your profits and losses. All of your records can be stored on your hard drive, printed off and saved online for extra back up and security. Accounts play a huge role in helping you to determine what’s working and what isn’t.  Tools such as QuickBooks also ensure that you have all the information you need ready to be transferred on your tax return forms and when applying for loans from banks or investors.
  • Transportation of goods is also something you need to consider. Hiring a logistics provider is probably the most efficient way to post out the goods each month. You will need to consider the costs of the posting and packaging so ask for quotes and remember to calculate the costs in the prices you charge your customers. If you don’t have the money there to use a logistics firm immediately be prepared to spend plenty of time packing parcels and causing a queue as you post them at the office.

Subscription businesses don’t have to cost as much as other businesses to set up. Expect to spend the most money on the website itself. Keep excellent records on sales and expenses and work hard to ensure your customers are happy month after month.