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Nabil Islam
Jul 31

How to Sell a Subscription on Shopify (July 2022)

in Welcome to the Forum

Convenience is the name of the online subscription game. People want to know that their big bags of toilet paper show up on their doorstep every month. They want access to an unlimited supply of streaming channels without having to buy movies every night. Many online consumers even seek out dozens of subscription services to simplify everything in their lives, from cooking to cleaning to razors to gift-giving. Subscriptions play a vital role in simplifying life, but they also constitute an excellent business model. Look at how many companies have moved to a subscription model: Adobe, Microsoft, Disney, Equinox - they've all discovered the benefits of subscriptions and moved to subscriptions (at least in some of their businesses). In this article, we'll explain why selling with a subscription model is so beneficial. After that, we'll teach you how to use Shopify , giving you the easiest way to implement a subscription business model.

Why is the subscription business model so appealing?

Sell ​​subscription to shopify - exampleAdobe is a good example. The popular photo/video/website editing software company has a long history of selling expensive industry software. However, photographers who want to use Photoshop will pay anywhere from $500 to $1,000. However, this large purchase means that our professional photographer will own Photoshop software for the next 10 or 20 years, or in fact, no matter how long that person is willing to use outdated software. As most old Photoshop users know, the software definitely lasts a lifetime. The 10-year-old version is still very powerful, and many newer versions don't have enough features to set you back another $1,000. However, Adobe got smart, or they at least followed the trend of other companies touting subscriptions instead of one-time purchases. They discovered the incredible benefit of selling Photoshop (and all their other software) as a monthly/yearly subscription rather than a one-time payment product. These benefits apply to almost any subscription business:

Subscriptions attract more customers. The pill is easier to swallow when customers only pay $10 or $20 a month for the product instead of paying a higher one-time fee (whether it's $100, $500, or $1,000). However, the business selling the product can still make just as much money as long as it keeps subscribers happy.

The subscription business model provides a predictable revenue stream. You don't have to make crazy sales forecasts for each quarter. Yes, subscription businesses inevitably lose subscribers, but it's easier to predict monthly unsubscribe rates and look at your guaranteed consistent subscriber base to instantly see how much money your business will make in the future.

Subscriptions increase the return on customer acquisition costs. This is true because subscribers are generally more likely to stick around, forget to cancel, or at least take the time to figure out if they want to keep using the subscription.

You have built a high level of brand loyalty. Finding new customers is much more expensive than retaining old ones, so a subscription model lets you focus on keeping your existing customers happy. When this happens, you develop a strong love for your brand and increase the lifetime value of your customers.

The subscription model increases the opportunities for up-selling and cross-selling. Instead of spending time and money finding new customers, subscription companies can continue to sell relevant products to users they've already reached out to. Those people have already shown interest in your company!

That being said, it's no wonder so many companies have turned to subscription business models. If you agree, keep reading to learn all about how to build your own business and sell subscriptions on Shopify .

1. Choose a model to sell subscriptions to Shopify

suture

Stitch Fix combines curation and a "try before you buy" subscription model.

The first step in selling a subscription to Shopify involves choosing which products to sell, but more importantly choosing a subscription model. After all, the subscription model usually dictates what you sell on your website, or at least is tied to the product. For example, it makes the most sense to use an item supplement subscription model when selling men's shaving accessories or choose a product management subscription model for a monthly activity box. If you're wondering what these models require, we'll outline them below. Once you've established a subscription model, you can combine it with a product line of your choice for a more successful online business!

product planning

Product curation is popular because companies like Stitch Fix, CrateJoy, and Breobox compile a collection of items at these companies that are sent to customers on a regular basis. These are usually sent in boxes, and sometimes customers have the option to specify the type of product they want to receive. For example, a monthly selection of books is available for subscribers to read each month, but customers can actually choose from five books, rather than letting someone who doesn't read romance novels get a romance book completely out of the blue. Other curation boxes do most of the work for the client. Nomadik subscription boxes let you choose the box size, but after that, the company cobbled together multiple outdoor, camping, and adventure items like hammocks, compasses, and trail food. The product management model has the following advantages:

High profit potential.

Exciting and surprising products to send to customers.

If customers like what's in their box, there's an opportunity to upsell or cross-sell.

A great choice for gifts.

and potential drawbacks:

High operating costs.

Logistically complex as you have to make a custom box for each subscriber each month.

High churn as many consider these to be non-essential or novelty products.

Commodity Supplement Subscription

The merchandise subscription model allows customers to replenish supplies of essential consumer products, such as toilet paper, bathroom supplies, and pet food. Many e-commerce businesses offer supplemental subscription models as an alternative to regular online stores, offering customers discounts if they sign up for recurring orders. The benefits are as follows:

Conversion rates increase because these are products that customers often want.

Easier to keep subscribers for longer.

You may offer a subscription "pause" as an alternative to unsubscribing.

and potential drawbacks:

Profits are thin because many replenishment models rely on deep discounts. These companies also sell products with already tight email list profit margins, such as consumer goods.

There is fierce competition.



Reinventing common household items is difficult, so brands need to consider unique value propositions that have never been explored before.

Try before you buy a subscription

A "try before you buy" subscription includes elements of product management, but it also allows customers to test a product or service and decide if they want to buy it. Fashion box businesses like Stitch Fix and Birchbox both offer try-ons before buying a model, and customers receive a curated collection of clothing each month. Then they have to pick the ones they like and send the others back. benefit

Brand loyalists tend to stick with these types of subscription services over the long term.

You don't waste inventory that your customers don't want.

Even if the customer doesn't want to buy anything out of the box, there is still a subscription fee. Therefore, you will receive a certain amount of guaranteed income.

Potential disadvantages:

Running a business like this is a logistical feat, and you're curating every box while also accepting returns all the time.

Profits typically remain thin, especially since customers are expected to return many products.

It opens up the possibility of abuse, such as people wearing/using products and then trying to return them.

Content subscription

Content subscriptions cater to online creators and agencies. We're talking about magazines, podcasters, bloggers, and video influencers who want a paywall in front of their premium content. Subscriptions unlock paywalls, and many times we see other benefits included in subscriptions, such as access to private forums, free swag, or personal training calls with your favorite influencers. benefit

You get a steady stream of income for your content.

It's more reliable than advertising or affiliate marketing if you have followers.

Content subscriptions help to present a sense of authority and exclusivity because people think there is something very special behind the paywall.

Loyal subscribers become powerful brand ambassadors.

Potential disadvantages:

Forcing people to pay for online content is a shame. That's why it's recommended that you give at least something for free and then sell the more exclusive side subscriptions.

You absolutely must provide high-quality content that other wise users won't pay for.

If it's too clear that your free content is just a way to direct them to your paid content, you can hinder your overall follower growth.

Many content creators forget about their free content (or have reduced quality), which ultimately leads to disgruntled followers.

Support subscription

Supporting subscription options is probably one of the oldest subscription models that has evolved into the digital age, especially for software companies. Companies that sell physical products or services can also subscribe to support services, for example, if you want to provide consistent maintenance work for HVAC customers, or an annual subscription payment plan for auto mechanic customers (everything from oil changes to routine maintenance is cycled) . This is also very common in digital products, where someone uses a software, app or online tool and has the option of paying monthly or yearly for email support and annual program updates. benefit

You can offer products and services at a lower price (sometimes free in the tech world) if you know that you only need to invest time and money to support it when someone actually needs it and pays for it.

It provides an additional revenue stream for customer support that is only needed in certain situations.

You can make multiple support packages so that all customers have access to your resources.

Potential disadvantages:

Some might see this as an unnecessary mandatory fee just to get customers to subscribe.

Many software companies find it common for users to simply buy the original product and opt out of future updates and support, meaning recurring payments are not guaranteed.

2. Start an online store Shopify

how to sell a subscription to shopifyOnce you have a subscription business plan, products to sell, and some motivation to start your business, it's time to create an online store. The easiest way is to sell a subscription to Shopify, one of the most popular ecommerce platforms. Read our full guide to launching a Shopify store , create your products, and start marketing your store on the Shopify admin portal. Comprehensive, Shopify acts as a hub for every part of your business. You pay a small Shopify subscription to host your website, build your website with pre-made themes and a drag-and-drop designer, and process payments (via the Shopify Payments payment gateway) when users buy items from your store. This is an all-in-one package for launching an online store.

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