Starting a Subscription Business: Ultimate Guide

The subscription market has been growing for years. And is expected to continue to boom. By 2028, the value of online subscriptions is expected to rise to around $2.3 trillion.

Much of this revenue comes from streaming and e-commerce giants that have revolutionized the model and made subscriptions an integral part of many people’s household budgets.

But small businesses are also using subscriptions to provide their customers with more convenience while generating stable, recurring revenue. E-commerce companies sell subscriptions for everything from exclusive online content to monthly grocery deliveries.

Here’s how to start a subscription business and how you can use it to sell your products online. Learn the pros and cons of starting a subscription business and discover the most popular subscription apps for Shopify stores.

For whom is it worthwhile to start a subscription business?

Starting a subscription business is especially worthwhile if you offer a product or service that customers use or buy again and again. A subscription model can save customers the trip to the store.

In this video we show you how to start a subscription business:

Ready to start your business?  Create your website  today or learn about  Shopify’s tools  for selling online and in-store.

What is a subscription business model?

A subscription business model means that customers pay a recurring fee to receive products or services over a period of time. Subscriptions are a traditional revenue model in industries such as print media, TV, software, gardening, new zealand email list and food services. Recently, they have also become a popular payment method in e-commerce.

For example, many software companies license their products through subscriptions, while streaming services and content libraries offer subscribers unlimited access to content. Some independent designers and creatives use subscriptions to sell their digital products .

Overall, using abandoned cart campaigns many companies prefer subscription models to strengthen customer loyalty and plan revenue more reliably.

Advantages of subscription business models

There are several reasons why many companies prefer subscribers over one-time customer interactions.

Predictable income

A base of subscribers provides recurring revenue, china phone numbers allowing you to more accurately predict how much money your business will make in each period.

This predictability makes it easier to plan sales, manage inventory and invest in growth.

More liquidity

Many subscription business models require an upfront payment for the entire term of the subscription. This provides companies with immediately available capital, improves cash flow , and enables startups to get started with minimal start-up capital.

It is common practice to offer long-term subscriptions at a discounted price to convince hesitant customers.

Efficient customer acquisition

With pay-per-product models, you have to constantly invest in marketing to acquire new customers – this drives up the overall cost of customer acquisition.

In a subscription model, each customer has a higher lifetime value, so you don’t have to constantly invest in acquiring new customers to keep your business running.

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