In today’s post, we wanted to introduce you to 10 great examples of successful eCommerce businesses that use the subscription model.
5 of them use a combination of one-time purchases and subscriptions, while the other 5 rely entirely on recurring clients for profit.
We’ve chosen to use these examples to show you some of the best practices out there so you can get ideas on how you can implement the subscription model for your eCommerce business, as well.
We have picked companies that offer products in different categories so you can get a clear picture of how this model can be implemented in any type of online store.
One-time purchase + subscription companies
These are eCommerce companies that combine the standard eCommerce model, where people shop for items one by one, with subscription services that offer additional benefits — additional discounts, free products and the ability to subscribe and forget about it.
Who Gives a Crap
Category: Toilet Paper
What they offer — Who Gives a Crap delivers toilet paper to your home so you don’t have to carry it all the way to your place.
Target market — the company targets Australian households, providing free shipping to most parts of the country.
Positioning — the company established itself as an environmentally-friendly toilet paper with a mission to save the world.
It is made from 100% recycled post-consumer waste such as used exercise books and worksheets that the company gets from local schools.
Who Gives a Crap also comes with a social mission. It uses 50% of its profits to build toilets in the developing world.
How do they take advantage of the subscription model? You have the option of making a one-time order (24 or 48 double length rolls) or subscribing so you never run out of TP.
Delivery options are every:
- 6 weeks
- 12 weeks
- 16 weeks
In case you run out of toilet paper earlier than anticipated, the company gives you the option of adjusting your delivery schedule at any time.
You can also cancel at any time, and even ask for a money back guarantee: if you’re not happy, you can send the product back for a full refund.
Category: Pet Food
What they offer — an all-in-one stop shop for your pet. Here, you can buy everything from food, toys, beds, grooming and health products.
Target market — pet owners in Australia.
Positioning — when Pet Circle launched in 2011, many believed it would fail.
This was simply because people viewed the pet industry as one where eCommerce wasn’t a suitable model. The reasons: the items are usually too big and the margins are low.
The founder, Mike Frizell, got the idea for Pet Circle when he realized that his parents were purchasing only 4 kgs of pet food because they were not able carry the larger bags home.
At that moment, he realized that, with good logistics, he would be able to deliver larger bags of pet food straight to their door. While providing good discounts.
How do they take advantage of the subscription model? — Pet circle allows you to buy each item as a separate package, or choose an auto-delivery option where products get delivered at the desired frequency.
The company encourages people to switch to subscriptions by offering a 10% discount for the first month of auto-delivery.
Clients can choose between delivery options such as 1–26 weeks.
Category: Male Beauty
What they offer — Manpacks is a subscription service offering men’s underwear, socks, toiletries and other basic needs.
Buyers have the option of creating their packs by including all the items that they need. Then, those goods are automatically delivered every 3 months.
Target market — busy single guys looking to save time on shopping.
Positioning — Manpacks is the first American company that has ever offered a subscription eCommerce service for men’s essentials.
The goal of the company is to deliver everything a single guy would need straight to his door so he doesn’t have to think about it.
How do they take advantage of the subscription model? — shipping essential items such as boxers, razors, socks, etc. is costly. At the same time, margins are low.
It costs the same amount to ship a $3 pair of underwear as it does a $30 pair. So, that’s why the company focuses more on its premium appeal.
By using the subscription model, they ensure a revenue stream in the long term and, by providing exceptional customer service, they tend to keep their customers for longer.
The company also offers a one-time purchase option, but it’s more like a way to convert clients into their recurring service.
Amazon Subscribe and Save
What they offer — with Subscribe and Save, you can get your favorite products delivered from Amazon once per month to your door.
Target market — customers who frequently purchase the same product and want to save time by automating the ordering process.
Positioning — offered as an additional Amazon service.
How do they take advantage of the subscription model? — subscribing clients get additional discounts on their order — up to 15%.
They also get free shipping on each subscription and the ability to cancel at any time.
You can receive your items every 1–6 months, and you can change this frequency at any time.
Email reminders are sent to remind customers before each order.
With this service and other services like Amazon Prime, this company has managed to increase sales and their customer retention rate by building a $4 billion subscription business.
Category: health products/supplements/vitamins
What they offer — Swanson sells natural health and wellness products, including health foods, dietary supplements such as vitamins, minerals, herbs, and natural personal care products.
Target market — people that care about their health and want to boost their immune system.
Positioning — Swanson positions itself as the marketplace where you can save money while purchasing supplements without sacrificing quality.
How do they take advantage of the subscription model? — as an addition to their one-time purchases, Swanson Vitamins created a program called My Auto Delivery.
With this new program, customers can automatically receive customized packages of supplements and vitamins based on their desired frequency.
The subscription service saves clients time and ensures that they will never run out of supplements because they forgot to order.
Additionally, they are motivated by a 10% discount on all Swanson brand products and free shipping for $50+ orders.
In this section, we’re going to feature 5 eCommerce companies that solely use the subscription business box business model.
They don’t provide the option of one-time purchases, though you are able to cancel your subscription at any time.
Dollar Shave Club
Category: Male Beauty
What they offer — quality razors delivered straight to your door for a few bucks every month.
Dollar Shave Club is currently offering only 3 main razors — for $1, for $6 and for $9.
Additionally, they try to upsell you items such as shave butter, aftershave and hair gel.
Target market — guys who want to save time and money when buying razors.
Positioning — Dollar Shave Club positions itself as a cost-effective option and alternative to buying razors from retail stores.
Razors are sold for between $1 and $9 per month, much cheaper than buying a $25 pack from the store.
How do they take advantage of the subscription model? — Dollar Shave Club launched their service in 2012 with a YouTube video that went viral.
Within the first 48 hours, the company has already received 12,000 orders and the founders needed to find help from friends and additional contractors to be able to deliver.
Today, the company has more than 2 million subscribers.
What they offer — Birchbox offers their customers a monthly subscription of beauty product samples that they have never tried before.
That way, the company inspires people to try and discover something new. Also, you can continue buying that product in the future if you like it.
Target market — women between the ages of 25–39 who love to take care of themselves.
Positioning — Birchbox is positioning itself as a way to easily discover new beauty products each month.
There is no other easy way to find beauty product samples. Customers find it hard to trust new products because they want to try them out first and see if they are the right thing for them.
How do they take advantage of the subscription model? — Birchbox’s unique business model profits from 3 key things: discovery, surprise and personal curation.
Customers are happy that they will discover new items each month.
There is an element of surprise, because they didn’t know what they’re going to get.
At the same time, product packages are personalized according to the user’s profile, which increases the chances of the user finding products she likes.
These 3 things ensure that customers commit to the subscription model in the long term.
What they offer — Trunk Club offers fashion advice for men and a clothing selection delivered straight to their door.
Guys then try on the clothes and keep what they like. The rest they send back, and they’re only charged for what they keep.
Target market — Trunk Club members are men looking for both fashion advice and clothing delivery.
Positioning — Trunk Club is not just a subscription service for buying clothes. They stand out with the personal advice that they give to men on what to wear, depending on their personal style.
How do they take advantage of the subscription model? — In the beginning, Trunk Club provided fashion advice in-person only to people who came into their physical offices.
However, opening new offices all the time to expand the business and convincing people to pay a year in advance for their services was hard.
This is when they changed their model and decided to go with a “virtual service.” So, now, instead of going to an office, clients can just use a webcam to speak to their fashion experts.
After Trunk Club talks with their clients, they buy the clothes wholesale and sell them at retail prices.
Their style experts are the reason why clients keep up with the service in the long term, which secures a predictable profit.
What they offer — Healthy Surprise delivers a curated box of healthy and delicious snacks with a focus on ingredients, not calories.
Target market — people looking for ways to eat healthy between meals.
Positioning — the place where you can order healthy snacks. All products are “natural, gluten-free, vegan, soy-free, corn-free, wheat-free” and range from bags of bean chips to bars of organic chocolate.
How do they take advantage of the subscription model? — food is one of the most suitable items for a subscription service, simply because people eat all the time and occasionally need to reorder.
While it’s easier to prepare a healthy meal, it’s hard to find places to buy healthy snacks.
Healthy Surprise capitalized on this need by offering a monthly subscription of healthy snacks to its customers.
There are a variety of boxes that you can choose from as subscriptions, starting at $42.49/month and reaching $749 for a whole year.
What they offer — Bluum sends moms hand-picked products for their babies each month in a box package.
The box contains 4–5 deluxe product samples like organic skincare, lip balm, stretch-mark cream, small toys, snacks and baby wipes.
The interesting thing is that moms do not choose the items they are going to receive. Instead, they are surprised by the products that are picked up by the company.
The idea is that they can discover new products to purchase later.
After moms try different products, they can leave reviews and purchase any full-size products they want.
The following memberships are available:
- $19/month for 12-month subscription
- $21/month for 6-month subscription
- $24/month for 3-month subscription
- $29/month for 1-month subscription
In addition, there’s a gifting option available, as well as a registry.
Target market — busy moms that don’t have the time to discover and shop for products for their baby.
Positioning — Bluum is unique in that they help moms discover new products that they can use.
While Amazon.com and Diapers.com have everything and ship quickly, they don’t help moms discover what else is out there.
How do they take advantage of the subscription model? — Bluum is building a business around the idea that moms don’t have the time to discover and try everything for their babies.
They are already too busy with raising their kids and maintaining their household.
The subscription model allows mothers to discover and try new items every month at a bargain price. This benefit, combined with the element of surprise, is what makes moms stick with it in the long term.
So, do you have an eCommerce business similar to any of the companies listed above? Do you think you can benefit from the subscription model, as well? How do you plan to do it? Let us know in the comments below.