Press enter to see results or esc to cancel.

Shopify Subscription Service: Everything You Need to Know

Imagine a world where you only have to sell your product once but each month, you have consistent revenue. This world could be your reality if you think about implementing a Shopify subscription service to your store.

A subscription model works best when you sell products that people already buy often. In most cases, you’ll offer the subscription plan at a discount than if they were to manually buy the individual products each week or month themselves.

For example, you would probably struggle to sell a TV subscription simply because people tend to keep their televisions for a long time. It’s not a recurring purchase most people make often.

In this post you’ll learn:

  • The benefits you’ll gain from running a subscription service
  • Shopify apps you can use to streamline your subscription service
  • Examples of great subscription sites
  • What you need to do to get started

Let’s go!

Benefits of a subscription service

The main benefit of running a subscription service is the recurring revenue you receive.

Think about it. Imagine you spend $1000 marketing your business. In a traditional sense, if your products are worth $100 each, you need to use your marketing spend to attract 10 people to your store to buy from you.

If you manage to do that in one month, you’ll have generated $1000 in revenue. But the issue, then, is you have the spend the same marketing budget the following month in order to do it again.

What if, for example, you used the same $1000 marketing spend, but instead of people making a one-time purchase and not coming back to buy again, they signed up to purchase your products automatically for the next 6 months.

In this case, you’ve spent $1000 on your marketing but gained $600 from your 10 customers.

This gives you more money to play with.

The second benefit of operating a subscription service is the increased customer lifetime value.

If someone purchases from you once and spends $100, that customer is worth $100 to your business.

However, if a customer consistently buys from you every single month, (at $100) that customer, after 6 months, is now worth $600.

And the greatest thing about it, as long as you continue to provide a good service for those subscribed to your product line, there’s a high chance you’ll have a lifelong customer.

Shopify apps for your subscription store

The best thing about Shopify is the array of plug-and-play apps you can use to boost the performance of your store.

One Shopify subscription app to consider is ReCharge.

Shopify Subscription Apps

ReCharge allows you to sell your products as a subscription and offers a suite of tools that allow you to analyze the effectiveness of your subscription service.

You can see how many customers you generate per day, as well as the lifetime revenue of these customers.

Examples of great subscription sites

As we’ve stated, subscription services work well when you offer recurring payments for products people would ordinarily buy anyways.

It’s even more effective if the products these people buy are necessities. If you have an electric toothbrush, for example, you only need to buy that once, but the toothbrush heads need to be changed much more regularly. It would make sense for Toothbrush companies to offer a subscription service on the replaceable heads.

Coffee

Coffee, although not a necessity, is often sold as a subscription. Nespresso has two options when a customer wants to buy coffee. You can either buy individual pods yourself, as and when you need them. Or you can use their subscription plans.

Coffee Subscription Model

Their process is simple and what’s more, you can get your Nespresso machine for just £1. Now if you were to buy the coffee machine without the subscription, you’d pay around £100.

So how are Nespresso able to offer it for just £1? Well, they understand that having customers under a subscription is worth more to them than having a one-time purchase. They reduce the cost of the machine to incentivize people to sign up for the subscription.

Pets

People love their pets and love to treat them. One thing many pet owners can agree with is the frustration of forgetting to buy something for your dog, or running out of time to get the things you need.

Pet Subscription Box Examples

Bullymake Box are a dog toy subscription company that markets itself towards dogs who need tough toys.

As you can see, the longer you subscribe, the cheaper your box becomes each month. This is because this company, again, understands the value behind having a customer for the long-term.

What’s more, when you run a subscription business, you have a much better opportunity to get to know your customers on a deeper level.

Perhaps one customer’s dog doesn’t like toys that squeak. You can make a note of that and ensure that you don’t include squeaking toys in the future.

This level of personalization is much harder with one-time purchases. Your customer will be thankful for the personalization and much more likely to tell their other friend about your service.

Amazon

One thing you can do is learn from Amazon’s approach. Although, not a Shopify store, Amazon offers a lot of their products on Subscription. If you’re looking for inspiration as to what sort of products you can create a subscription program for, Amazon could be a great first place to look.

Amazon Subscription Service Gillette Example

If you look at the example above, you can save 5% more after the initial sale price by subscribing to this product.

Shopify Subscription Service Amazon

When you set up an Amazon subscription, you’re also to decide how often you want to receive your products too. This way you’re still in control.

Final thoughts

Now you have an idea of how you can add a subscription service to your Shopify store, it’s time to start thinking about which products lend themselves to the subscription model and which you could offer discounts to in order to incentivize people to sign up.

Have you ever implemented or bought from a subscription store? Leave a comment below.

Comments

Leave a Comment