 How to start a subscription business? A complete guide. Hey guys, welcome to the video. Have you noticed, have you noticed that there's a lot of subscriptions out there now for just about anything from dog food, to groceries, to light bulbs? In this video, I'm gonna show you how you can start a subscription service and be wildly profitable. Heck, I've done it, okay? I've made money on subscription services and I use subscription services. So I think I have a right to talk about them, right? Do me a favor, subscribe to the channel. Hit that subscribe button down there. Turn it from red to gray. Don't forget to ring the bell. Turn on all bell notifications so you're notified each and every single time I go live. Okay, subscriptions. It has happened. People are signing up for subscriptions. As a matter of fact, 15% of all Americans now say they've signed up for subscriptions. Why? Because it's convenient. I mean, we don't have to worry about our pet food. It just comes to the door of, heck, get this, you're gonna love this. We have a printer in the office and it is hooked into Amazon. And when the ink cartridge gets low, it sends a signal and that signal sends an order to Amazon and they ship out a new ink cartridge for me. I don't even have to check it. They check it for me. That's pretty cool stuff, don't you think? And I get a discount for doing it that way. I never have to worry about running out of an ink cartridge because when it gets low, it tells itself to order one. Now, that's very specialized, but you can start a subscription business too. People are tuned in to do this now. The subscription business is estimated to be $473 billion by 2025. Now, the first thing I'm going to tell you is you probably wanna get a good subscription service software. I'm gonna highly recommend that you get Cartra. If you look down below, and you can, by the way, integrate Cartra with whatever website you have now, whether it's WordPress or Shopify or whatever it is, but if you look down below, you're gonna see a link to Cartra. Now, when you go down to that link, you're gonna wanna click on it and watch the video. There's no opt-in, don't need a credit card, don't have to give your email. Go down there and just watch the video. If you like what you see, and I know you will, after you watch the video, you can actually get Cartra for a trial for only $1. I highly recommend it. It's a great marketing tool and you can set up all your subscriptions in there. Okay, let's look at all the reasons to start a subscription. Number one reason for starting a subscription is you've got predictable income. You know what you're gonna make every single month. That's the cool thing about it. A lot of businesses, if you're just selling products, some months are up and some months are down, but if you've got subscribers, people that are paying you on a monthly basis, you've got a constant stream of income that you can rely on. Number two is it gives you more liquidity. In other words, you have more money on hand because with a subscription service, the customers pay upfront, you get your money upfront, and then you deliver the goods or services, whatever they may be, but that allows you to have more cash on hand. Number three, it also allows you to spend less on getting new customers because once you've got the customer, they're paying every single month. It's been estimated that to get a new customer, it will cost you 10 to 15 times as much as if you already have sold something to somebody. And when you've sold it to them once, you know, like on a monthly basis and they keep paying every single month, you don't have to do anything to get them to keep paying every single month, but just take care of the customer. Number four is kind of like real estate. It's loyalty, loyalty, loyalty, instead of location, location, location. When somebody's paying you every single month, they're a loyal customer to you and you can sell them other products on the side as they're paying for their subscription every single month because they're loyal to you. They like you and they're paying you every single month anyhow. Okay, let's talk about some of the different business models. The first one is curation. Curation is where you get other people's products and you put it together in a package and you send it out to your customers. A lot of these could be birch box, they could be clothing, they could be dog treats, they could be whatever you want, but you curate it. You get all the products from other people, you put them in one box and every month, that customer gets a new box and they get a surprise and they like that. Now there's gonna be risks to all these different models and there's risks to this one. They have a high churn rate because once people have gotten a few of these boxes and they've gotten the surprises and they've really loved it, they may wear out on that and you may have a higher churn rate and people may actually unsubscribe to it. The other thing you run into is you've got to organize and get all these products and that takes a lot of work to do that. The next type of subscription model will be a replenishment model. What's a replenishment model? Well that's where somebody uses a product and they need it every single month or every week or every three months or whatever it may be. We do a replenishment model for our pets because we get pet food through a service and they send it to us on a regular basis and we subscribe to that. You'll find that you have a lot higher conversion rates on the replenishment type of model because people need this product over and over again. It could be laundry detergent. It could be lawn care. It could be any number of different types of things but it's called the replenishment model. Now when you're doing a replenishment model, generally the margins are a lot thinner. You don't make as much profit on each one. However, you do have the security of knowing that you have that money coming in on a monthly or weekly basis. The next one is access business model. What's an access business model? Well that is where somebody pays you a subscription fee to get access to particular products. A Thrive Market is a good example of that. You pay a fee to Thrive Market and you get access to all the products in their marketplace at a discounted rate. So that's another good way of going about a subscription model. Now all subscription models have the same devil in it or the same problem in it and that is unsubscribers or high churn rate. So that's something you gotta really work at. Now you can lower this churn rate by doing certain things in advance. The first one is really research your products. Make sure the product is a really good product. Make sure it's something that when they sign up for it and they get it, they're gonna go, wow that was a good choice. I'm so happy I bought this. Make sure they don't get the product and go, oh this is a rip off. I'm gonna go ahead and unsubscribe because then you're gonna constantly be trying to fill the funnel of new subscribers. Next thing I would say is be really clear about your business goals. Are you trying to get a lot of subscribers? Are you trying to get a high profit margin? What is it you're trying to do? Are you trying to build a business so you can sell them other products? Be very clear about that so that you know if you're succeeding or not. And the next thing I would tell you is be very conservative about your pricing upfront. It's okay to charge not quite as much upfront as long as you're covering your cost because you can always go up on pricing. But you wanna break into the market, you wanna make some headway into the market and you wanna build up your subscriber base and the best way to do that is offer a really good deal upfront. Number four is spend some time on personalization. Personalization, the more personalized you can make that subscription service to the user, the more likely they are to stay. As a matter of fact, 28% of respondents said that they would stay in a subscription service as long as it was more personalized. Next thing you wanna do is prioritize customer experience. That's very important because your biggest enemy is churn rate. We talked about that earlier. If you really prioritize customer service and really take care of that customer and go overboard and really make them feel good, you're gonna keep your subscribers a lot longer than if you just treat them like a number. You also wanna diversify your marketing channels. You wanna look at all the different ones. You wanna look at YouTube. You wanna look at Instagram and Facebook. And yes, nowadays influencers. Find people who are already in that niche, who already talked to that audience and see if you can work out a deal with them. Don't just think of big influencers that have millions of followers. Some of the best ones are 1,000 to 10,000 followers because their audience listens to them more. They have more connection with their audience than somebody who maybe has say 10 million followers. So you wanna talk to some of those influencers and get your brand out there. Now, we talked about churn earlier and that's people not subscribing again, but what about involuntary churn? Well, what is involuntary churn? Well, involuntary churn is when credit card, let's say expiration dates go out or when a credit card gets canceled or whatever. If a subscription doesn't go through, make sure you contact the subscriber and say, hey, you're missing out. Your payment didn't go through. This is what you can do. Click here to resubscribe. Make sure you follow that up. If you don't follow that up, just the involuntary unsubscribes, if you will, are gonna hurt your business. So you've gotta stay on top of that. According to ProfitWell, they say that 20 to 40% of the unsubscribes are involuntary. That's a huge number. So you can see if you stay on top of that, you're gonna keep your subscribers a whole lot longer than if you don't. I hope this clears up a little bit about subscription services. They're a great thing to do. And like I said in the beginning of this video, 15% of all Americans have already signed up for subscriptions. This is something you can do too. This is something that the average person could operate from their home if they want, or the deck of a cruise ship or traveling around the world. Subscription services are awesome, guys. There's a lot of companies out there now that will package this stuff and ship it out for you. I can do another video on that if you'd like. But basically, subscription services are awesome. We have subscribers at Survival K Food. We offer subscription services and they get their product at a discounted price on a regular basis and we have steady income. And that's what you want and that's what you'll get with subscription services. Now, I've got a lot of other videos on this channel. Feel free to check them out. Go through the channel. We have over 1,200 videos on this channel now. Well, at the time of this recording, maybe there's 2,000 at the time you're listening to this. But bottom line is there's a lot of free information for you there. Below, I also have a free course you can click on and get. It's absolutely free, e-commerce course. Click on that and get it. And don't forget, if you haven't already, make sure you subscribe, hit that subscribe button, turn it from red to gray and ring the bell. Turn on all bell notifications so you're notified each and every time I go live or if I upload a video. And I wanna hear from you. Put some comments below. Have you tried some of these things? Do you have a subscription service now and who do you subscribe to? Put that below, I wanna see that. Maybe there's gonna be some consistency down there. Thanks so much for watching this video, guys. I really appreciate it and I'll see you in the next one. Hey, thanks for watching my video. 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