The ultimate guide to the subscription business model

The subscription ecommerce market is projected to rise over 3000% by 2025, from $15 billion in 2019 to $473 billion.

What is a Subscription Business Model?

A subscription model enables shoppers on your store the ability to purchase products in an automatically recurring way, usually at a discounted price. This converts one-time buyers into repeat customers with predictable monthly revenue.

The average consumer has doubled their retail subscriptions from two to five subscriptions since the first quarter of 2021.

Four Subscription Product Categories

1. Service subscriptions - streaming services
2. Information subscriptions - magazines, newsletters
3. Consumable subscriptions - meal boxes, supplies
4. Durable goods subscriptions - clothing boxes

Three Subscription Models

Access Model

Provides exclusive community perks. Benefits include predictable revenue and increased customer loyalty.

Curation Model

Features surprise product discovery with personalized items. Merchants gain easy inventory management.

Replenishment Model

Targets frequently purchased commodities (razors, cleaning supplies). Offers convenience and saves customer time/money.

Six Benefits of Subscription Models

1. Sustainability

Reduces overconsumption and wasteful seasonal collections.

2. Recurring Revenue

Creates financial stability and predictable forecasting.

3. Community & Loyalty

Builds strong customer relationships through convenience and value.

4. Valuable Data Insights

Customer preferences inform personalization and marketing.

5. Reducing Costs

Lowers acquisition costs. Industry churn rate is approximately 6.27%.

6. Successful Promotions

Facilitates product discovery and upselling opportunities.

Best Ecommerce Platforms

General Platforms: Shopify, WooCommerce, Wix

Specialized Platforms: Podia, CrateJoy

Implementation Essentials

Successful subscription launches require evaluating:

• Subscription type selection
• Pricing strategies
• Platform choice
• Product viability
• Fulfillment tools
• Customer experience design (payment, personalization, communication, packaging)