Start a Subscription Business on Shopify

The hottest trend right now is to start a Shopify Store business that sells products based on subscriptions – it’s called Subscription eCommerce.

Sure, you can continue to sell products to customers but the end goal will be to get your customers to subscribe to your products. This is a relatively new, fast growing way of buying things online.

What products do customers subscribe to?

The possibilities are endless – from coffee and tea to toilet paper and contact lenses, from food supplements, groceries, and wine to female hygiene products and cosmetics. Analyze your buying habits and you’re bound to get a few good ideas that will help you and your family.

The subscription model has been powered by Walmart’s Beauty Box, Sephora’s Play, P&G’s Gillette on Demand, and the traction started to take place when Unilever acquired the Dollar Shave Club in 2016 for a whopping $1 billion giving subscription eCommerce a lot of publicity.

Why is the subscription business model so attractive?

• For customers: it’s becoming the norm. All the online services are becoming subscription-based. From Google capping drive storage space for phone backups to Netflix and Amazon Prime. Subscriptions are all around, are getting pushed hard, and are becoming standard.
• For businesses: subscribers are a reliable source of income that allows them to grow and expand.
• For startups: it allows them to gather much more investment, seed money from potential investors than a traditional eCommerce store ever would.

Understand what types of ecommerce subscription businesses exist

There are three main types of eCommerce Subscription businesses:

1. Access or Discount Subscriptions where subscribers pay a fee in order to get access to better pricing.
2. Curation Subscriptions, where the subscribers pay in order to get new, exciting products like apparel or food products.
3. Replenishment Subscriptions, where subscribers wish to save time and energy and not  worry about basics like diapers, hygiene products, razors, or beauty products.

Start an eCommerce Subscription Business on Shopify.

Checklist:

• Define the product(s) you want to build your subscription business around
• Understand your customer and the demographics
• Set up your Shopify Store’s technical infrastructure
• Create subscription sales funnels and define your customer journey
• Push traffic to your site and build your business up

For the sake of this article let’s assume you already know what you are going to sell and you understand who your customers are. These two elements are very important in designing the store and the user experience.

You need to add your products, build your navigation structure, add a theme, and build the frontend of the website.

When the time comes to set up your subscription functionality you really need to think about user experience and payment processing.

The user experience is very important. It starts on the product page where you need to easily enable all your visitors to become subscribers. It ends on the customer admin panel where you need to allow all your subscribers to be able to modify their subscriptions.

Shopify has many options but the one we’ve run most into has been ReCharge Subscriptions. You can’t go wrong with their Free Trial, really! Just install this on your site and you will be ready to go within minutes!

Where do eCommerce Subscription businesses fail? Most of the times it’s not in the first 3 steps, but in getting the most out of their traffic, building a correct subscription funnel.

Once you have the subscriptions ready to go you need to create sales funnels, or subscription automation flows.

Set up your email marketing automation so that every action visitors make leads them to your subscription products.

Think of it logically.

You push traffic to your website via Google, Facebook, Instagram, TikTok, etc. That traffic lands on your website and some of it will also convert but it’s a busy world and between 99.9% and 97% of that traffic comes and goes without ever thinking about coming back.

It makes sense to get the most out of your paid traffic every step of the way.

Email Marketing Automation for Subscription eCommerce Businesses

New Visitor Flow

Action: The user signed up for newsletters but did not place an order.

You need to have 3-4 emails in this flow that will not only incentivize the first order but will also plant the subscription seed. Build your brand up and your eCommerce subscription business.

New Customer Flow

Action: The customer placed their first order but is not a subscriber yet. Use this email flow to further build your brand and business model.

• The first email should always show your new customer that your business is socially accepted and that the subscription is awesome and a necessity.
• Use the second email to educate the new customer about the product they’re purchasing (i.e. what are the health benefits of the supplements and a printable calendar where they can plan their workouts).
• The third email can talk about cross-selling (i.e. ordered food supplements for vitality and energy, push complementing products that help the customer rest).
• With the fourth and fifth emails in this flow, your main goal will be to get a subscription order placed. Have a great, and when I say great, I mean awesome deal for their first subscription order. It doesn’t really matter if you’re not making any money in the first month.

What matters is that you get the subscription order because if you don’t, it’s the end game. Your one-time customer will go to Amazon next time or to a competitor that has a better offer.

New Subscriber Flow

This flow’s main purpose is to educate your new subscribers and to keep them engaged. Build a Subscription FAQ or create a few videos where you quickly teach your subscribers how they can be in control of their subscriptions.

The last thing you want is your hard earned subscribers cancelling because they wanted to skip a month or change their product.

Post Purchase User Generated Content Flow

Once you have a subscriber, you have the possibility to get new visitors on your site at a much lower cost than with paid ads. Incentivize your new subscribers to share their experience on social media and ask for product reviews. Build a following.

VIP Customer Flow

Every subscriber should be considered a VIP customer. A subscriber is always going to look for perks so have some handy. Once your subscriber placed their second order be sure to inform them of the great perks that are available to this exclusive club.

Free gifts with every X order or you can gamify your Shopify Store Subscription Business with an incentive journey.

Take this even further and use a Loyalty Service to bring loyalty points and further savings into the equation. Don’t be afraid to try various mixes!

Winback Flow

Do not forget about the customers that never became subscribers. Think about your product’s replenishment cycles. Then prepare a few emails that with a deal so good, the customers cannot say no to it.

Try anything short of giving them the products and some spare cash.

Subscription Cancellation Flow

Finally, you need to cut your losses. Over and over we’re seeing subscribers cancel for all the wrong reasons:

• had left over stock and wanted to skip a delivery
• were going on holiday
• wanted to change their product

You need to identify these reasons because they are easy to combat.

Build a flow targeting each reason and win back your subscribers. If logic doesn’t work give them some time (maybe they’re on holiday already 🙂 ) and then start working some incentives in.

Last but not least, at every step of the journey, never worry about your customers taking advantage of your incentives. The first year I’d be surprised if you were making any money. Everything should be reinvested into growing your subscriber base.

The end goal is for your subscription to become a necessity. You’ll have plenty of time to polish up your incentives strategy once your business is off the ground.