The Ultimate Side Hustle: Starting a Subscription Business

starting a subscription businessThis is a sponsored post by Jacob Clifton, Content Marketing Manager at Cratejoy. Cratejoy is the go-to platform to start, scale, and manage your subscription box business.

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When most of us think of a side hustle, we think of e-commerce, copywriting or other single-serving offerings.

These projects can be great, but the reality is they can also be highly unpredictable. Sales can dry up and writing gigs can disappear.

For those who want a sustainable side hustle with dependable recurring revenue, there’s a new model making noise: subscription commerce built around monthly boxes.

A Growing Trend

Since 2011, these have emerged as a lucrative lifestyle business with tons of consumer interest:

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Nick’s Notes: This chart comes from Google Trends, a free tool you can use to see the interest in a given topic over time.

This idea is taking off. More and more people are searching, finding and starting their own subscriptions for necessities, gifts, or monthly surprises from shoes to underwear to video game swag.

How Subscription Businesses Work

Technically, a subscription business is anything featuring a recurring, automatic payment. In this post we’re talking specifically about subscription boxes, or crates.

The business works like this: Subscribers receive a shipment of goods relating to a common theme on a regular schedule (usually monthly).

Birchbox, for example, sends a few sample-size personal care products and gadgets to entice subscribers to purchase the regular version, whereas BarkBox sends treats for dogs and their owners.

The field is exactly as wide as you can imagine.

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Since 2011, hundreds of new subscription boxes have been started, and some have become multi-million dollar businesses, like Birchbox, Barkbox, Dollar Shave Club, Ipsy – the list goes on.

What it Takes to Start a Subscription Box

What’s more interesting is that the majority of subscription businesses, even the most successful ones, are now started on the side. Today, it’s easier than ever to validate your idea with a prelaunch and quickly start up a subscription business that turns a profit.

Best of all, because of the standardized customer experience, purchasing and shipping are predictable and customer service is simplified – all you need to focus on is the fun part of choosing what you’ll offer subscribers.

By lining up suppliers, planning and understanding how to finesse pre-launch publicity, you can get a great idea boiling over before you’ve ever spent a dime. And best of all, you’ll require very few subscribers to turn a profit, since projecting your box demand means you’re only ever buying what you need.

While technically this model has been around for centuries, it’s only recently become possible to start a subscription business with such low initial outlay and minimal time investment. That’s because you can connect with customers and suppliers easier than ever before, virtually sample the merchandise, and make and automate payments.

Plus, what makes it such a great side hustle is that with just a few smart choices at the outset, most of the “work” is also the fun part: Choosing what you’ll offer your subscribers every month.

What Could You Offer?

Because your subscriber list can start so small and still turn a profit, subscription boxes have a growing reputation for incredible specificity.

For instance, GHOST Spice Supply sends a monthly selection of small-batch spice blends along with some meal ideas and recipes, while Wrestle Crate sends a monthly box full of professional wrestling-themed t-shirts, toys, autographs and other goodies.

Case Study #1: Hustle & Grind

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The Side Hustle Show recently featured Ross Simmonds, who co-founded Hustle & Grind, a coffee subscription box for entrepreneurs, as a side hustle from his consulting business. His partner Findlay Hilchie’s Reddit post about the launch is another excellent resource and a neat story, with a detailed roadmap of their first six months.

WHAT THEY DID RIGHT

  • Like many successful subscription service geniuses, the men behind Hustle & Grind knew exactly what their target subscribers wanted in a subscription. By taking their passion and understanding their own needs as customers first, the H&G team was able to create the perfect mix of style and necessity for a winning subscription box.
  • Canny use of third-party companies for box design and printing, free apps for infrastructure and logistics, and forming early partnerships for site and branding design show that smart planning can put those early days to use. A great side hustle uses every advantage it can get, cutting corners without cutting quality, moving fast and picking the right partners and freelancers to outsource the speedbumps. Why reinvent the wheel when you can pay someone on Fiverr or similar sites who’s already a pro.
  • H&G’s greatest weapon, though, is probably their use of social media. By studying and understanding the best ways to use Buffer, Latergram and other social free scheduling apps, the team was able to supercharge the use they were getting out of Google Docs and Sheets, Slack and Basecamp for team management, and their merchant account with Cratejoy.

Case Study #2: BattlBox

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One well-known side project, the BattlBox, famously outgrew its part-time hobbyist roots to become a full-scale operation.

Outdoorsman Daniel Dabbs took his love of camping, hunting, and survivalist gear, and turned it into a four-tiered subscription service (the highest tier includes a Knife of the Month!) with two spinoff subscription boxes and fourteen employees—and the original team is currently transitioning out of their old jobs and into full-time work on this one-time side hustle.

WHAT THEY DID RIGHT

  • They weren’t afraid to price high for premium merchandise: Many merchants fall off here, misjudging their margins or underestimating what the market will bear.
  • They dynamically responded to customer needs: BattlBox designed their fourth tier after a few months of rapid growth revealed that most subscribers wanted the most expensive available version, every month.
  • BattlBox continually updated their approach to shipping, pricing and the rest: They understand that optimization goes beyond “best practices,” and never stops changing with the market as new opportunities arise.
  • They did in-depth pre-launch research: By getting in the heads of their target customers, they were able to find out what products they’d love and anticipate questions. In addition, they mapped out their entire workflow from procurement to delivery, forming strong relationships with vendors and coming up with a strong design and sense of branding.

These were all pieces of the puzzle BattlBox considered before sending out their first invite. It formed a foundation for all the success that followed.

Case Study #3: Fandom of the Month

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Another side hustle success story is Fandom of the Month Club, originally just a small home project in Omaha that packages 3-4 jewelry items inspired by geek-favorite television shows, comics, and video games with custom art and magnets every month. The subscription service quickly became so successful it spun off into Flitwicks, a non-fandom jewelry subscription.

WHAT THEY DID RIGHT

  • A descriptive, easily understandable name means they show up at the top of search results, giving an authoritative feel to the subscription business.
  • Simple, attractive store design and an understandable concept gives you exactly the information you need upfront, which helps with conversions.
  • The niche market this monthly box has targeted: Women (mostly) who are science fiction and fantasy fans, an overlooked and underserved population.
  • Expands the entertainment merchandise market beyond t-shirts and mousepads and into jewelry, other sizes and styles of clothing, and so on.

Next Steps

While the initial outlay and time management are negligible for starting a subscription business, the rapid growth that’s possible can come with its own challenges. For example, finding a place to store your stock once the orders outgrow your workspace is the most common complaint. (But any of us would count ourselves lucky if the problem with our side hustle became too much demand.)

In the meantime, here’s the best way to get started:

Your Turn

Excited about this side hustle business model? What market would you consider serving with a subscription box?

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1 thought on “The Ultimate Side Hustle: Starting a Subscription Business

  1. I’m seeing a lot of people start something similar but not with physical subscriptions, but articles or newsletters.

    Case in point….dennis becker earn 1k a day has it set up where he has a small website where he hosts articles that either he has written or he has purchased and allows readers to download them from his website.

    Another person has it where he has no website just a landing page and he sends you articles monthly for a 10 a month charge.

    Thinking of doing that in the relationship niche and using Reditt, Facebook and other social media channels to drive traffic

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