Subscription based businesses are a great business model for service selling businesses. It makes the idea of purchasing seem cheaper, longer lasting and more worth the effort of buying in.
As The UK’s no.1 Ecommerce Platform, we need to keep up with the times and help out small businesses where we can, so we are rolling out a subscription service add-on for our online platform customers to utilise. Take a look here.
But is it really that big of a deal, or even worth going to the effort to use? Here are 5 examples of Subscription based businesses that have been successful over the years.
Huel are a nutrition focused business who sell products that are healthy, environmentally friendly and affordable. Their goal is to make a meal that is for the on the go, fast-paced person who cares about their own nutrition as well as protecting the environment.
Here is what they have to say on their product
“We are here to change the way people think about food,
In short, we need food that prioritises nutrition, does not generate lots of waste, and has minimal impact on the environment. But we also need it to be convenient and affordable.
We believe Huel can be a solution to this problem
Huel is nutritionally complete, which means every meal contains a balance of protein, carbs, essential fats, fibre, plus all 27 essential vitamins and minerals, and phytonutrients.
Huel has a long shelf life and uses very little packaging, so it creates minimal waste. Because Huel is plant-based, it has a much lower carbon footprint than animal products.
Plus, Huel is low in sugar and lactose-free (in fact it has zero animal products). It contains no soy, GMOs, or palm oil, and it is affordable. Starting at only $1.51 for a 400-calorie meal, it costs much less than a latte.”
Enough on that, what’s their business model? Well, Huel offers a variety of packages but encourages you to create your own bundle to suit your health/fitness goals. The bundles they offer must have a minimum of three bags (One bag includes seven meals) so for the “Hot and Savoury” products you need to spend a minimum of £74.96. This is a good business model as they let you know how much each meal costs after you see your total. This lets the customer see that it works out cheaper than going to the shops like any other normal month.
Spotify is one of the best known companies in the world for their music streaming service, but how do they make their money? The artists must be making it all from the streams they bring into Spotify right? Correct but it’s a smaller amount than you’d think.
Spotify is technically a free service as you can listen to music with ads for free. However, Spotify, just like youtube, makes using the platform without paying monthly a much less enjoyable experience.
This subscription service is cheap and removes hassle that would not exist if you didn’t start listening to Spotify in the first place – quite ingenious actually. At £7.99 a month in the UK, Spotify increased its annual revenue by 22% in 2021 to €9.66 billion. It has tripled its revenue in the past five years.
Craft Gin Club first became well known after their appearance on Dragons Den, with the idea to receive a gin box once a month for a monthly fee.
Here’s how they describe it – “Every month, we select one very special bottle of gin, including rare and exclusive editions not available elsewhere, and send it to our members in a treat-filled Gin of the Month box.
Over the course of a year, our members usually discover six gins from the UK and six from the rest of the world!”
This type of product being sold via subscription is interesting because gin is usually a “ooh I’m in the mood for that” kind of purchase costing anywhere from £15-£30 from your local shop. Rather, Craft Gin have upped the quality of gin and the desire for it that their target audience has. It also appears as a bargain since you would usually spend £15 – £30 on your standard Gin but for £42 per monthly box which includes a new gin and all the addons your average gin drinker could dream for.
This one’s a little bit different, Hasbean supplies specialty coffee for you on your request, the right roast, flavour, country of origin is completely up to you. You can subscribe to this service for a monthly delivery of your favourite coffee bean.
Their service completely tailors to you and your coffee preference, they even have a “find my flavour” quiz in case you’ve never tried their coffee before. A great personalised model for a subscription-based business.
This is what they have to say for themselves;
“We’ve always gone the extra mile to bring new coffee experiences to our customers. The coffee world can sometimes feel a little complex, but we pride ourselves in making specialty coffee enjoyable for everyone. Whether you’re a connoisseur or newbie, a single origin expert or a blend enthusiast, we’re always here to share the wisdom we’ve gained over the past 20 years and help you discover new coffees and classic favourites along the way. “
Clearly they care about their product, customers and their effect on the environment. Their package is quite simple as it is just coffee beans, but the beans are where the simplicity ends as you can choose from their wide array of coffee beans from all over the world.
Harry’s is a shaving brand that offers a monthly subscription for shaving equipment ranging from £19 – £50 per month.
Harry’s is another different, yet useful subscription service as you wouldn’t think about ordering a steady amount of shaving cream until you realise how much you use. Now if you’re unlike me (I can’t grow a beard to save my life) you may need a can of shaving cream and new blades every month, this saves you the pain of having to go with a scraggly beard for a few days as your delivery will arrive on time every month. If you haven’t had too much experience with shaving, they will send you a trial kit for £3.95.
In conclusion, these 5 examples prove that the service/product you sell can more than likely be turned into and promoted as a subscription service, even if it’s a physical product. All you need to do is create consistent demand for the service, drop the price compared to the standard package as it will appear as more of a bargain. You can also mess around with prices, packages and free trials if your business can afford it. So from these examples, try to decide if you think you can give it a try.