Start a Subscription Business

About 6 months ago, I launched a subscription service called Prospurly. For $44.95/month after a coupon, subscribers receive 6-8 full-size, artisan products from small businesses and passionate modern craftsmen.

I’ll be honest with you: this is not a full-time gig. In fact, I generally spend less than 5-10 hours a week running this business.

Despite the small time commitment, Prospurly has already grossed over $52,000 and is on track to take that to $60,000+ at the end of this month. On average, the business is making about $8,000/month in recurring revenue with a 20-35% profit margin, depending on purchasing:

Prospurly Historical Financials

Historical financials, ripped from Stripe. Period represents 3/9-9/9.

Customers are happy, churn is easy to manage (8-12%), and we’ve partnered with dozens of awesome small business while also donating to great charities. (In fact, we’ve planted over 2000 trees, helped protect clean water, and worked with a few great local nonprofit organizations.)

Prospurly Charity Partners

^ Instagram posts of our charity efforts. (And yeah, that’s a Mark Ruffalo tweet). 

So, how did all of this come together?

Step 1: I chose an idea.

The first step began about 2 months before I collected my first dollar.

Back in January 2015, I started thinking about how I wanted to learn the Cratejoy platform. I’d been involved with subscription commerce since my days as a founder of Conscious Box (started in 2011 in a tiny single room office with beds installed above our desks), which was originally held on a static site, then moved to Magento. After Conscious Box, I helped start a slew of other subscription business, which mainly used integrations with Chargify and WordPress.

Cratejoy was a new “all-in-one” platform, which intrigued me. Customer information, creating subscription products, one-time purchasing… all in one? I wanted to give it a try.

So I brainstormed. Why not start something new using Cratejoy?

I had never started a business alone. It was a scary, but exciting, thought. Questions started pouring in my head.

What interest would it serve? What would the curation look like? What would be the niche of the business?

I knew two things from the start:

First, it would involve natural products sourced from small, local businesses. My parents have been small business owners, environmentalists, and avid about conscious living their entires lives, which has served as a great source of direction for me (in both life and business). 

Second, it would not deal with product sampling. This likely meant that I would be purchasing products.

While the juices were flowing, I was still struggling with the true inspiration for the project.

Then, one day, while reading ‘The Consolations of Philosophy’ by Alain de Botton, I struck up a train of thought inspired by Epicurus. As de Botton explained, Epicurus was a far more modest man than many presume him to be. To him, happiness as an ‘acquisition list’ was actually quite simple.

No large villa was needed, no expensive foods or drinks were necessary, and no fanciful luxuries. It’s nothing like the modern understanding of ‘epicureanism.’

^ That guy is Epicurus. 

Rather, to truly be happy and experience pleasure, all one naturally needed was flavorsome food, good friends, and an analyzed, thoughtful life.

Despite being in a marketer’s position, which in some ways ran contrary to Epicurus’ fundamental message, I was inspired by the simplicity: food, friends, and thought.

It’s here that I found the next nugget of inspiration:

I’d craft a subscription around living a life not just directed at happiness, but a life directed at prosperity.

After a few sessions of playing with names, ideas, and synonyms, I’d ended up with Prospurly – a play on living “prosperly”:

 Prospurly's Beginning on Paper

^ This is the piece of paper I was using when I came up with the name. 

I really liked it when it first came together on the page. It was short, felt clever, and it intrigued those around me when I pitched the idea. It was also fun to say.

More importantly, there were very few subscription businesses already started in the area of “small-batch, artisan lifestyle products for bath, body, and home.” It was something of a Crate & Barrel meets subscription boxes meets living well and subtle philosophy.

The idea felt awesome. I loved the direction, the name, and the implications that the niche would have on the business (like making regular donations to charities, as shown above).

So the idea was there: a natural lifestyle brand inspired by the experiences and simplicity of a happy life. The subscription would deliver the so-called “ingredients for a happy life,” the items and ideas that cultivated a life much like the one I thought Epicurus might’ve imagined, with a bit of an artisanal touch.

Step 2: I kicked off with a prelaunch.

Personal excitement aside, I needed to make sure that Mom wasn’t the only one that thought this idea was good. I wanted other people who didn’t know me at all to tell me this was something they’d pay for.

So I decided to run a prelaunch email gathering campaign.

A pre-launch email gathering campaign is a strategy used to test the market’s response and build initial buzz around a product. When it’s done right, you’ll have hundreds or thousands of emails from interested people, who will become your early customers should you decide to launch your product.

This is not hard to do. There are tons of prelaunch platforms to choose from.

For me, I chose to set up a Launchrock page. It was a simple platform, easy to customize, and had templates that looked good. It made gathering early emails and testing messaging, colors, and offers easy while I built the rest of the business:

Prospurly Launch Rock
^ This was Prospurly’s first landing page. 
I kept it simple.

I took a picture of a few items I thought would fit the niche, with a orange colored paper background, snagged from my local art shop. The goal was to keep the page bright, colorful and effective at capturing the “sunny” spirit of the business.

Next, I began building out my social channels, which would serve as my primary sources of early traffic. I started with the simple ones: Facebook, Twitter, Pinterest, and Instagram:

Prospurly Social Media

To get these in front of people, I used the basic (and free) functions of these social media channels. I used hashtags, I invited friends and family to Like and Follow my channels, and I interacted with other users, by liking their posts, following them, sharing their posts on Facebook, and staying active with comments.

I also spent a lot of time on Instagram, building out ideas and testing branding:

Past Prospurly Example Posts

My prelaunch campaign ran on one thing: the natural reciprocation of social media users. I liked photos, they liked mine. I followed them, they followed me. It created momentum, the perception of authority, and helped me push traffic to my landing page.

And yes, early posts jumped around with branding, fonts, and wordings. Frankly, I was learning the ropes of actually applying creative design. (While I’ve been “creating” these for years, I’ve never actually been the one to hold the pen in Photoshop.)

Was I some experienced designer? No.

Had I ever launched a business completely on my own? Nope.

But the tools were there. I watched Youtube videos on design, scoured the internet for guides, and made a point to post a few times a day on my channels, openly asking people their thoughts. Slowly, things evolved and began to take shape.

Alongside learning the creative process, it was in this stage that I began to work out other customer acquisition strategies:

  • I brainstormed a blog called “The Prospurly Post,” which just became live in July (good for SEO purposes and organic traffic).
  • I began contacting bloggers, reviewers, instagramers, and other social influencers I planned to reach out to and offer a box
  • I began identifying niche-similar publications/pages that I might be able to trade exposure with
  • I started watching videos on Facebook ads and asked friends who had seen success for tips
  • I snagged a Google ads credit and planned an early campaign

Early on, the prelaunch began to get some traction:

Prospurly Prelaunch

^ The result of the prelaunch.

Over about 12 weeks, the page saw the following:

  • 2679 total visitors

  • 209 total shares

  • 597 total signups

  • Total Conversion Rate: 22.28%

  • Total Share Conversion Rate: 7.8%

For a total of almost 600 presubscribers and a conversion rate of 22.28%, I felt AWESOME. (One Quora reported that most people see between 9-11% conversion rate, with the occasional answer in the 20s and 30s.) Most of this traffic was from social media, so the early design work I played with felt validated – it piqued interest and pushed qualified traffic to my landing page.

I made a point to keep the list “warm” over the weeks, sending out updates and sneak peeks. This was a big asset for the launch, and I hoped it would yield a strong customer base. Here’s an example, we had a sneak peek of the types of items subscribers could expect:

Prospurly Sneak Peek

Step 3: While prelaunching, I developed tools.

From past experience, I knew I needed to spin up some foundational tools for the business before I reached my official launch, namely a CRM to keep track of merchants, a customer support platform, accounting software and cash planning, and an appealing invitation for brands.

But wait, Jesse, what even is this stuff?

  1. CRM: This stands for a Customer Relationship Management tool. It’s like an electronic rolodex. It’s super useful for keeping track of vendor partners (not subscribers) when “sourcing,” aka the continuous process of finding products for your box. You can catalogue leads and add notes, along with a bunch of other cool features. Part of running a subscription business means servicing brands, and CRMs make it simple(r). 
  2. Customer Support Platform: It’s a waste of time to deal with support requests in a regular email client (like Gmail or Hotmail or whatever you normally use). These platforms take emails from a support address and feed them into a system where you can apply tons of features to speed things up.
  3. Accounting Software: If you’re starting a business, you need to keep your books straight. This means reconciling transactions in your bank account and accurately measuring expenses, revenue, and profit.
  4. Cash Planning: Outside of accounting software, using a cash planning spreadsheet makes projecting much easier. This is done within Excel, and you can use templates, like Cratejoy’s budgeting tool.
  5. Brand Invite: Brand invitations are PDFs that you attach to your sales emails. They quickly provide vendors with more information without you having to type it out. Like the CRM, these are useful when servicing your second type of customer: brands.

So let’s jump into it:

First, the CRM. I decided to use Solve360. I’ve seen this CRM in action, used it before, and it fit in my price range, so it felt like the right choice.

I kept the entry process simple: basic company information, tagging based on product category and location (I try to mostly source local), and notes for when I contacted someone or received replies. I also learned how to use other features, like scheduled emails and events. After finding businesses on Etsy, Google, or at my local stores, I’d enter them in:

CRM Contact Page

^  CRMs make it easy to track emails, replies and procurement progress. 

The first month, I added about 150 qualified leads. These were businesses who fit the niche and had applicable products. As part of this, I decided a theme for my first box – “Awake with Spring” – which was general enough to fit many types of products. When it came to choosing products, all I needed to do was ask, “Does this fit a spring/awakening theme?”

Next up, customer support. Even though I didn’t have customers yet, I was getting inquiries from potential customers. I also knew that setting this up ahead of time would save me time down the road.

For the platform, I used Zendesk. It’s affordable and has easy-to-develop tools, like macros, triggers, and automations. (I currently have one person managing it, and it usually takes less than part-time.)

Zendesk Screen Shots

^ A quick illustration of a basic Zendesk setup. Little things save a ton of time!

For accounting, I’d be using Xero. I rarely “owned” this task in past ventures, so this took a bit of learning.

To keep me crisp on the process, I set up a weekly reconciliation meeting in my Google calendar. Every Friday, I start my day by linking up transactions from my bank account in Xero. This makes taxes, cash planning, and keeping my books straight much, much easier. You can also create rules in Stripe, which makes reconciliation faster.

Xero Reconcilation Example

It was also at this point that I really started to drill down on pricing and the unit economics of the business.

I began by assuming a pricing scenario that allowed me to purchase slightly below wholesale. To start, most businesses will offer products for bulk orders at wholesale, which is usually 50% MSRP. Wholesale is rarely (in my experience) a negotiation, too: all you need to do is ask. From there, I took the total MSRP I wanted to see in the box, and worked backwards to find my budget for products. I assumed average prices (like the one’s you can find in the Subscription Business Calculator at Cratejoy), and made a projection:

Prospurly Financials

^ My early cash planning (mostly accurate) based on my assumed business’ unit economics.

After adding a few dollars for shipping, packing, printing, and services, I had a cash planning worksheet I could use alongside Xero.

The final item on my list was building out a sales deck – a PDF with basic information about Prospurly and reasons why brands should join. Sales materials are helpful because they allow you to keep intro messages short – just a few lines asking about product availability and wholesale cost. If a merchant is interested, they already have a resource to read over. This also helps add a level of professionalism to your business, which always helps during negotiations.

Prospurly Business Invite

^This is the top fold of the Prospurly business PDF.

From there, I enlisted the help of a local developer to customize my Cratejoy website a bit. To find him, I simply posted an ad on Craigslist. It took me sorting through about 5-6 people, but I eventually found someone with a decent portfolio and super competitive rates ($35/hr).

For the work, I knew I wanted to add more dynamics to the page: a few sliders, a custom pop up (I use Opt-in Monster), an Instagram slider, a better footer…you get the idea. I didn’t spend much – about $200 for the work.

Here’s the evolution:

Prospurly Site Edits

(Some of these are featuring newer photos I took after the launch and first 2-3 months) 

When it came to spec’ing this all out, it was pretty simple.

First, I made a mock up in photoshop that looked exactly like the above. I took a screenshot of my current website, moved things around, added in exactly what I wanted, and added red arrows, just like you see above. Because I have worked with developers before, I knew I needed to draw this out, not just explain it in text.

Next, I listed out specific directions to the developer. This didn’t mean I wrote the code or made specific code related suggestions (after all, I’m not a developer). Instead, I wrote out the changes I made in picture form in an itemized list. Here’s an example of some early requests I made:

Sample Developer Text

He’d make an update, I’d check it out, and he’d add more changes if I had any. We also collaborated a bit on what he thought would look good.

In addition to the tools and website, I had also been designing custom boxes. This was probably the most tedious and time consuming process of my launch, since I had literally never opened Adobe Illustrator (the program I used to hold the pen on design) ever before.

Here’s the rough order of operations I tackled:

  1. I decided a box size. I wanted to ship in the USPS cubic .2 range, and I maxed out the size possible for that. You can go with a “standard box size,” which a box manufacturer can suggest to you (as they have different standard sizes manufacturer to manufacturer), or you go with a completely custom box, like me. This means I’d have to buy dies (for cutting the cardboard) in addition to the plates (for the custom colors). (Ps. You can use the Cratejoy Shipping Calculator to learn more about cubic pricing)
  2. With a box size decided, I went to local box manufacturer NW Paper Box to talk about type of cardboard and pricing. I had used them in a previous venture, Escape Monthly, so I had rapport with them. (If I didn’t know them, it’s as simple as making a cold call and setting up a meeting to talk about needs).
  3. I decided to go with a kemi or “white top” board, so when I printed orange ink on the box, the background would be white
  4. I spent a few dozens of hours on design, usually iterating 2-3 times on each version. I applied subtle changes and focused on refining my skill set early on. Once I felt comfortable, I’d work on adding more unique design elements.

For the template, I simply grabbed a blank box design from online. You look closely below, you’ll see the actual dimensions of the box outline changed twice before landing on the correct size. In this final case, I was provided with an Illustrator file from my box manufacturer. Here’s the initial template I used:
Box Outline
With my hands on a template, I began working on the design:

Prospurly Packaging Evolution

 

(You can click to enlarge, then zoom for better detail)

After design was decided, I put the order in for a few thousand boxes.

NW Paper Box would then split payments for creating the custom plates and dies, and I would use the boxes as needed each month, while storing the excess in their facility. Splitting payments, with 1/3rd of the total plate and die costs (about $700 each payment) paid over the next 3 months, helped cash flow during the early months of the business. Paying for boxes as needed also helped smooth out COGS.

With a decent site in hand and custom boxes on their way, it was time to launch.

Step 4: Launch time.

Weeks of work lead to this.

I had no idea how the early adopters would come in, and with the investment for custom boxes, I was starting to sweat about expenses (I was about $2000 in, which included boxes, services, and everything else).

Fortunately, the first box came together nicely:

(The first ever printed box)
The First Prospurly Box

(Inside the box) 
March Prospurly Box

I was confident once people received it, the momentum would be on.

I started with a countdown on social media. We were giving away boxes, doing shout outs, and working hard to interact with the community online. We did this across all our social channels. Here are some examples from Twitter:


Twitter Examples
 

We also led a countdown on Instagram everyday before the launch:

Prospurly Launch Countdown

(We went with a cutesy, orange fox oriented countdown)

I also sent updates to the leads lists, which was now at its fullest. I scheduled 4 emails for the week of the launch for my leads list. The emails would go out every other day leading up to official opening of sale. They followed basically the same verbiage in each email, and looked like this:

Prospurly Launch Email
Within the first day, we saw results. For starters, the emails saw decent open/click through rates:


Early Email Results
 

Social media was also abuzz, and we rocked a few of our simple promotions:

  • We had been holding a contest for a lifetime subscription, which people entered via presubscribing on our launch page. It was easy for people to enter: all they had to do was just presubscribe on the launch page. I would then random choose an email from the list, contact them, and announce them on social media.  After the launch, we announced the winner and got some decent sharing for doing so.

Lifetime Subscription Example

  • During the launch month, we ran contests for reposting our photos and tagging friends for chances to win one-time boxes.

Prospurly Contest Examples

  • We released a special coupon for “founding members” – aka our first customers – for 10% off for life + a bonus in their first box.

In the first 30 days, I sold over 120 subscriptions and grossed a little over $5,600 – more than enough to cover products, shipping, and start paying back the investment I made for custom boxes (which is completely optional, but I think very valuable).


First 30 Days of Prospurly Revenue

(From Stripe, 3/9-4/9. This does not include the first re-billing, which occurred on 4/10 the first time around). 

Considering that I’d been working full-time, exiting another business, and was basically a novice on most of the early operations, this felt like (and was) a huge launch. I was super happy with the results, and best of all, this gave me a platform for a highly sustainable, rewarding business.

Now it was time to grow.

And grow we did.

In the last six months, we’ve effectively doubled in size, grossing about $10,000/month with about 200-220 subscribers. On a monthly basis, that comes out to a 10.14% growth rate, on average. In other words, by dedicating just a portion of my schedule, I’ve been fortunate enough to capture back the number of churned customers each month, plus track down some additional customers. To date, I’ve never netted a negative number of customers, ever.

Step 5: Keeping at it.

These days, I’ve templatized the business enough that the little down time I do have can be spent thinking of new ways to get customers. While I don’t “need” to work everyday, my daily schedule is mostly focused on procuring the next month’s products, tinkering with emails, and improving my skill set on core tasks.

One example is with branding and general creative skills:

Prospurly Branding
^ Good example of how I grew with my business. Cleaner, better performing branding. 
True, my branding and creative skills still have a ways to go, but it goes to show you how much one person can improve with a little concentrated effort.

And this was true across all operations.

  • Procurement has become easier: Prospurly has worked with dozens of local companies and artisans across the US, and people are taking notice. We’ve been featured in a few decent sized publications and online outlets, like Buzzfeed, and work with dozens of social influencers a month. This adds a really unique marketing perk to our business for brands.
  • The sales deck has improved: I’ve redesigned it, added more features, and profiled more brands. This makes for a more compelling pitch to my partners and helps speed up conversations.
  • Accounting is Quick and Easy: With Xero and a cash planning sheet in Excel on lock, I can quickly budget and forecast growth, making this once scary operation simple and manageable.
  • Shipping is a 60-minute task: With Cratejoy’s platform and easy-to-manage batch shipping, this operation boils down to a 60 minute or so task each month. I send a PDF right to my fulfillment partner and never have to worry about labeling, packing, or shipping boxes.
  • Social Media is Growing: With over 5000 people across channels, social media is gaining natural momentum and requires less work. People are more inclined to repost photos without us directing them to, because they see so many people already do it, every month.

So what about financials? While I have decided to reinvest as much capital in the business as possible – a decision that’s delayed my total payback amount, leaving me technically in debt – I have been able to pay friends and family members for work, ultimately giving myself greater control of life and more importantly, a better quality of life. At any moment, I can easily scale back spending and decide to put money back into my own pocket.

The financial security this offers is extremely stabilizing and rewarding. I can start taking a few grand a month if I’d like, and in a year’s time, it will likely rival the pay of my full-time job. In a year and a half, I could be looking at nearly a six-figure salary from something that requires only 40 hours of work a month.

In all this, the first lesson I learned as a student of business remains true: trying to run a business (mostly) alone is difficult, difficult work. Ignoring the actual tasks you need to execute, the mental and emotional commitment it demands is nothing short of extraordinary. It’s a test of your hard work and your willingness to accept failure.

But it’s possible. And by following the model I’ve presented, chances are you can develop something similar with a bit of hard work, time, and a dose of good luck for measure.

To see the continued evolution of the business, check out Prospurly.com.

Now, I’ve got to get back to work.

Jesse Richardson Founder of Prospurly

You can also keep up with Jesse at his blog, jesserichardson.com.

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Jesse Richardson

Customer & Community Guru
View all posts by Jesse Richardson

jesserichardson.com

Jesse Richardson is an author and co-founder of several successful subscription businesses. He focuses on developing powerful customer support systems, engaging content with measurable results, and building cohesive teams that drive growth and inspire positive company culture.

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87 comments

  • I don’t often comment online, but what a comprehensive, well-thought out, and valuable contribution for both novice and experienced subscription box entrepreneurs.

    I have bookmarked this page and will be referring back to it often!

    Kind Regards,
    SL

    • Hi SL,

      Thanks for your comment – I’m really glad you found this post helpful!

  • Well written, inspiring, and very useful. Straight into my bookmarks – will use for future reference.
    I’m in a similar position as you were when you started Jesse, so this is very very helpful indeed.
    Thanks!

    • Hey Arnold! Very happy to hear it was useful for you. Best of luck with your business!

  • Another amazing article Jesse. Thanks for sharing your knowledge and tips with the community. I’m nearing the launch of my own subscription box company and your information has been invaluable in getting this far. You should consider coaching or mastermind opportunities around subscription box businesses. I’d definitely be interested.

    Many Thanks again,
    Marcus

    • Thanks for the suggestion, Marcus. I really appreciate your feedback and I hope your launch goes off perfectly!

  • GREAT ARTICLE!! Really enlightening post. It’s pure gold. I have a couple of questions:
    1. When you are going on you own, I feel like it’s a little overwhelming because there are a lot of important tasks to do, you are the only one who can do it, how did you prioritize?
    2. How did you know which tasks to do by yourself (even if that implies learning how to do it first) and which tasks assigned to another people (and pay them for it)? For example, I have no skills on Design, should I learn how to use Photoshop to do my logo and creatives pieces? or should I ask a friend to do it for a good price? That kind of situation is happening to me a lot, not sure how to decide what to do.
    Thank you so much! I have subscribed to your blog and social media channels.

    • Hey Astrid!

      Thanks so much for the feedback. I really appreciate that!

      1. It was tough, but I knew there were some key parts to my launch: finding customers and providing the customers with a great product. Box design, designing emails, perfecting the website – that was all secondary in this frame of thought. I made sure procurement and my soft launch went well before anything else.
      2. I am a very curious person always looking to learn new stuff, so this question is tricky. If you feel confident/willing, tackle it (or at least try). If not, you can probably find a good freelancer. Design was very hard for me (lots of hours spent here) and even today I’m considering getting someone to revamp my website professionally, to optimize conversion rates.

      Thanks again, Astrid!

  • Hi Jesse!

    Thanks for sharing your experience, very inspirational!
    I was wondering, what program did you use to create the email you posted leading up to your launch as well as the instagram post for your June Sneak Peak?

    Many Thanks!

    Kelene

    • Hi Kelene,

      Thanks! I use Mailchimp for emails and Photoshop for creative design, like sneak peeks, etc.

  • Hi Jesse,

    I have just come across your article. It is great. Really, really helpful and informative. I am planning my own subscription business that will sell mainly digital products and your article has so many great tips. So glad I found it!

    Keep up the good work!

    Pia

  • Hey Jesse,
    Thank you so much for sharing your inspiring experience.
    I am a brand owner of a natural and organic skin care. We would love to work with Prospurly. Where do I get more info about becoming a merchant for Prospurly.
    Best,
    Leigh

    • Hey Leigh! Thanks for the interest. You can reach me at jesse(at)prospurly(dot)com – I’m happy to chat!

  • This is incredibly helpful thanks for sharing! I am starting up a new subscription box and am finding it very difficult to try and predict how many subscriptions might sell, have you noticed any trends in sales? Do you tend to get a peak at launch and then a plateau thereafter?

    • Regarding the plateau: Not at all. It’s very common to continue to grow a lot after your launch, and this should be your goal. It just matters how much time you put into it. If you’re working on customer acquisition constantly and making sure you never churn more customers than you gain, you can grow quite quickly.

      For initial sales, I’d expect around 10-15% of your launch list to convert. So 1000 pre-subscribers = ~100-150 customers.

  • hello Jesse I am in the process of creating a subscription business I would like to aks you ? how many boxes should I make for the launch ?

    I am thinking of creating 500 to 800 boxes do you think that is to much ?

  • I’m not in the subscription box business, but this is a very thorough and inspiring post. Thanks, man! And congrats on your success.

    • Thanks, Shawna! Glad it was useful 🙂

  • Can you further explain your fulfillment partner’s role in shipping?

    Can you explain who your fulfillment partner is? Is that like fed ex or ups?

    • Hey Jason,

      Sure thing. I’ve slumped both of your questions into the one comment:

      1. Their role is mostly simple: they print the boxes, pack the boxes, print the shipping labels, and schedule a pick up from the USPS.
      2. My fulfillment partner is NW Paper Box, who’s based out of Portland OR.
      3. Fedex and UPS would be my shipping providers (not fulfillment partners). They don’t do anything for me besides pick up and drop off mail per usual.

      In other words, my role in shipping and fulfillment is as follows: 1) coordinating with brand partners regarding delivery address (NW Paper Box’s address) & timing of their shipments, 2) purchasing shipping labels for customers (I ship via USPS), and 3) providing an electronic form of the labels to be printed (ie. a PDF) by NW Paper Box, who then prints them and sticks them to boxes.

      Hope that helps!
      -Jesse

      • Hi Jesse. Awesome write-up. Very inspiring. For the fulfillment partner, I know you have worked with them before, but what volume did you have to get to in order to make the cost per box affordable? Are you able to share the cost per box for fulfillment?

        Thanks so much for your time in sharing this great info!

        • Hi Kim,

          Thanks for the comment!

          I started fulfillment at launch, and it was for 150 boxes. The partner I work with doesn’t have minimums, but they are charging a “line setup fee” now for $250. I feel like that’s very high. To make that worth it, I’d suggest waiting until you have 300-400 boxes/month, depending on your margins. It’s priced per touch, so costs vary (ie. 5 items vs 10 items in the box), but generally expect $1-$1.5 to be spent on the packing + the setup fee + any extras you need (packing material).

          Hope that helps!

  • Hi Jesse, I’m just interested to know what was the cause of the spike in signups on the graph you have shown? It was generally consistent but then you got a huge 200 emails in a day or two…? Cheers

    • Great question. I really started pushing contests at this time, some early shout outs I lined up went up, and it’s was the whole “count down to launch” momentum I was trying to generate. I basically spent a lot of time working on social media.

  • Hi Jesse – great article, as everyone mentioned. I had a quick question about your fulfillment partner – NW Paper Box. If I understand you correctly, they pack all your boxes and just have USPS pick them up. Would you be willing to provide the typical cost of this service? How much per box? I’m trying to gauge my potential costs for a similar service. As someone who also works full time, I want to streamline everything I’m doing so its as efficient as possible.

    • Hey Nick,

      That’s right. It’s based on touch – so if I have 5 items one month, and 10 items the next, the price is pretty different. Roughly, though, it’s only about $1 per box to pack + $1-2 for the box itself. Coordinating the pickup is all part of the price. For 500 boxes, you might expect $1000 in fulfillment/packaging costs each month, assuming you have 5-10 items, some packing material, a packing list, and want the box taped and labeled.

      Hope that helps!

  • Wow! Thank you for taking the time to share your experience. I want to hug you! This article is comforting and honest. The pictures showing the development of your packaging and website are so helpful. I added this to my bookmark page. I hope you continue to have great success!

    • Thanks so much, Tamara! I really appreciate the feedback and good vibes 🙂

  • Ur website was very interesting for us. i’ll thank you you very much for sharing the awesome stuff!

  • Hi Jesse very inspiring story I have a simple idea for a subscription box. I am located in Ontario Canada and am currently scouting local artisans in my area. Are you in the US?

    • Thanks! And yes, Prospurly and I are based out of Portland, OR.

  • Jesse, I had to comment. Such a good post, so thorough. One point which I was not to clear about was your subscription growth rates. You mention you had 597 signups from your prelaunch, then you discussed that you had 200 to 220 subscribers.
    If it is not too bold could you give me an idea of how your subscriptions grew over time?

    • Hi Francois. Thanks a lot for the comment. And not too bold at all! I send boxes out to influencers in my space – bloggers, Instagrammers, reviewers etc. That coupled with lead capture via a pop up opt-tin + email marketing = slow, steady growth. Perfect for a side project, but both are two strategies that you can really ramp up and grow your business with.

      Thanks again!
      Jesse

  • I’ve never really left comments for most sites i’d visited but i’d make an exception for this one ! Such awesome write up. Comprehensive, clean cut- Love it !!
    -virtuallydebbie.com

    • Thank you so much, Debbie!

  • Hi Jesse,

    Thanks for putting together such a comprehensive post on what it takes to create and build a successful subscription box business. I have been working my way through all of the guides you have written along with Jameson and really appreciate the insight and clear instructions you provide.

    In particular I found this post a real eye opener on the importance of design. While I have run a few other businesses in the past I am approaching my next venture, Vita Box, with a much greater sense of importance on design and making sure there is a consistent brand image across everything we do.

    If you did have a few minutes spare i would love to get your feedback on my landing page (http://www.getvitabox.com.au ) Once I start taking orders I will be moving onto Cratejoy given all the great insight you have provided into the platform and its ease of use.

    Thanks again

    Paul

    • Hey Paul. Thanks a bunch for comment, and we’re glad all the guides have been helpful for you. Your launch page looks great – I like the flow for sharing too (I imagine it’d be perfect for mobile). How is it converting if you don’t mind me asking?

      Cheers,
      Jesse

      • Hi Jesse,

        Thanks for your reply and sorry I didn’t see it until now. I don’t think I got notified via email of the reply?

        I saw you had entered you email on our landing page 🙂

        We are directing traffic to the landing page via paid Facebook ads and are converting at around 20%. I’m continuing to try and find “free” traffic sources, however, the number of blogs and instagramers open to getting the world out seems to be a lot less than the US (based on case studies and anecdotal evidence).

        The one part of the funnel I am working on next is the “refer a friend” section. While we are offering 50% off the first months box + a kicker if you invite 3+ friends it doesn’t seem to be resonating as much as I hoped. I am going to test an alternative by offering a $ coupon. While the value will essentially be the same it will be interesting to see if people relate more to a $ discount, rather than a %.

        Thanks again

        Paul

  • Wow what a great article! I’ve had a few subscription ideas bouncing around in my brain and this feels like just what I needed to get started and understand how it can all work! Thanks so much!

    A few quick followup questions — How do you figure out how many products to source for the box each month? Do you often / did you ever have leftover or not enough product for the boxes? What do you do with the leftovers?

    Also, for fulfillment / shipping, do you use a fulfillment center and how is it working with them when you have different products coming in each month?

    Thanks again!! 🙂

    • Hey Miranda! Thanks so much, glad it was useful for you. Here are those answers:

      – Product sourcing is a bit of a guessing game. I purposely overshoot and plan to buy about 10-20 units/month over. This is good for customer service problem (rare) but mostly for press/pr I do using the box.
      – And to follow up, no, there are no leftovers, because I send everything to press people. Occasionally, a spare bath salt or chocolate bar finds its way onto my desk though… 🙂
      – Fulfillment is super easy. I use a company called NW Paper box. It’s touch-based pricing, so the more items/touches, the more cost is associated with it.

      Thanks again!

  • Hey Jessie. Great post. I was wondering what resources you used to get your hero banner done. I love your current site http://www.prospurly.com‘s hero banners. They’re well edited and contextual. I would like to get something similar done.

    Thank you!

    • Hey Jasper. Glad you like it!

      It’s actually built into the Cratejoy Theme I’m using, called Booksea. If you’ve already got a site up, check out called HelloBar.

  • Hey Jesse, I really appreciate your article it’s helping put me on the right track. I love your business, I’m very into conscious living! I’ve actually been trying to think of something to do with the boxes that I mail, like a way to entice people to recycle them or even mail them back for a discount. Mailing for a discount is all I can think of that is enticing but it would be too costly on my end. But that’s neither here nor there lol. My question is this, how do you factor in your donations to charity? Are they a flat payment per box each month? Also how do you decide what charities to work with?

    • Hey Michael! Thanks for the note.

      I calculate contributions from gross revenue standpoint: 2% of all sales during a 30 period or “month” (which based on my shipping/rebilling window, not calendar months) is donated, no questions about it.

      When choosing, I keep an environmental focus; by the end of February, we’ll have planted ~12k trees through Trees for the Future while also partnering with an org. called Friends of the Earth twice, Beyond Toxics once, and Water Defense once. Friends of the Earth protects pollinators, Beyond Toxics deals with environmental justice for rural and disenfranchised communities, and Water Defense does what it sounds like – protects water! I basically get to search around for awesome organizations, meet great people, and get to contribute some dollars toward it. It’s one of my favorite parts of the business.

  • Amazing detail and story I can relate to. Really appreciate you taking the time to write this, its restored my faith in self-employment because its so tough working alone.
    I hope to hear you grow and grow!

    • Thank you for the comment, Louisa. Glad to hear it was inspirational for you!

  • Hi Jesse,

    Thanks for the thorough sharing. Very insightful! I’m curious if you have ever been involved with a subscription box business which also offers other non-subscription items for purchase? (For instance, if the overall brand itself were to offer a subscription box line, plus a line of wearable goods or any other items of that nature – for individual sales.) I’m wondering if this approach would lack focus needed to drive sales… But maybe it could be a possible brand expansion after a couple years of successful growth from subscription boxes alone?

    Thanks again!
    ~Jessie

    • Hi Jessie,

      Yes, I have. My current business does occasional single item sales, as did both the other successful subscription businesses I exited. One (Conscious Box) had a full fledged eCommerce store with 100s of items. We push people from product samples to purchasing full size products as part of the business model. I think it’s the natural next step, but requires an awesome customer experience to make it seamless. Otherwise, you might grab a few sales but your subscription revenue will far outpace it.

  • HI Jessie,

    First of all, great webinar this week. Second, I’m about to start my sub business and i was wondering, is it ok to receive my product at home, assemble the boxes at home… do everything from home or should i be looking for a space to work from ?

    Thank you Jessie, have a good day.

    • Hi Samuel!

      Thanks for the comment. You can do everything from home – as long as your products are prepackaged and not being actually made in your house (then you need a commercial kitchen, etc).

      Hope that helps!
      Jesse

  • Hey Jesse – Reading the post for the second time (after 2 weeks) to deeply embed the learnings. This is like a holy grail.

    Could you shed more light on how things are organized on the back end..
    – Is your landing page on CrateJoy itself? (It is very customized.)
    – Which portal have you used to set up your blog?
    – I have read on the CrateJoy forum that it is more beneficial for SEO purposes to have the blog as a part of the actual website (www.prospurly.com/blog) rather than another pseudo-website (blog.prospurly.com). However, you have mentioned in your post “good for SEO purposes”. Is the blog created on Cratejoy too?

    • Hey Lucky,

      Thanks! Appreciate the compliment 🙂

      Sure:

      – The landing page was using Launchorck
      – I used WordPress on a subdomain
      – It is, but Cratejoy doesn’t have a native blog feature. Because of that, I had to create a subdomain to host WordPress. Technically speaking, this was an easier setup for me. Subdomains are arguably less powerful for SEO purposes, because they need to establish their own reputation and won’t rank as quickly as a subfolder (/blog), but again, it was technically and easier setup when using Cratejoy. It still benefits the domain and provides SEO benefit for my business.

      Hope that helps!

  • Wow! Did you delete my post? 😐
    I asked a question about your SEO strategy.

    • Hey Lucky,

      Nope! It should be above 🙂

      Jesse

  • Wow, you (if you haven’t already) should definitely launch a product on one of the crowdfunder sites. Great fun read.

    • Thanks, Roland! 🙂

  • I notice at the top of your page as incentive you have “join now and get 10% off…” If this page is solely collecting emails how are people “joining” ? does the page direct them to another page to submit actual payment information ? And lastly, while the splash page is up should the othe actual site be up and running accepting payments as well? I’m a little confused. Sorry for the long winded question.

  • I posted a couple questions they seem to have disappeared…Lets see.

    On the example you have as your launch page as incentive it says ” join today for 10% off your subscription for life” – now since this is just a page for the purpose of collecting email I don’t get how the incentive to “join now” works?!

    Is the page set up to collect actual payment in the background? or once email is entered are people re-directed to another page for payment?

    thanks in advance for your reply. love this post BTW.

    • Hi Farah,

      Your posts must be approved first to show up 🙂

      1. They’re joining the launch list!
      2. Once the enter their email, they are incentivized to share. No payment is collected. I then take those emails into Mailchimp and do email marketing to convert once the subscription is live.

      Let me know if this makes sense! Glad this post has been helpful for you!

      Jesse

  • Jesse, thanks so much for taking the time to write this. It’s incredibly useful to me as I get ready to launch. One quick question: Did you use a social media management tool during your launch? Do you use one now? Just curious if you have a recommendation that works well for a subscription startup. Thanks!

    • Hey Ellen,

      Thanks for the note. I don’t actually – I personally don’t like those tools that auto comment on posts. If you are looking for some, though, here’s a good piece to check out:
      http://profitfrominstagram.com/an-entrepreneurs-guide-to-generating-ecommerce-sales-from-instagram

      Jesse

      • Thanks, Jesse! That looks like a great article! I plan to pore over it the same way I did this one of yours. It’s fascinating to hear that you keep things organic (no pun intended!) with social media. I’ve spent a lot of time researching Hootsuite, Sendible, and other social media management tools but I don’t want to create unneccessary layers in my business either. Thanks for your insight.

  • What did you use to send your subscribers an email automatically after they subscribe?

  • Whats up! I simply want to give a huge thumbs up for the good information you’ve here on this post. I will likely be coming again to your forum for extra soon. Schayer

  • Hi Jesse,

    Great article…wondering if Zendesk is what you use to send your new subscribers the automatic welcome e-mail??

    • Hey Bailey,

      Nope! I used Mailchimp. Zendesk is for customer facing support request vs. email marketing.

      Jesse

  • Hi, very usefull article. I am curious about how you handled the taxes and invoices part of the business. I am from Brazil, but planning to launch a subscription service model in US. Can you provide more info about that? or point me to where can I find those info?

    • It depends on the state your business is incorporated in. You should determine where it will be located then get in touch with a local business attorney or CPA!

      Jesse

  • Hey Jesse great article! I have a couple questions about the fulfillment. I’m blown away on how you can run Prospurly while working full-time, kudos to you! I want to do the same, if possible… It seems like the best route is to do a fulfillment/packaging. My question’s are if I do decide on fulfillment/packaging how would I know my items are laid-out presentable and not dis-organize? Also, if I don’t go with the fulfillment route, would I save money doing it myself? Before reading your article, I was set on doing everything myself. I’m really looking for the best possible way to avoid stress and being able to keep my day job. Thanks in advance!

    -Jojo

    • Hi Jojo,

      Thanks for the note! Yes, if you’re trying to operate a subscription business with another job, outsourcing fulfillment is a great idea (not totally necessary, but a big time saver). Basically, I’d suggest thinking about outsourcing fulfillment around 250-500 boxes/month (depending on your pricing and margin). The cost runs about $1-2/box for fulfillment, but it can depend on what’s inside. This doesn’t include box or material costs – just putting the box together (sometimes called ‘kitting’). Some fulfillment centers charge a line set up fee.

      Getting started is pretty easy: 1) find a fulfillment center near you/where you want to ship from (I’d suggest NW Paper Box or Kable, both listed on the resources page along with a few others) 2) Reach out 3) Ask them what their fulfillment pricing is – be as descriptive as possible, and tell them approx. item #s, if you have special packing material, etc, so they can provide the most accurate quote. If you plan on having inventory there, ask about pallet storage costs.

      If you launch with a big splash, I’d definitely encourage outsourcing fulfillment. If you can be scrappy for a few months and do it yourself, you’ll definitely save a nice bit of $/month.

      Jesse

  • Hi Jesse! I’ve been reading many of your articles published on this site, and this was my favourite thus far! It is so comprehensive and your engagement with commenters is inspiring. Thank you!

    I am based in Canada, but am thinking of starting a subscription mystery box business using (sample and full sized) products shipped from abroad, to satisfy a niche market here.

    Any advice on:

    a) Writing a procurement request to a company to ask for product samples? (i.e. an example letter, etc)
    b) Shipping options for Canada/US (what have you found to be the best shipping option and price per box that would fit into a regular mailbox?)
    c) fulfilment centre options for non-box products (i.e. our “box” will be a padded “pouch”) that would be willing to put together monthly boxes using a year’s worth of stock (we would provide the names of products to put in each monthly “box”)

    Thanks a bunch!!!!
    I will be using your website. You won me over. The monthly orders will serve as special occasion gifts for friends 🙂

    Hana K

    • Hi Hana,

      Thanks for the kind words! Glad this has been helpful 🙂

      a) Would this be for free samples? If so, I’d definitely suggest having a compelling attachment. Product samples = marketing. Good marketing has an ROI. You’ll want to spell out how you achieve that (coupons, special giveaways, other marketing perks)
      2) I think you’ve got two question here: for type of shipping, I ship International First Class from the US. I’m not super familiar with shipping from Canada. If you have most of your customers in the US though, I’d suggest running numbers on outsourcing fulfillment to the US and shipping domestic here. For the size of the box, I don’t worry about how well it fits in mailboxes, partially because they vary so much, but mostly because the courier will deliver it to their doorstep if it’s too large. More than mailbox size, I’d suggest looking at how you’re shipping your box (is it by volume or weight? What determines it’s tiers?) and try to see if box size can make sense small if it saves you $ on shipping.
      3) Probably any fulfillment would do this for you (I’d suggest NW Paper Box or Kable, both listed on the resources page along with a few others). They’d probably charge you a per pallet storage fee for your inventory, usually that’s around $20-30/pallet (varies though).

      Thanks again! Good luck with everything!

      Jesse

  • Hi Jesse! Really enjoy reading your articles and I am deeply appreciative of you sharing this knowledge to us newbies. I am thinking about starting a subscription box service, however I currently live abroad (in Honduras). What advice can you give me in order to test the waters first to see if people would actually be interested before deciding on moving to the US to actually start and operate the business? (I have a place to stay if need be in Miami, FL). I am also interested in know more about working with a fulfillment partner? How does this work with perishables? Do you know of any fulfillment centers in Florida?

    • Hey Erick,

      Happy to be a resources, and I’m glad the guides have been useful for you.

      It sounds like you plan to ship primarily to the US, right? I don’t know any fulfillment centers off the top of my head in FL, but check out our resources page for some options. Keep in mind that you don’t need to necessary live near your fulfillment center – they can snap photos of box builds for you to approve. I might suggest trying to outsource to somewhere centrally located in the US for the best shipping rates possible, actually.

      For testing the waters, I would do the same thing explained above – build a landing page and gathering initial interest organically as best you can. Use social media, influencers, bloggers, etc, and do you best to push traffic to your page. Pay attention to conversion rate as you core metric. You can do all this from anywhere in the world, so it’s a good first step for you. I’d suggest gathering at least 1000-2000 emails before making your move. That’s a huge step and I would try to ensure success if I were you!

      Hope that helps,
      Jesse

  • Great stuff Jesse! Truly inspiring with loads of useful tips.. Congratulations and wish you super success!

    • Thank you! Really glad you got something from the guide 🙂

      Jesse

  • How do you keep track of your subscribers? I have started a subscription business and with popularity growing I am having trouble with labels. I get alerts for new orders with monthly and new sign ups but having trouble staying organized with 3 month, 6 month and yearly subscribers.
    Any insight on this?

    Thank you

    • Hey Scott,

      Are you using Cratejoy? They make it super easy. Your rebilling platform should be on top of when they do/do not rebill (that shouldn’t be a manual process). Is there anything else that is required in the subscription, ie. customization or something? What platform are you using?

      Jesse

  • What an excellent read! Thank you so much for sharing. How do you find working with smaller, independent companies in terms of purchasing products in time for posting the products out? Many of the retailers I am speaking with have up to 3 weeks lead time as they are handmade products and therefore planning how many I need and ensuring they arrive in time could be difficult. Especially if I want to pay for the products out of the money I receive from subscribers each month. Do you have to pre-plan for some of the retailers and give them longer than a couple of weeks notice in order for them to be able to produce the product and ship them out? If so, how does this affect your cash flow?

    Thanks!

    • Hi Louise,

      For predicting product, it takes a bit of planning. Smaller businesses will definitely need a longer lead time – 3 weeks sounds about right. You should look at your average growth per day, then estimate as best you can. I would over estimate by 5-10 products if you’re under 100 subs. You can use those extras if you need, or send them to press if you don’t sell out.

      For cash flow, I will usually wait until the product is ready to ship before paying – most of the time, it’s common to only pay upon delivery. If they are super tiny and can’t afford the run, I would definitely request some assurances, because that can impact cash flow, especially if you’re bootstrapping.

      Hope that helps!
      Jesse

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