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Posted: by Bronte

Subscription Gifting: From Planning to Processing Payments

There has been a 100% increase in subscription boxes over the past five years. The days of only subscription beauty bloggers has ended, now inclusive for a multitude of other industries from the risque to the everyday. A subscription box often provides customers with unique products, tailored to a particular theme or interest. It introduces consumers to new brands and acts as a new gift every month. But, subscription box services are no longer purchased only for oneself. A whole subset of the subscription and continuity industry is tailored specifically made to be a gift to be purchased for someone else. This style is perfect for B2B and B2C avenues targeted to birthdays, holidays, or general thank you’s.

A subscription gift box can provide a stable form of monthly income as long as you fill a need in your specific niche. Before beginning your continuity box business, it would be best to know what to expect along your journey. Coming up with viable ideas, pricing, and credit card processing will all be hurdles to overcome in the unique industry of subscription gifting.

gift wrapping box

Step 1 – Come Up With a Subscription Gifting Box Idea

Be aware that starting a subscription box service comes with its share of risk. The reason why most gift subscription services fail is that they didn’t have a niche and customer in mind.

So, what’s a niche?

This is a group of products, services, or interests that appeal to a small portion of the population. The market needs satisfied by this product or service reflects in its price, quality, and demographics.

The core foundation of your business is coming up with an idea, and in this case specificity is your friend. Fulfill a niche market with your subscription box as much as possible by sizing up the current market. This involves conducting competitive analyses and creating a customer profile for your service. Customer retention and experience is heightened when their specific needs are met.

Think about your competitors.

The subscription gift box industry is popular, but that doesn’t mean there’s a need or demand for your products. When researching your competitors, keep these things in mind.

  • What products are they offering?
  • How much does it cost?
  • How can you stand out?

Get to know your customer.

flower gift

Be as specific as you can. This will allow you to compile items and market more effectively once your business gets going.

  • How old are they?
  • Where they shop?
  • What are their hobbies and interests?
  • What social media platforms do they use?

Refer to your answers often and refine as needed.

Step 2 – Determine Your Timing

Because this subscription service is intended as a gift for someone else, most boxes of this type have a predetermined end date at the time of signup.

In B2C transactions of this type, gifting often surrounds a life event such as a graduation, wedding, or pregnancy. New mothers will need an endless supply of diapers, baby clothes, toys, etc. in the beginning, but the need lessens as the baby grows up.

B2B gifts tend to be items such as coffee of the month clubs, fruit baskets, or gift-cards. These items need to have a wider appeal but should stay consistent every month. In some cases, these subscriptions are intended to stay constant, while in others they aren’t. It may be important to give your customers the option to choose a limit if they desire to.

Creating a tiered structure is another way to give your customers the control that they want. More expensive tiers can provide more items, higher quality, or more frequent gifting for the bigger spenders. This structure is inclusive to all types of client needs and is becoming the norm in the subscription industry as a whole.

Step 3 – Price Your Subscription Gift Box

wine subscription box

Now it’s time to price your product. One of the biggest mistakes is pricing your subscription box incorrectly. Prices too low or too high can threaten the sustainability of your business.

The costs to consider for your subscription gifting box include customer acquisition, the box and items inside of it, fulfillment, packaging materials, platform hosting, postage or shipping, and payment processing fees. Once this is all calculated, setting your profit margin at around 40% is the industry standard for subscription services.

Step 4 – Create a Prototype Gifting Box

How your items are packaged in the gift box is nearly as important as the items inside of it. Nowadays, the experience of the customer is key to continued success. Select the right size, look, and feel for the box with your end customer’s needs in mind.

  • Is it small or large?
  • Custom boxes or samples?
  • Top-open or side-open?

From there consider what goes inside to display and protect your items when shipped and received. This goes beyond just visual appearance, once again consider your audience and how they experience and perceive the packaging materials.

  • Tissue, crinkle, or custom paper?
  • Bubble wrap or sturdy padding for delicate items?
  • What color, material, and texture fits your brand?

Now, add in your items and arrange them nicely so that the first thing your customer sees when opening their box is appealing. Take photos and videos of the unboxing experience to place on your website and social media accounts. This creates an expectation so that the buyer knows exactly what their colleague, family member, or friend will receive.

Step 5 – Create Your Website to Accept Credit Cards

Building a website is intimidating, especially if you’re not tech-savvy. Fortunately, there are plenty of free e-commerce platforms that come equipped with code-free templates to get you started. Some include features such as analytics, referral campaigns, a sales-ready marketplace, a subscriber CRM, and a website designer.

online credit card payment

Once you choose your platform, it’s time to work setting up your subscription payment gateway to accept recurring payments from your subscribers. Being a subscription service means that you come with inherent risk to your acquiring bank. High rates of fraud and chargebacks place you in the hard to place category which requires better underwriting and more time till approval. Finding a credit card merchant account provider who is equipped to handle recurring payments, chargeback mitigation, and underwriting procedures will prove to be invaluable.

Begin by researching payment processors that have the infrastructure to support the high volume of subscription box businesses. Also, become familiar with supporters of the continuity industry, such as SUBTA and Cratejoy, for who they might recommend in the credit card processing space. Then be sure that your processor is adept at high risk accounts. High risk and hard to place credit card processors are built on fulfilling the needs of accounts in the subscription industry, because they know that extra care and monitoring is required to ensure their success.

Step 6 – Grow and Scale Your Business

Now is the time to go forth and thrive. Remember to keep your customer in mind to provide the products and options that fit their needs.