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types of ecommerce Subscription Services

Types of Ecommerce Subscription Services

By BloggerKhan

My profession is Management and Marketing and it revolves around outsourcing, ecommerce and marketing on the internet. Wise men say identify what you are passionate about and then see if ...

By BloggerKhan

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Subscription based ecommerce is gaining popularity in the USA. Are you considering something similar for your products or services? Here are some of the popular formats.

  1. Same product – Same price – repeat purchase:
    This is the oldest format and has been going on in the non-internet world for ever. The simplest example is newspaper / magazine subscriptions but also popular for office supplies like paper, ink cartridges, break room supplies etc. You pay a fixed amount every month in advance and the publications or products are sent to you every month.

    1. Customer Advantage: Convenience.
    2. Merchant Advantage:
      1. Predictable revenues.
      2. Longer lasting revenue streams per customer. Subscription based customers don’t cancel that often even if they don’t use the products that much. It’s too inconvenient to cancel.
  2. Different products – Same price – somebody else does the selection for you:
    A relatively newer concept made popular by companies like the Trunk Club. You pay a monthly fee, a fashion consultant has a session with you online, suggests a wardrobe for you and then sends you a box of clothes every month to suit your personality and lifestyle. You can talk to the consultant periodically and suggest changes.example of subscription based ecommerce

    1. Customer Advantage:
      1. Convenience.
      2. Professional help
      3. Discreet
      4. New items to enjoy and look svelte in – an area men seldom pay attention to otherwise
    2. Merchant Advantage:
      1. Customer loyalty
      2. Reaching a new type of customer
      3. Competitive advantage
  3. Different products – Same price – you pre-select items for the whole year:
    One of our clients came up with a suggestion and we created and implemented it for him. Without disclosing his items, he sells premium designer accessories, let’s say costume jewelry – a set of necklace and earrings. These are not cheap and each set costs $800 to $1,200. Women love to have such premium quality costume jewelry but can at best afford one set a year. The way his model works is customers sign up for a subscription, say $99 / month. Then they go through his selection of jewelry and drag and drop the sets they like for the next 12 months. Set A for January, set Q for February, set JQ for March and so on. Every month, he ships the customer her choice of jewelry and in the same box the customer ships back last month’s necklace.

    1. Customer Advantage:
      1. New premium necklace every month. If you are a woman, you can truly appreciate it’s value
      2. Affordability
    2. Merchant Advantage:
      1. Customer loyalty
      2. Reaching a new type of customer
      3. Increased sales – the monthly payments make it easier to pay for an expensive item

Trunk Club Subscription Ecommerce Service

Have you come across a unique or uncommon type of subscription? If so, please share in the comments below.

Thank You.

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