More and more products and services are being sold via subscriptions (think Blue Apron, BarkBox, Dollar Shave Club, Stitch Fix). It’s a booming trend. Subscription-based companies are growing at a rate of 18.2 percent—about five times faster than S&P 500 revenues or U.S. retail sales.1
There are various types of subscription services. Replenishment subscriptions keep you stocked up on things you buy regularly. Inspirational/discovery subscriptions surprise you each month with products you might not otherwise try.
Products sold as a service, like software-as-a-service, offer a way to pay monthly for products that traditionally require an upfront capital outlay.
Of course, the subscription service business model has been around for a long time in the form of club memberships (remember those record clubs like Columbia House?) and subscriptions to newspapers and magazines. Even professional services that are paid for on retainer can be thought of as a sort of subscription.
But user-friendly ecommerce selling platforms make starting a subscription business it easier than ever. And there are lots of reasons for a business — especially a small business — to sell this way.