March 29, 2024

How To Build A Million Dollar Subscription Box Business

I want to help every single person grow the monthly revenue in their Subscription Box to at least $83,334.

The reason why I have picked this number is because when you reach it you have a million dollar Subscription Box Business.

Multiply $83,334 by 12 and you hit $1 million dollars in sales over 12 months.

I remember a few years ago in BusterBox it felt like we were miles away from this goal.

I used to come into the office every single day and load up ChartMogul and check what our annual run rate was..

I was always disappointed though, because no matter what we tried to do, we were absolutely crawling towards the million dollar mark..

It felt like we were banging our heads off the wall and growth was so slow it was going to take forever to get there.

The main reason why I was determined to reach the million dollar mark was because I thought it would be an unbelievable story..

I really liked the idea of setting up a business out of your spare bedroom with barely any money and no connections and in a short period of time it grows into a million dollar business.

There is something very satisfying about achieving that and there are also other benefits which really help your business.

Let me explain what they are.

1. Bigger Scale Better Margin.

Once you really start to scale up it becomes a lot easier to improve the margin of your box. You will find yourself in a position where lots of companies are reaching out to you and trying to get their products in your box.

This puts you in a good position where you don’t need to chase companies down trying to secure products. You will have a steady stream of leads coming through because companies know that any potential order will be very big for them.

It also puts you in a position where you can negotiate much better terms with suppliers. That includes your cardboard box, products and shipping costs.

Depending on your business, you are also approaching the level where you can cut out all the middle men and go directly to the source for your own branded products.

This can be tricky for cash flow, but if you pull it off it will 100% improve your profit margins and also make your box more exclusive in the process.

2. Build A Team.

Once you hit the million dollar mark you will not be running your business by yourself. I would hope you have already made some hires before you reach this point but once you get there you should really double down on this.

You should take a step back and work to identify what areas you are weak in and what skills the business needs to allow it to run more efficiently and reach the next level.

Once you have done that you should then hire the staff required to make this a reality.

When you build a strong team it will seriously benefit your Subscription Box. It means everything doesn’t depend on you and the show will go on when you aren’t there.

This will give you a lot of freedom so you can concentrate on the things that matter, which will help push your company on further.

3. Salary increases.

Let’s be honest, we didn’t set up these companies for the good of our health. At some stage you are going to want to earn a good salary.

At the very start you can get by just running on passion and determination and you don’t really care about your salary as you know your building something for yourself.

I am afraid this won’t go on forever though, At some stage you will have to pay yourself a good salary as bills need to be paid and you need to function in live.

The good news is once you have a million dollar Subscription Box business, you will be able to pay yourself a good salary and all your hard work will be worth it.

You also aren’t trapped by the wage restrictions of a 9 – 5 job. You essentially control your own income and as your company grows, you can continue to increase your salary.

This is a great position to be in and makes it extremely fulfilling to run your own business.

4. People take your business a lot more seriously.

Once you have a million dollar business people tend to take your company a lot more serious. It is easier to get credit from suppliers, loans from banks and conversations and potential investment from angel investors.

What we have found is people are more likely to engage with you once they know you have crossed this mark.

This is probably because you are a growing business and they have more trust in your abilities as you have proven you can reach this level

Now the next question is how do you build a million dollar Subscription Box Business?

1. Get clear on your goal.

How do you expect to reach your goal if you don’t even understand what you need to do to reach it? The first thing you need to work out is how many subs do you need to generate $83,334 in monthly revenue.

This is very easy to work out.

You need to know what your average revenue per user is and then you simply divide that into $83,334.

Let’s do an example calculation.

Say your Average Revenue Per User was $30.

Well then it would be $83,334 divided by $30

Which equals 2,777.

In this case you would need 2777 active subscribers to have a million dollar subscription box business.

Also, it is extremely important that you have some way of tracking your metrics because if you don’t have a clear way of seeing what they are you will never get anywhere.

I highly recommend you use Chartmogul, Baremetrics, Profitwell or Sublytics to do this.It doesn’t matter what you pick just go with something that works for your business.

When you use once of these programs it will be easy to see what your average revenue per user is and you will be also able to track all the other important stuff like lifetime value and monthly recurring revenue.

2. What will it cost to achieve the goal?

Once you understand the number of subscribers you need, you can then work out what it will cost to sign them all up.

This is a simple calculation where you take a look at your CPA and then multiple it by the number of subscribers you need.

You obviously need to account for churn, but once you do this it will give you a rough idea of the spend required to get there.

Once you understand what it will cost you can then make the decision of how quickly you want to grow.

The safest, but slowest way to grow would be by reinvesting your cashflow back into marketing.

The more risky, but quicker option would be to put your own cash into marketing or alternatively look for a loan or some kind of investment.

There is no right or wrong answer you just need to do what you are comfortable with and is best for your business.

3. Make sure you can focus on growing the business.

If 80% of your week is spent on admin tasks, customer service and sourcing products for your box, then you won’t get anywhere as there will be no time left to work on growth.

You need to be very careful with your time and ensure the majority of it is spent on growing your business.

You need to be working on your business and not working in your business every day.

This is a trap a lot of new Subscription Box owners get into and it isn’t good and it means you get stuck and you never end up getting anywhere near the million dollar point.

The first thing you need to do is hire a VA to help you with admin and customer service.

It is important that you do customer service yourself at the very start so you can understand what the main pain points are and come up with solutions and scripts but this isn’t something you should be doing long term.

Once you have processes in place this is the first person you should hire as it will instantly free up a lot of your time.

Like I said, you need to be very calculated with your time and when your revenues support it you need to audit your business and see what other help you can afford to hire.

To get to the million dollar mark it will require an enormous amount of effort with your marketing so you need to ensure you have the time to do that.

4. Keep marketing and selling non-stop.

I am not getting into specifics when it comes to marketing channels (You can check my blog for loads of different articles on this) but the main point is once you have a repeatable, profitable and scalable way of getting customers you need to go all in.

The best case scenario is you are literally selling nonstop with emails going every day and ads on around the clock.

This will put you in a position where you have fresh leads coming into your funnel every day and you are converting them into new subscribers quickly.

Once you get into this habit you will be amazed at how quickly your Subscription Box grows.

One of the biggest mistakes Subscription Box owners make is they don’t do this. They market for a few days here and there and then stop for weeks at a time.

Truthfully, if you do this you won’t get anywhere and you will get stuck.

You need to just completely go for it and not be afraid to raise your budgets once things are working.

This will allow you to hit your goal as quickly as possible.

I am very thankful that we managed to surpass this goal in Buster Box and we have now sold over $7 million dollars’ worth of Subscription Boxes. The way we managed to achieve this was by following the exact advice that you will find in this article.

I hope you found this helpful and I hope you get to this point in your business as soon as possible because it makes a massive difference once you do.

I am very thankful that we managed to surpass this goal in Buster Box and we have now sold over $7 million dollars’ worth of Subscription Boxes. The way we managed to achieve this was by following the exact advice that you will find in this article — and using Subbly to run everything on the operational side (they’ve put together their own platform-specific guide to how to set up a subscription box business which is also worth a read).

If you have any questions about what I just covered or Subscription Boxes in general please let me know.

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