Should You Consider Selling a Subscription-Based Product?

A subscription-based product is one that someone buys on a monthly basis. We often are familiar with this concept through services or programs such as Netflix and Photoshop. The monthly subscription is now a normal offering through products, as well. We believe pretty much anything can be offered on a subscription basis. However it’s up to you to decide whether or not you should offer it that way. We’ve listed out some pros and cons to why the subscription-based product may be, or not be, for you. And why you should consider selling a subscription-based product.

Pros

A subscription based product is usually cheaper when buying on a reoccurring basis. We’re not really big fans of Amazon here at Inventora. However, you might be familiar with their option to buy products on a subscription for cheaper. This is because they are generating a guaranteed amount of money monthly (known as MRR, monthly reoccurring revenue). This helps them predict their revenue, meaning they know how much of a discount they are willing to part with. This can be a very smart business move if done correctly.

Speaking of MRR, that in itself is a benefit. The world of sales is tricky, and as you know we can only predict each month, but nothing is set in stone, however, with MRR, you do know exactly how much revenue you will receive from that product. That revenue alone can finance another area of your business without you having to hustle hard for it.

Another benefit is the value a subscription box can add to handmade businesses. Think of it this way… as a maker, your products are very unique, however, there are likely similar products out there. For example, if you’re a candlemaker. There is a huge handmade candle market. A way to set yourself a part from the rest is to make a *one-of-a-kind* package that is only accessible through your business. This makes your products more of a rarity, thus adding value to your business.

The experience is another thing to consider. Think about all the unboxing videos you see as you’re scrolling through YouTube, TikTok, and Instagram. You have the ability to make this a fun monthly experience that your customers will be excited about and eager to share with their friends and family. 

Cons

Although there are good things that come about with subscriptions, there are also downsides. For example, discounts, as mentioned earlier. Subscription products are usually offered at a discount. Naturally, every business owner wants their full profit. It is important to consider, you’ll have a more regularly occurring purchase of this item, however, you’ll want to keep in mind your customers will not be paying the regular amount they would normally be paying.

Additionally, there is a bit of housekeeping that comes with subscription products. Usually, customer information is stored so you can easily charge them monthly. Cards expire, customers move to different addresses, and it’s important that you keep up with these little details, which can ultimately be time consuming but very critical to ensure the purchase and deliveries success.

Subscription boxes can also cause confusion about pricing to your customers. As said above, you’re now selling products at a discounted rate for an annual subscription. This may flag some concern the next time a subscription-based buyer purchases an item from their box directly. They may be confused or surprised when the item costs more than they are use to paying.

Lastly, once you start a subscription-based service, it’s hard to stop. This is similar to taking a product off the shelf. People are going to ask you what happened to the service. You’ll have to stop the automatic payments, update your inventory, and deal with disappointment from some customers.


Whether you decide to offer a subscription based product or not, you’ll have to out weigh the pros and cons to see which makes the most sense for you and your business. Not only should this make sense financially for your small business, but it should be something that you enjoy to do.

Have you offered a subscription based product before? Love it? Hate it? Tell us your thoughts about if you should consider selling a subscription-based product.

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