Subscription Model for Selling Physical Products: 11 Examples

In today's fast-paced world, businesses are always on the lookout for fresh and exciting ways to keep customers engaged and ensure a steady stream of income. One of the hottest trends gaining traction is the subscription model for selling physical products. What started as a go-to strategy for digital services and magazines has now become a game-changer for physical goods, with subscription boxes leading the charge.

From daily necessities to special treats, companies in all kinds of industries are using subscription boxes to build lasting relationships with their customers, guarantee regular income, and boost brand loyalty. In this article, we'll explore the pros and cons of subscription-based selling for physical products. Plus, we'll showcase real-world examples that highlight the perks and clever tactics different businesses use. 

Whether you're just starting out or have been in the game for a while, these examples will give you some great ideas on how to incorporate a subscription model into your own offerings, driving growth and keeping your customers happy.

What Is a Subscription Model?

A subscription model is a way of selling products or services through recurring billing, often at a lower cost than purchasing each item or service individually. Subscriptions have become incredibly popular in recent years, with services like Netflix, Disney+, Microsoft Office, and even fitness or library memberships leading the charge.

For example, with a fitness pass, you can either pay a recurring fee that allows unlimited access to the gym or buy a ticket each time you visit. The recurring pass is generally much cheaper per visit because the gym rewards your loyalty with exclusive discounts. This is the heart of a subscription model.

This approach can be applied to anything that you use regularly or need consistently. From streaming platforms and digital tools to physical products and services, subscription models offer convenience and cost savings. There are many different types of subscription models, but in this article, we'll focus on the subscription model for selling physical products.

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How to Use a Subscription Model for Physical Goods

Subscription models aren't just for streaming platforms or gyms anymore — they're increasingly being used for physical goods. In a competitive market, businesses are vying for customers' attention by offering unique and convenient solutions.

However, using a subscription model for physical goods needs to be implemented carefully, and this model won’t be suitable for all brands that sell physical goods. Therefore, the first and most important step is to carefully consider whether a subscription model is right for your company. If your customers regularly buy the same products from you, then a subscription model can offer them a great level of convenience. 

Equally, if you are in a position where you can offer your customers a curated selection of the best products in your niche, a subscription model can be of great benefit. Subscription models can also be useful for new product categories because you can offer your customers an introduction to these products.

Here's how to effectively use a subscription model for physical goods:

1. Understand your audience.

Identify the specific needs and preferences of your target market. Younger audiences, for example, are looking for sustainable and convenient solutions.

2. Offer convenience.

Save your customers time and effort by providing a seamless subscription experience. For example, a diet catering service not only delivers meals but also saves customers the time spent on cooking and meal prep.

3. Bundle services with products.

Enhance the value of your physical goods by bundling them with services. For instance, a car-sharing subscription provides not just a vehicle but also maintenance, insurance, and customer support.

4. Focus on sustainability.

Appeal to eco-conscious consumers by offering products that are environmentally friendly and promote a sustainable lifestyle. This can include using recyclable packaging or offering a subscription for eco-friendly products.

5. Offer flexible subscription plans.

Provide various subscription options to suit different customer needs. This could include monthly, quarterly, or annual plans, as well as the ability to pause or cancel the subscription easily.

What Are Subscription Products?

Certain types of products are particularly well-suited to a subscription model. Before diving into subscription sales, consider whether this approach fits your product. 

Here are some categories that work well for subscriptions:

Everyday Products

Products that people use daily are prime candidates for subscriptions. Think fruits, vegetables, snacks, pet food, coffee, or vegan substitutes. These items are consumed regularly and can save customers time and hassle when delivered on a recurring basis. 

Products That Wear Out

Items that wear out or get used up over time also make great subscription products. This includes beauty products, cleaning supplies, baby diapers, razors, and even candles or books. Offering these products via subscription ensures a steady income for your business and convenience for your customers, who won't have to worry about running out of essentials.

Collectible Merchandise

Collectibles are perfect for subscription boxes, often referred to as mystery boxes. Items like notebooks, figurines, cups, stickers, games, and CDs are popular choices. Fans love mystery boxes because they often receive items worth more than what they paid, adding an element of excitement and surprise to each delivery.

11 Subscription Business Model Examples and Ideas

Subscription services are more than just convenient — they can be exciting, surprising, and tailored to your interests. Here are 11 cool ideas for physical goods subscriptions that offer something unique and enjoyable for everyone.

1. Field Notes

Field Notes offers collectible notebooks that come in themed series, often with added extras. This subscription is perfect for anyone who loves writing or needs to take a lot of notes in style. With each delivery, subscribers receive beautifully designed notebooks, each with a unique theme and high-quality craftsmanship. Whether you use them for work, personal journaling, or creative projects, Field Notes provides a stylish and practical solution for all your writing needs.

2. Estrid

Estrid, a Scandinavian startup, began with razor subscriptions for men and women. It offers a one-time purchase of a razor handle, followed by a subscription for replaceable blades. This vegan, eco-friendly company has expanded its offerings to include cosmetics such as razor gels and body lotions. 

Estrid's commitment to sustainability and high-quality products has gained them immense popularity. Subscribers appreciate the convenience of having fresh blades and grooming products delivered to their doorstep, making self-care simple and eco-conscious.

3. Illumicrate

Illumicrate delivers exclusive book-related content each month. Subscribers receive a beautifully printed book, often in an exclusive edition, along with themed merchandise related to the book and its contents. Each month, a new theme is announced, complete with hints and trigger warnings to build anticipation.

The company also offers special edition boxes featuring a series of books. The attention to detail and high-quality merchandise make Illumicrate one of the best book subscriptions available, providing book lovers with a unique and immersive reading experience.

4. Vellabox

Vellabox sends personalized scented candles based on your preferences. After filling out a short form, the subscription management software selects the best candles for you, which are then delivered as often as you like. Each monthly box includes a different candle, a lifestyle freebie, and a curated playlist to match the scent. 

Whether you prefer floral, citrus, or other scents, Vellabox helps you create a relaxing and cozy atmosphere at home. The variety of candles ensures that you always have a fresh and delightful scent to enjoy.

5. ON THAT ASS

ON THAT ASS offers a subscription for men's boxer shorts. Subscribers can choose their size and style, receiving a fresh, high-quality pair of boxers every month. With options ranging from plain to colorful designs, ON THAT ASS ensures that your underwear drawer is always stocked with comfortable and stylish options. The quality and fit of their boxers have earned them a loyal customer base, making this subscription a great way to keep your wardrobe updated effortlessly.

6. YourKAYA

Founded in Poland, YourKAYA specializes in intimate hygiene products like tampons and menstrual pads. They also offer a range of intimate cosmetics and are involved in charity and sex education programs. YourKAYA's commitment to body-friendly products and social responsibility has garnered a strong following worldwide. 

Subscribers appreciate the convenience of having essential hygiene products delivered regularly, along with the company's dedication to promoting health and education. YourKAYA is an excellent example of how a subscription model can meet personal needs while supporting important causes.

7. TokyoTreat

TokyoTreat delivers a monthly box of Japanese snacks, drinks, cookies, and instant ramen. Each box is filled with a variety of unique and delicious treats, offering subscribers a taste of Japan from the comfort of their own homes. TokyoTreat also offers special themed boxes, such as sakura-themed products, each spring, providing a seasonal twist to their offerings. The surprise and excitement of discovering new flavors and snacks make TokyoTreat a favorite among food enthusiasts and fans of Japanese culture. 

8. LootCRATE

LootCRATE provides mystery boxes for movie lovers, horror fans, anime enthusiasts, and gamers. Each month, subscribers receive a box filled with officially licensed merchandise from various popular franchises. Thanks to their many license collaborations, every piece of merchandise is an authentic and exclusive item from a movie, game, or anime. LootCRATE's variety and quality of items make it a thrilling subscription for fans who enjoy collecting unique memorabilia and showcasing their interests.

9. KiwiCo

KiwiCo offers subscription boxes filled with toys and puzzles for all ages, from babies to elderly people. Each box is tailored to the recipient's age and interests, ensuring hours of entertainment and learning. KiwiCo's projects are designed to be fun and educational, promoting creativity, problem-solving, and hands-on learning. 

Whether you're looking for activities for your children or a creative outlet for yourself, KiwiCo provides engaging and high-quality projects that cater to every age group.

10. The Coffeevine

The Coffeevine delivers whole-bean coffee from different roasters worldwide. Subscribers can choose the number of packages, box size, and roast profile, ensuring a perfect coffee experience every time. Each delivery includes a curated selection of premium beans, providing coffee enthusiasts with the opportunity to explore new flavors and roasters. The Coffeevine's commitment to quality and variety makes it a delightful subscription for anyone who loves a great cup of coffee.

11. Escape the Crate

Escape the Crate offers a bi-monthly subscription with a new mystery to solve in each box. Themes range from jailbreaks to UFOs, providing a thrilling and interactive experience. Each box comes with a different story, plotline, and props that you will use to escape the crate alive. 

The immersive and challenging nature of Escape the Crate's puzzles makes it a unique and exciting subscription for anyone who enjoys solving mysteries and experiencing new adventures.

Pros and Cons of a Subscription Business Model

The subscription business model has gained significant traction across various industries due to its potential for creating steady, predictable revenue streams and fostering long-term customer relationships. However, it also comes with its unique set of challenges. In this section, we will explore the advantages and disadvantages of adopting a subscription business model, helping you understand whether it is the right fit for your business.

Benefits of the Subscription Business Model

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Monthly subscriptions ensure a stable, predictable income, which is essential for your business.

But subscriptions offer more than just financial benefits. They help you estimate how much product you need, so you’re not stuck with unsold inventory. This can maximize your warehouse efficiency and allow you to plan for upcoming projects.

Subscriptions also keep customers engaged with your brand. With recurring charges, customers are regularly interacting with your product and its updates. Since they’re already buying from you, they’re more likely to try your new offerings rather than switching to a competitor. This saves them money and time, providing them with a convenient all-in-one solution instead of using multiple services.

Disadvantages of the Subscription Business Model

Loyal customers appreciate being recognized and valued. Over time, they expect more from your service and look for continuous improvements.

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Competition is always growing stronger, so it is important to care about customers' experiences with your product and to deliver freebies and perks to reward loyalty.

Maintaining a list of repeat customers can prompt you to rethink your marketing strategies to attract new clients. While retaining customers is crucial, it's important not to become complacent and to continue seeking new ones. This can be challenging when you have a steady income from subscription fees.

The subscription model can also limit your flexibility with sales, seasonal offers, or pricing strategies. Promotions for new clients might upset existing customers, while offers for loyal subscribers may not attract new ones. Careful consideration is needed when making marketing and financial decisions.

Additionally, it's vital to keep an eye on competitors who might offer similar products at lower prices, potentially driving away both current and prospective customers.

3 Pillars of the Subscription Business Model

This guide covers three critical pillars: setting up subscription services, building a subscription-based e-commerce platform, and managing online subscriptions effectively. Each pillar plays a crucial role in ensuring the success and sustainability of your subscription business.

1. Setting Up Subscription Services for E-commerce Businesses

Starting a successful subscription business requires careful planning and execution. You may need to rebuild your existing website to accommodate a subscription service or create a new one dedicated to product subscriptions. 

The type of subscriptions you want to offer (whether digital products or physical goods) will influence your setup. Digital product subscriptions necessitate tight digital security for downloads, while physical goods require efficient delivery systems. One of the biggest challenges in subscription marketing for physical goods is managing logistics.

After setting up the subscription model, decide on the cost and timescale of your subscription services, including elements like discounts for loyal customers. Consider your payment method and gateway carefully — recurring payments are popular and supported by multiple gateways but can be more complex to implement.

2. Building a Subscription-Based E-commerce Platform

Selling memberships and subscriptions differs significantly from selling products. It demands a dedicated e-commerce purchase process and analytics, which can be based on traditional e-commerce engines expanded with a dedicated theme or a free plugin. While options for this setup are available, they are limited. Considering a dedicated e-commerce website and mobile app is advisable, especially when the product and brand require a tailored approach regarding configuration and user experience.

If you need guidance on outsourcing an application to a technology partner, check out our article on the topic. 

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3. Online Subscription Management

Whether selling digital products or physical goods, subscribers must manage their subscriptions transparently and easily. Customers need clear information about payment plans, payment histories, and product deliveries. Managing customer and user experience is more critical in subscription products than in traditional ones. Losing one client due to failed payments can result in more significant losses than a single purchase.

Managing cancellations is crucial. It should be easy enough for users to feel safe but not so easy that it encourages them to cancel. Managing the churn rate will become a vital part of your business strategy after launching your subscription model.

A dedicated subscription management panel for your customers and a mobile app can facilitate these processes. These platforms are also excellent for upsells, loyalty programs, or product personalization. For more information about mobile app development, refer to our detailed article.

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Is the Subscription Business Model for Me?

Switching your existing physical products to a subscription service can be a significant investment of time and effort, but it might be just what your business needs to thrive. Many products still aren't available through subscriptions, so offering this fresh approach could set you apart and boost your growth.

To succeed with a subscription model, you'll need to deeply understand your customers' needs and habits and bring a lot of creativity to the table. When a product becomes a service, branding and digital tools become crucial elements of your business strategy.

With the right technology partner and a solid digital marketing plan, you can smoothly transition your business to start selling physical product subscriptions successfully.