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Thursday, April 18, 2024

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HomeBusiness StrategiesSmall BusinessBusinesses that work great on a subscription model

Businesses that work great on a subscription model

Some entrepreneurs like the idea of selling something once and then seeking new clients, while others like the idea of securing a client for life with recurring payments. The latter option is known as the subscription model of business, in which X amount of money is billed every Y amount of time if the customer wants to continue receiving their product or service. For those interested in doing a subscription-based business, the biggest issue is what exactly is going to be sold. It needs to be worthwhile from the get-go, but also deliver continued value in such a way that justifies paying more than once for this product.

What kind of things are people willing to pay for again and again? Let’s go over a few:


SaaS, or Software as a Service, is when a piece of software is made that’s meant to comprehensively solve an issue a consumer is experiencing. Some examples of this kind of service are tax software, point of sale software, or specific photo or audio manipulation services. A large portion of continuity or subscription merchants first looks to SaaS as a means of revenue. People are willing to pay a subscription for these services because they often fill roles that an employee would have to fill; someone they would have to continue to pay on a consistent basis, anyway. This service may be cheaper and more effective per month than hiring a flesh and blood human being, so it can end up being worth it.

Knowledge and Training

Certain websites allow for a subscription to sell knowledge to those who want to learn. The price is justified either through the consistent stream of new content and ability to ask personalized questions whenever you’d like, or because learning the skill takes time in and of itself. If you like to have consistent access to the next steps, you’ll have to continue paying for the service as you need it. These are both effective strategies at retaining customers, and people are much more willing to consider it as more of a “tuition” cost than a “product” cost.

“Box” Subscriptions

A newer kind of subscription is that of a monthly box containing items relating to a specific interest. There are boxes for men’s and women’s clothing and hygiene needs, as well as hundreds of niche boxes catering to particular interests. People pay to have a box arrive every month, which is full of knick-knacks relating to the area of interest of the business. The consistent revenue stream allows the business owners to consistently buy these items at a wholesale price to then be distributed to their clients at a reduced price. People like the idea of getting semi-random “gifts” frequently, and the business behind the boxes enjoys the continued support of their customers.


These three kinds of businesses are booming in today’s online landscape. Some make more than six figures each month from their customer base. More and more human necessities are being digitized and fulfilled via Internet entrepreneurs, which leads to fewer and fewer people being apprehensive about a service that bills itself monthly from their credit card. As long as the service is trustworthy, convenient, and fulfills its intended purpose, there’s little reason for it not to continue to thrive.

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