A Subscription Business Model Could Be What Your Business Needs

  A Subscription Business Model Could Be What Your Business Needs

A subscription business model refers to a business model centered on customers subscribing to a service and/or product. In such a model, consumers pay businesses a recurring fee for products and/or services, generating recurring revenue for businesses. Historically used in the publishing industry for newspapers and magazines, this business model has seen considerable expansion in the last two decades. In fact, some of the most successful online companies today owe their success to the adoption of a subscription revenue model. Read on to discover subscription business ideas and learn how this business model could elevate your brand and make your business more sustainable.

Why should you turn your business into a subscription business?

i. Subscription business is a means to get recurring revenue

One of the most appealing reasons for adopting a subscription model is the possibility of having a recurring revenue channel as part of your business. As the e-commerce sphere is increasingly competitive, selling your products or services as a subscription helps you retain a steady customer base, month to month. When customers are billed on a regular basis, whether monthly, quarterly or yearly, you will generate a recurring income for your business.


In the tech industry, application developers often use a subscription model for software downloads, which allows companies to gain revenue indefinitely, to be invested back into research and development to improve their product. However, tech and publications aside, most businesses offering a product or service can benefit from adopting a subscription business model as well. Tangible and tradable goods such as groceries, apparel, food and beverage, and health and beauty services have increasingly been offered to customers using a subscription model, and subscription businesses have seen a steady rise in the share of all e-commerce transactions over the last few years. 

Part of what drives the demand is changes in consumer behaviour, with more people shopping online than ever, and with savvy consumers increasingly demanding reliability, efficiency and convenience. The recent COVID-19 pandemic has made it even more apparent that e-commerce is no longer just an option, but a necessary service for customers around the world. The transition to a subscription based online business is therefore projected to increase as shopping becomes more streamlined, with consumers looking for time savings and reliability in acquiring their daily necessities. This is good news for businesses, as subscriptions provide a guaranteed monthly income and makes it easier to forecast inventory and achieve greater business sustainability. The model also improves brand loyalty by allowing consumers to pay for exactly what they want.

ii. Subscription allows you to turn your regular products into premium products

The subscription business model also enables the branding of select products as premium products. When subscribing to your brand through a subscription platform is the only means of acquiring your products or services, it is regarded as premium or exclusive. Many subscription companies offer a limited number of goods to ensure their product exclusivity as well as quality. This creates a sense of scarcity, which is a key ingredient for making premium products attractive, and is a huge part of successful subscription business ideas. This is good news for SMEs who can carve out a competitive niche in the market with a small selection of products. Exclusivity means that you don’t have to model your business after larger brands offering a greater variety of goods to be competitive, which stands in contrast to how conventional brick and mortar businesses operate in terms of up-scaling. With proper planning and strategic marketing efforts, your business, however small, can flourish with a subscription business model.

iii. It makes your brand competitive

Subscription models convert ownerships and one time sales into userships over time. Charging a customer $10 monthly is more attractive than charging them $120 once, and the subscription model can be leveraged across a wide range of products and services including high-value product rentals. This means that you are ultimately tapping into a much wider consumer base by not requiring a hefty upfront payment, making your products more accessible. A higher price creates a stronger barrier for entry and while there are exceptions, customers tend to shy away from more expensive products. 

The subscription model also allows brands to identify the "sweet spot" of pricing to increase consumer uptake. Brands don't have a say when they sell a product/service just once. With subscriptions, there is always room for fine tuning price points and incorporating consumer feedback into product development, packaging and product bundles. This allows you to truly deliver on all fronts, gauging how one product performs with the public, allowing you to continually improve your product or service as necessary. The incorporation of a subscription revenue model effectively helps businesses improve products and services while giving you a set monthly customer base, which all in all ensures that your business remains competitive. 

So, how can you get started? Are you looking for subscription business ideas that guarantee recurring revenue or income? Moving your business online is easier than you think as there are services out there that provide end to end business solutions, taking care of all necessary backend support and systems development for you, so that you can focus on making, selling and improving your products.

One place you can start with is SUBPLACE. SUBPLACE is the first ever subscription platform in Asia that promises long-term, no-fuss usership. Appealing to a broad consumer base, SUBPLACE is the platform of choice for FMCG, F&B, health & beauty, and fashion brands, among many others. The platform's risk-free, end-to-end business solution allows businesses to market products on a subscription basis and retain existing customers while attracting new ones. Incorporating the subscription business model has never been easier with SUBPLACE. 

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