Subscription Box Business Terminology Definitions

Learn common terms used in the subscription box industry and what they mean.     

The subscription box industry has its own language. Just like tech has its own language, filled with words I don’t understand and sometimes don’t know how to pronounce, the subscription box industry has words and terms that are all ours. 

When you’re starting out, learning all you need to know to launch your subscription box - or even when you’ve been around a while - it helps to have a one-stop resource to tell you what all those words mean to you as a subscription box owner. 

So I’m going to give you just that. A list of all the terms you need to know to feel at home inside this wonderful, sometimes crazy world of subscription boxes.

Glossary of subscription box business terms

A

A/B Testing - a way to determine which ad or email version gets better results. Both options are published or sent to your audience at the same time and results are tracked to determine which performs better.

Active subscribers - subscribers who are currently receiving and paying for a subscription.

AOV - the average order value is the average amount someone spends per order in any given period.

B

Bulk order - ordering multiple of the same product whether boxes, packing supplies, or items to go in your subscription boxes.

C

CAC - customer acquisition cost. This is the amount of money it costs you to acquire a new subscriber.

Churn - sometimes also called “attrition,” churn is the rate at which subscribers cancel their subscriptions.

Closed Subscription - a subscription service that customers can only join during a specified time, typically a launch.

COGS - cost of goods sold is the total cost of what you provide to your subscribers, including sourcing products, packaging, shipping, fulfillment, and marketing.

Conversion rate - the rate at which an opt-in, landing page, website page, ad, or email leads to the customer taking the desired action. This could be providing their email address or phone number, joining a waitlist, or becoming a subscriber.

CRM - customer relationship management software that allows you to send emails and keep track of all customer communications. We use and recommend Klaviyo. Others include MailerLite, ConvertKit, and Mailchimp. Listen to episode 108 of the Launch Your Box Podcast to learn about 5 emails subscription box owners can send every month.

CTA - call to action. This is the action you want the customer to take, i.e., read the blog post, listen to the podcast episode, join the waitlist, provide their email address, become a subscriber.

Curate - to select items for a subscription box, focusing on a theme or taking the subscriber through a carefully thought out experience.

Cut-off date - the last date a customer can subscribe to receive the current subscription box.

DE

F

FAQ - frequently asked questions. This is a section often found on websites where you provide answers to questions commonly asked by customers or prospects.

FOMO - fear of missing out. This is a marketing tactic used by subscription box owners to generate interest and sales.

Fulfillment center - a third-party vendor that receives goods, packages them per your instructions, and ships them to your subscribers.

G

Gross profit - the total profit after subtracting the cost of goods sold (GOGS).  

H

I

IC - your ideal customer is the fictional one person you are selling to. This is the person you tailor your messaging to, curate your box for, and market your box to. Check out this blog for 4 ways to identify your ideal customer.

J

K

KPI - key performance indicators are metrics that give information about how certain areas of the business are performing.

L

LTV - lifetime value is gross revenue generated by a customer over the life of their subscription.

M

Market - a large collection of vendors displaying their available products. It’s a great place to spot new trends, order products, and build vendor relationships.

N 

Net profit - the total profit after subtracting all working expenses.

Niche - a small part of the market with well-defined wants, interests, or needs. 

O

Open Subscription - a subscription service that customers can join at any time.

P

Payment processor - a third party that handles credit and debit card transactions. 

Pre-launch - the period leading up to the launch of your subscription box when you focus on audience building, growing your waitlist, and nurturing your audience.

Procurement - sourcing, purchasing, and receiving the products that will be included in a subscription box.

Q

R

Recurring payments - payments you receive at regular intervals without additional selling. If you have a monthly subscription, every month you’ll receive recurring payments from all of your subscribers.

Retention rate - the percentage of total subscribers that remain active subscribers.

S

SEO - search engine optimization uses specific techniques to increase traffic to your website and increase your website’s search engine ranking.

Subscription box - a curated, niche-oriented selection of products packaged in a box and shipped to a customer (subscriber) on a recurring basis. Rather than just a box of “stuff,” a subscription box delivers an experience to a subscriber.

T

Traffic - the number of visitors to your website.

U

V

Variations - product options a subscriber can choose from for their subscription box, i.e., size.

Vendor - a third party that provides services to or products for your subscription box business.

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Now you can feel confident, knowing you’re familiar with the terms people use when talking about the subscription box industry. Are you ready to learn more about how to launch a subscription box? Start by joining me for my FREE 6 in 60 Workshop where you’ll curate six months’ worth of boxes for your ideal customer.