The Costs of Starting a Subscription Box | EP 161

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Do you get excited thinking about starting a subscription box but worry about what it will cost to get started? A subscription box is an eCommerce business which means there are start-up costs involved just like with any other online business. These costs can vary depending on what you want to do. 

You can be profitable from month one, but you have to understand your costs. Understanding them helps you: 

• Price your subscription box
• Market your subscription box
• Stay on budget
• Stay profitable from 

What are these costs? 

There are five categories of costs you need to consider. 

1 - Product Costs -  Product cost is the actual expense of goods for each item you will put in your subscription box each month. Whether you make the items yourself, buy them wholesale, or source them from overseas, these costs will make up the highest percentage of your box costs. 

When calculating product costs, make sure to include the shipping costs to you. This can have a big impact on your overall product cost and needs to be tracked and planned for.

2 - Packaging Costs - There are so many variables when it comes to packaging costs. You can ship your subscription box in a basic box, custom box, or go without a box and use a poly mailer.

Packaging isn’t just about the outside of the box. You also need to consider the cost of stickers, shreds, tissue paper, inserts, tape, etc. - anything you use to get your boxes ready to ship.

3 - Fulfillment Costs - Your fulfillment costs are made up of packing and shipping costs. Both can be difficult to figure out when you’re first starting out. Packing costs include the labor it takes to package each subscription box. Third-party fulfillment companies pack and ship your boxes for you. 

Shipping makes up the other part of your fulfillment costs. Shipping can be VERY expensive and shipping costs vary widely depending on the destination.

4 - Tech Costs - A subscription box is an eCommerce business. In other words, you need tech in order to run your business. Before you can even get your subscription box up and running, there are several tech pieces you need to have in place.

• Website
• Payment Processor
• Shipping Software 
• Email CRM 

5 - Advertising Costs - I always want you to focus on generating organic traffic, but there comes a time when you’ll want to add paid advertising to your marketing plan. Advertising costs range from printed flyers to online ads. These costs need to be factored into your initial and ongoing costs for your subscription box business.

Start simple. Scale gradually. Manage your costs. You can start a subscription box and stay profitable… from the beginning. 

Grab My Subscription Box Budget Calculator!

Copy and save the Google Sheet Template and plug in your numbers to find out your subscription box profit margin!

Wondering about the costs of starting a subscription box? Join me for this episode to learn about the 5 main categories so you can confidently price your box and be profitable in month one. 

Episode 61 - What Can a Fulfillment Center Do for My Subscription Box Business?