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A Crafter's Guide to Starting a Subscription Business

Lesson 7 of 21

Subscription Models: Which One is Best for You?

Mei Pak

A Crafter's Guide to Starting a Subscription Business

Mei Pak

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Lesson Info

7. Subscription Models: Which One is Best for You?

Lesson Info

Subscription Models: Which One is Best for You?

We are going to get started with our next segment here where I'm going to show you all of the logistical all the technical how to stuff for actually getting your subscription started started so let's first talk about the two subscription models they're probably a variety of different subscription models out there but these are the two main ones that I've theme for the most part in talking to other people who rent subscription businesses so the first one I call these cyclical subscription and this pretty much means where at any one point in let's say in august or in october everyone in my club gets the same exact design and then the next subscription time that I send my other products out that would be in november everyone will get the next upcoming product and this is potentially where every subscriber regardless of when they start they could start in january that could start in december they could start today they will all follow a very specific product who these path so let's say you...

plan out in the first subscription they will get product a in the second subscription product be than product see than property so regardless of when you sign up you will go through that exact same path a b c d so let's talk about the pros and concert both of thes subscription models and you can see for herself maybe one of these speaks better to you than the other and then we will kind of decide moving forward which one? We're going to talk most with this with this whole workshop which one we're going to address for the most part so the cyclical subscription some of the pros and by the way, I love doing these pros cons flys because it just helps make our decisions decision making to so much easier it really spells it out for us so some of the pros with the cyclicals subscription is you don't have to stress over extra inventory s o the way this is set up and I'll talk about the entire system in the schedule kind of I'll show your calendar of how this works but the cyclical subscription you're only making x amount every month off product a and the next month x amount of product be so you don't have to make any extras so in that way you only have to buy all the supplies however much you need for just those those few people or those many people that you have in your subscription at at that point the cyclical subscription also one of the advantages to this is that you have to set a sign up deadline for your subscription and what I like about this why I put it in prose is because this helps at that urgency that sense of urgency for people to sign up so that really helps you sell this product so it this whole marketing thing you know, it's like, psychologically, it really helps with for people to know that oh, if I don't sign up now, I'm going to have to wait a whole two months until I can find up again so I really don't want to miss out on this, so it really encourages them to sign up now and that's essentially what we want, right? We want them to make the purchase today because if they don't do it today, they're going to forget they may not come back next month probably even going to forget about you if you don't try to keep in touch with them by a social media or email marketing or any other form of marketing like that, one of the pros as well with the cyclical subscription is your shipping is really easy to do so so if you have like ten people or five people in your subscription is going to be easy to do in general, but I'm thinking bigger terms bigger, bigger picture, right? Like what if you grow it to fifty subscribers? What if you go it to one hundred, two hundred in stacey's case six hundred, the cyclical subscription is a lot easier to handle in terms of shipping, and I'll actually do ah whole walkthrough on how you can handle that for yourself some of the cons with this requires for you to set a sign up deadline and it's a con also because people can forget if you don't remember to remind them. So if you don't remind yourself to remind your customers people can miss deadlines and that's you know money that you didn't get from them it's a sale that you missed out on and then you have to wait until the next period when you open sign ups again another con is that customers have to wait quite a while from when they paid until when the product ships out and this will make a lot more sense when I actually show you the schedule. But in a nutshell, when you sign when you set a sign up deadline you really I want to know how many people are in your club or in your subscription and then once you know how many people there are the new start production, then you start ordered your supplies and you start manufacturing the pieces and you take care of shipping. But between that time sign ups, clothes and the and after that time that you spend on production and packaging probably a few weeks like in stacey's case, she has to take two to three full time weeks off of running her regular business just to produce all of her kids and to package all of them up so her customers potentially have to wait weeks for their products to get shipped out. So in that way, it's a little bit of a disadvantage, but as long I think is you communicate to your customers and make sure that they know when to expect their package. I don't feel like this is that big of a problem, so let's, talk a little bit about the sequential subscription, where everyone follows the same kind of customer experience so people might have different products that are shipped to them at any one day. Some of the pros to this is that customers received their subscription quickly so I can place an order today and the next week, I could already have started receiving my subscription prada, and as a result, you're going to get fewer emails from people saying, where is my order? Because with the cyclical subscription there, people there are, I guarantee you you're going to get subscribers who don't read the fine details or who don't lead, period, and I know you've all experienced that we've all experienced that, right? So with this sequential subscription, they're going to be people who they're going to be far fewer people who wonder where there's their product is, because you're shipping so quickly, and I mean, this is the definition of the sequential subscription, right? Everyone goes through the same experience, and this is in a way I wished I wish my subscription was like this I don't necessarily wish that I used this subscription, but I wish that my customers that find up this month was able to experience some of my earlier necklaces, so I've been doing this for two years now, yeah, I think I started about the same time this year the same time in the year that I did in two thousand thirteen, but I so I shipped out something like twelve necklaces, I've made twelve exclusive designs and there have been some designs and they're in the early months where I'm like I feel really proud about this. This is really awesome and my customers really love it, but someone who signed out and let's say that was a great necklace in month two and month twelve those subscribers who signed up then did not get the chance to get a month's two's necklace, which to me is a really like, you know, if only they could experience the whole thing they would they think that would make them happier, and that would be better in a way to have a full experience like that. Some of the cons and these, I think, are pretty big cons, especially when we start thinking about what's realistic for us, and for a lot of us who are handmade business owners who you craft your own product, everything is made my own two hands it really gets messy when you're trying to figure out which subscriber who signed up when gets what so I don't know you're gonna have to have some really really crazy spreadsheet or what? I don't know what organizational too I don't even know because I don't do a sequential subscription but you're definitely going to want to keep tabs on where a particular subscript particular subscriber is in that sequins. Another huge con is that it can be hard to manage inventory and and shipping so when you do the sequential subscription as you can imagine, you need to have product, eh in stock in case someone signs up yesterday or today and if someone signs that tomorrow you go you're gonna have to need product a on hand to ship it out to them right away and in terms of shipping, you're going to need to do shipping more often as well with the cyclical subscription model you I'm only shipping once every two months and I spend a whole day just doing shipping but with the sequential subscription you need to somehow figure out a way to include it into your current shipping schedule. Maybe if you already have an existing shop then how are you going to fit this in with what you're already doing with shipping? But the end of the day is you're going to need toe have toe worry about your subscription club or or you don't have to worry about your subscription or club more often through through the months and through the weeks, whereas with the cyclical subscription, I'm on ly needing to really worry about it once every two months and on that same topic of inventory because you have to keep inventory of things, you're going to need storage space for the inventory from my case where I'm selling jewelry, I guess I'm lucky in that way that I don't need to have a lot of space, but at the same time my business model in general is I work on a made to order basis, I only create the jewelry after I know the order has been placed and that's a great system for me because I already have the customer's money. Now I'm going to spend that money to create the product, and I'm going to ship it out, and that way, I don't need to worry about having leftover inventory, but for those of you guys who sell anything larger than jewelry, if you sell, um, toys or home decor, you know wooden signs you're going, you're going to need some storage space if you want to expect for growth as well, so definitely have physical space capabilities if you want to go down this route, so which a subscription model? Should we use and I kind of alluded a little bit to this earlier but for the most part I designed this course for people like me who people who are making a handmade product people craft their own products, physical products, right and small business owners as well so I feel like the subscript the cyclical model works a lot better to our advantage for several reasons it works better for small business owners and it's easier on our cash flow because we don't need to be keeping all that inventory in stock we don't have to pour our money into creating that inventory or into buying supplies to create those that inventory so the cyclical melt model you're really pre selling your subscription and then once the orders come in you already have that funding you already have that money that you can then spend on buying supplies so you don't have to have money up front, which is great and I said if it's similar to a pre order system you know you collect the money up front and then with that money you can then spend on the supplies you need and at the end of the day it's lean its minimum risk you on ly by as much as you need because you have a really good exact figure of how many people are in your subscription all right? So let's talk about the subscription process a question that you probably want to ask yourself is how frequently do you want your subscription to go out? So states he talked a little bit about this, I talked a little bit about this a different way to ask that is, how often can your products be consumed? You know, even if your product isn't a consumable, you know, jewelry, you can't really consuming you don't go through it, you just wear it for us long as you want, but really ask yourself, how often can a customer really be purchasing scented food, jewelry? How often can someone go through creating a crow shape, plus she out of a pattern? Right? So think about what makes sense for your customer, and if you don't know, just ask them if you have an existing audience and social media is you have a mailing list, just pop a really simple question, I'm guys, I think I'm planning on starting, or I'm thinking about starting a subscription business. Do you prefer once a month or once every two months, or what do you think and that's exactly what I did? I went into my facebook page, I just asked them that question, and the answer was obvious everyone wanted once every two months, it was easier on people's budgets, and it was you don't really want one necklace every month and have twelve at the end of the year, right? It's a little bit too much. So depending on what your product is, that might be different. You might one at once every month you might want once every two months, maybe once every three months, four months, six months, maybe once every year even and what I want you to do is set subscription, sign up deadlines on dh, then I'll show you a calendar for what that could look like, but definitely what states, he said, think about specific dates that you want to avoid in the calendar year and then kind of work backwards from that and kind of spread it out in a calendar with the frequency number that you have in mind. So the sign up deadlines are useful for several reasons they again, you know, going back to that sense of urgency and really build excitement, especially if you do marketing the right way, you know, like you keep reminding them, you keep telling them, guy sign ups closing soon sign ups closing tomorrow, sign ups closing in twenty four hours or in twelve hours, it really builds buzz on dh it it helps you sell the product without feeling like a sales person, which is kind of nice firth introverts. And the sign up deadlines helped give you time to prepare as well so I kind of talked a little bit about the process in general right where you have a specific period of time where you are collecting sign ups but one sign ups clothes you know how many people you need to create products for and then um you're shipping a few weeks after that so once you have your sign up deadline you can also kind of project you're shipping date depending on your capabilities. How quickly do you think you can produce your products? How quickly you think you can package them up and and figure them out for shipping? So for me, what I tend to do is three weeks after my sign up deadline closes in the shipping date is two weeks after that so let's look at a new example of what this looks like if you're doing once every month so here's an actual calendar and it's a little bit tiny but I'll read it out to you so let's say, for example, november first your sign up opens then we're your sign up opens and closes on november ten so you have ten days off your sign ups being open and this is when people can register to be a part of your subscription no during those ten days the orange bar going across here is you're going to start promoting your subscription basically, this is when you're going to go all in, this is your marketing focus. As I mentioned, you're going to remind people to sign up and you're going to start sounding like a really naggy grandma. But it's going to work, people are not going to see all of your promotions, they're going to see just a few of them, so definitely keep in mind that it's a great idea for every day, just on social media have one post out there on email if you want to, um, sent two e mails ones when it opens one's when it's about to close so ten days for promotions and then when the finance clothes on day eleven, november eleven you know exactly how many people you need to make products for and at that point you also have all the money, all the capital and all the funding to spend on buying the supplies you need to create your products and let's say, for example, you place all your orders for supplies on november eleventh and let's say in oprah's processing time and shipping time and finally gets to you in what's that eleven days, twelve days so now you have everything you need, all the supplies you have at hand, and then I can start production. To actually make the products and then you can start packaging it up as well. So give yourself about a week for that I think for the most part unless you're at stacy's level of six hundred subscribers you can get you can probably crank out your products and in pretty good time on dh then december one would be your shipping day and then you can again you know into repeat this is when sina opens again or if you want actually shipping they could be on the november thirtieth and then you can open subscriptions again on december first and then when center pete rinse and repeat so here's an example for if you're doing it by monthly on dh this is how I do it but I do buy monthly once every two months I know stacey does it once every two months as well it works better with their business model in general and the product that we sell so we're just basically spreading this out over the span of two months. So let's start with january first sign up opens and we're going to have sign up open for a whole month thirty days so during this time your subscription promotions you know you definitely want to be marking marketing your subscription, but I feel like because it's a whole month you don't have to be as aggressive with how you keep reminding people to sign up and then again one sign up close is you now know the exact number of subscriptions you need to order supplies for february first the first day of the next month you can order your supplies and then the following month you've ordered your supplies in february firth and let first and let's say you assume it takes you twelve days to get your products and to get your supplies in and then you take off maybe seven days to do production and to do packaging and shipping and then the following day shipping shipping on the twenty second works out pretty well and then after that you if you want you can open sign ups again right after or you can wait until the new month rolls around to start sign ups but this helps give you a really great guideline for how you khun in terms of timing how to schedule things out do you have any questions about that? Oh perfect yeah with your subscription service I don't know if the people who are subscribing to your service our new customers or existing customers so that might change your answer but but when you have the model where you are shipping and then you're opening up subscriptions right again, your the subscription customers haven't really had a chance to receive the necklaces yet do you see that as a problem with them renewing their subscription or I'm do you understand what I think so I think so but I think here's where so with the subscription it renews automatically so you don't have to wait for them to receive it in order to see if they want to stay are you asking if they want they're not sure if they want to stay on it so you they want tio is there really is yeah yeah yeah I guess yes, I mean because if they sign up with your subscription service are they signing up for a year and so basically you're only doing subscription sign ups for new customers at that time, right? So that's technically what normally happens is when you re open subscriptions right after you do shipping it's really to let new customers come in right? Right, right? Yeah, yeah questions part of my question tio so they roll over, right? Yeah, your january is going to roll over till your next one and then you're getting new customers yes, yes yes so every time I open my sign up subscription time it's really for new people to come in everyone else who's already in my subscription club they're just getting billed automatically so they're already part of that they don't have to worry about when sign up opens or closes and is there are there any restrictions on if you're selling a food product so I restrictions and tournament descriptions or well sending like food products through the mail there's no problem with I mean, if you did like a brownie of the month or something and you put off ingredients together for them to make it there's no problem with something that through the mail so I have final this is kind of a little bit outside the scope since it is really a question on can we ship food products in the mail and it's interesting you ask that because I have been thinking about starting a new business first selling a food product so I have done a little bit of my research on that topic there's this thing called cottage laws with um depending on your state, it may or may not allow you to ship out food products and you can only do a hand deliver it to your customers who have to drive up to their story to their house and actually put in their mailbox. So unless you actually get the appropriate licensing and get certified with, like, you know, cleanliness and things like that, then I think you probably also want to sign up for an llc until then, you can't really ship out products like that food products, right? Yeah. Do we have any life chat questions? I actually have a question I wondered if you could talk more about the bonus material yeah, for the class. And this is part of it right there in your system for selling subscriptions. Yeah, yeah, yeah. So this is part of that that bonus there's also another pia where I give you a whole bunch of different subscription aps and programs that can help you basically manage your subscription. So what I'm really going to do really is I'm showing you how to do it the papal button way the easy way. But there are like if you're in shopify, they're a bunch of different maps you can download to take subscription payment so that's going to be another pdf. I'm also including in that pdf a bunch of shipping options for how I can make life easy for you if you use these shipping options for for doing bulk shipping, another pdf is also the you know, pitch checklist, which is on may mainly, it focuses on marketing your subscription. So in reaching out to bloggers and reaching out to influencers, this email pitch it's really a template for you to use. So you know what to write when you're approaching a blogger and there's also a checklist so that you can be sure that you're doing the best practices using the right subject lines and et cetera.

Class Description

Not sure where your next sale will come from? A subscription product or business eliminates the guess work and is a great way to secure a steady paycheck. Find out how it is done in A Crafter's Guide to Starting a Subscription Business with Mei Pak.

Mei is a veteran jewelry-maker who earns her living by selling online. In this class, she’ll teach you everything you need to launch and run a successful subscription business. 

You’ll learn how to:

  • Create the ideal product for your subscribers
  • Package your product to move
  • Add more subscribers every month
  • Establish and maintain organizational systems
  • Engineer an amazing customer experience and keep customers happy

You’ll learn all of the logistics for running a subscription product business. Mei will show you how to manage your tasks including how to; collect payments, get existing customers to buy a subscription, print bulk shipping labels, and much more.

If you have a product your customers love and want to earn a consistent income by selling more of it every month, A Crafter's Guide to Starting a Subscription Business with Mei Pak is the perfect class for you.

Class Materials

Bonus Materials with Purchase

Email Pitch Template and Checklist.docx

Email Pitch Template and Checklist.pdf

Subscription Management and Shipping Tools.docx

Subscription Management and Shipping Tools.pdf

Your System For Selling Subscriptions.docx

Your System For Selling Subscriptions.pdf

Ratings and Reviews

Student Work

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a Creativelive Student

Great course, especially the interview with Stacey (part 6).


Mei gives lots of practical information and resources in this course.