Subscription Business Ideas: Niches To Consider
With subscription businesses growing 5-8x faster than standard alternatives (Zuora, 2021), now could be the perfect time to enter the market. Scalability is certainly an advantage with subscription sales, but there is a lot more to it.
If you want to use this lucrative business model, finding the perfect niche is crucial. There are many factors to consider beforehand, such as target audience, personal knowledge, and competition.
In this article, Upscribe will be sharing a handful of different niches that you could consider when starting your own subscription business. We also touch on the advantages and possible disadvantages of each.
Upscribe can help to make your subscription journey easier than ever before. We have tools that can supercharge your eCommerce business, keeping your customers happy while allowing you to focus on growth. Our onboarding process is also incredibly straightforward and can be done in just a few clicks.
What Is A Subscription Business?
A subscription business is where a company provides a product or service to a customer on a regular basis. Payments are made by the customer monthly or yearly in most cases; however, this can be decided by the business.
The main goal of this model is to retain as many customers as possible. Acquisition is also important, but focusing on recurring revenue is crucial.
How To Pick The Perfect Niche For Your Subscription Business
Choosing your niche is a crucially important step for any business. It’s not something you should rush, and a variety of criteria should be considered before making a final pick. Here are just a few things to think about:
If you have knowledge within a particular industry, this could help you to jumpstart your business. Regardless of whether you know a range of contacts, or simply remember a lot about a particular product range, it can all help.
One of the most common ways of building knowledge and experience is through working in a sector. Could you build a subscription business around your current line of work?
Identifying A Problem
Finding a problem within a particular industry is another approach. This may become obvious after lots of research, or a solution may come to you randomly throughout a normal day. It’s these thoughts that have created successful businesses in the past.
Keeping a note of these ideas could be the key to starting your subscription company. Take a look into the viability of each and potentially ask friends for their input.
When promoting subscription sales, it’s key to focus on the solution. For example, in their branding and positioning, Hello Fresh reminds their customers that they offer healthy eating options without the need to plan or shop each week.
Working on something every day can get boring unless you’re passionate about the niche. You could center your business around your hobby or skill set, for example. Truly enjoying what you do will keep motivation levels high, allowing you to get more done. As a result of this, your chances of success will be greater.
Subscription Business Ideas
Now it’s time to look at some ideas for your business. Below is a list of different categories, which you can use directly or focus down to be more specific. Be careful when doing this, however, as you don’t want to isolate a large portion of your potential audience.
Keep in mind that while service subscriptions do excel too, this list of ideas will be focused on products. Without further ado, here are some niche ideas with strong potential:
To start this list, let’s introduce one of the most popular subscription business models. Just for context, the size of the subscription box market alone in 2021 was $22.70 billion.
With consistent growth year on year, these numbers show no signs of decreasing anytime soon. It’s estimated that this industry will grow to $65.00 Billion by the year 2027. It goes without saying that these numbers are truly impressive, to say the least.
Subscription boxes can be a random assortment of goods, delivered on a regular basis. Usually, these products are tied together with a specific theme. Examples of businesses that are doing things right include:
- Loot Crate
- Sips By
- Bark Box
A subscription box business plan can be used in combination with any of the niches listed below. If you are passionate about a certain sector and can think of new product combinations, creating a box each month could work.
Pros: Seemingly tailored packages can help to improve customer loyalty. The sector is growing at an exponential rate.
Cons: Planning a random assortment of products that are somehow linked can get tough as time passes.
Food And Drink
Using the subscription business model in the food and drink niche is something that many entrepreneurs have tried. However, being too general with your approach can come with massive consequences.
When looking at some of the most successful boxes within this area of operation, they tend to have one thing in common. They pick a single food or drink that people are passionate about.
Cheese, chocolate, and wine are all great examples. These products are loved by many, but also have enough variations to keep the experience fresh for customers.
You also have the opportunity to cater to people that enjoy making their own food. Cooking, baking, and brewing packages are all options to explore.
Larger sub-niches, such as healthy food or vegetarian cuisine, may not perform as well as expected. This is mainly due to market dominance being asserted by the likes of Blue Apron.
Alternatively, you can also provide a subscription service that caters to a specific interest group, such as vegetarians, fitness fanatics, and so on! For instance, Four Sigmatic is one of our clients, and the online store offers crash-free coffee, almost-unbelievable plant protein, and other elevated essentials for those who want to lead a healthy lifestyle.
Pros: Most food is consumed regularly, meaning you can increase the frequency of each subscription. This can lead to more revenue and a stronger relationship with customers.
Cons: Some parts of this niche are saturated, or highly competitive. Keeping inventory can result in a loss.
Health And Beauty
Another example of a profitable industry is the health and beauty sector. Products within this niche get used consistently within a short period of time. This makes them perfect for being offered as a part of a subscription service.
Makeup, shower gel, and other personal hygiene products could excel if sold monthly. These types of products make popular gifts, allowing you to reach a larger audience. For instance, Caldera + Lab provides a subscription of pharmaceutical-grade skincare products for men.
People are prepared to spend more on luxury products within this niche. Incorporating big brand names into each subscription will enable you to charge more while providing a discount to your customers for becoming loyal subscribers and potentially receive a healthier profit per sale.
Pros: Items are used fast within the health and beauty sector. There are lots of different products, giving you a range of options to research.
Cons: These items can be more of an impulse buy, meaning people may think twice before committing to a long-term subscription.
Items Of Clothing
Keeping your wardrobe stocked throughout the year is something everyone needs to stay on top of. Offering full outfits or unique additions to customers can be a sure-fire way to success.
Items of clothing that people are passionate about can include socks and shoes. While this may pique the interests of many, these types of subscriptions may be less frequent than others. After all, very few purchase new shoes on a monthly basis.
Targeting a large area within this niche could be perfect, especially if you are looking to take payments for items on a monthly basis. A good example could be active wear, or accessories for those who like to stay fit.
Pros: You can receive good margins on products. Easy to keep things interesting, with seasonality playing a large factor in keeping customers engaged.
Cons: Lots of different variations to manage, as offering a large selection of sizes is needed.
Of course, we cannot cover every subscription category in this post. Here are some other ideas that might offer you a source of inspiration for your business:
- Hobbies Either focused on a specific hobby or a subscription service that offers new products for adventurous individuals.
- Sports While the likes of football may now be a saturated market, smaller sports can offer a unique opportunity to attract customers.
- Pets Who isn’t obsessed with their furry friends? When it comes to pets, people are happy to part with their cash.
- Plants Another niche that some individuals are incredibly passionate about. This could even be niched down into cactuses, succulents, or seeds.
- Books Again, selecting a sub-category within this niche could be the best approach. Horror, comedy, non-fiction, or perhaps something even more unique!
Ready to Create a Subscription?
That concludes our list of different niche ideas for a new subscription business. It’s important to remember that selecting the right category often comes down to preference. Being passionate and knowledgeable about your chosen industry can benefit you hugely later down the line.
No matter what niche you decide on, Upscribe can help you to scale your business. We can ensure that your buyers have access to a branded customer portal, allowing them to manage their subscriptions with ease.
Untangle the numbers with our revenue monitoring system, which tells you exactly how much you’ve generated from active subscription plans on a daily basis. Book a demo with us today and see how we can take your eCommerce business to the next level!