How to Price a Subscription Box

blog getting started resources Aug 01, 2021

 

Deciding what to price your subscription box can be one of the most agonizing things to figure out.  You go back and forth with numbers wondering where it should land.  I get it. 

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There are a few key elements to think about when you are deciding your price.  Let's break it down.
 

 

Cost of Goods:

The most expensive part of your subscription box will be the products you put inside.  Once you've figured out a few months of your box, do some research on pricing for those products.  Set a realistic budget for your product costs each month.
 

 

Packaging Costs:

Packaging is one of those items we tend to overlook.  Boxes, labels, stickers, shreds, tissue paper....it all adds up.  You have to account for the cost of your packaging in your price.  
 
Don't forget your printed inserts, will you have 1 or 3 inserts?  Those cost too!
 
 
 

Sales Tax:

Subscription Box Owners figure tax a few different ways.  You can add it into your total, so you get that nice round price, or you can add it on to the purchase price each month. 
 
If you decide to include it in the cost of your box, know exactly what that amount is.  
Check with your accountant or the Small Business Association in regards to your state and their requirements
 

 

Shipping Costs:

To include or not to include, that is the question!!  So many box owners do it both ways.  If you are including shipping in the price or have added a flat rate shipping on top of the price, you need to know how much this can vary. 
 
Plug different addresses in and get a good understanding of this potential cost before setting your price.
 
 

 

Fulfillment Costs:

What does it cost to fill your boxes?  Whether you are doing this yourself or outsourcing it, it is important to figure this cost out. 
 
So many times, as solo entrepreneurs, we don't include the costs of our own work. But at some point, this job will be hired out and you want to make sure you've captured the cost in the beginning.

 

Industry Average:

I love to research other boxes in my own industry.  How much are they charging?  What are people paying for similar boxes? 
 
Look at your industry.  You don't want to be the lowest priced box or the highest priced box in your industry.
 
 

 

Profit Margin:

We aren't doing this for free.  This is hard work and we are building a business that will pay us well. 
 
A healthy profit margin is necessary for working capital, and a sustained business plan.  I don't ever recommend pricing your box with less than 30% profit margin.  The goal would be to get you to the 50-70% profit margin range over time.
 
Your profit margin will improve as you grow, but don't start off too low.  Make smart buying decisions and really know your costs.
 
 
 
I see so many new subscription box owners pricing their boxes too low.  You can eventually raise your prices, but it's better to start a little higher than to price yourself so low.  You are creating a healthy sustainable business here, not working for pennies.
 

 ️❤Sarah

 

Learn from me:

  • Subscription Box Blueprint eBook: This $10 ebook covers logistics from product selection to packaging to shipping. Plus a 90-day launch plan and bonus ‘Instant Scripts’ for your social media.
  • Launch Your Box: My complete training program that walks you step by step through how to start, launch, and grow your subscription box business.

 

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