From a small box of board pins to a mansion, nowadays everything is sell-able with an online store. And the emergence of these online stores gave birth to some really profitable online business models. Once you follow or apply these models to do business, nothing exactly would be impossible to sell in today’s dot-com world, no matter if you are selling them in bulk or based on memberships.
Keeping those superb business models in mind, with this post, we would talk about a concept that is comparatively new in the online business scenario – selling subscription based products. We would further move on and elaborate how to establish a business selling subscriptions with WooCommerce.
WHAT SHOULD YOU KNOW ABOUT SELLING SUBSCRIPTIONS?
In any case, this is not at all a new business concept. And it’s absolutely normal to get the flashes of newspapers and magazines whenever you hear the word “subscription”! Today, however, anything that is a necessity or a passion can be purchased or sold by subscription. Starting from clothing to flowers, you name it and it’ll be at your doorstep each month, quarter or year!
As far as the business definition goes, subscription revenue model is based on paying a settled amount for a particular time-span for a specific product. The model allows you to sell products and services with recurring payments.
What’s so good about it?
This particular form of business model can be profitable for both buyers and sellers.
- Helps them forecast revenue to be earned over the subscription term.
- More chances of retaining customers since the business model require users to actively opt out in order to change preferred sellers.
- Automatic renewals can bring home more revenue from the users/subscribers who forget about renewing.
- Effective for cross-selling and database marketing as it requires collecting more data than mere payment info.
- Helps to predict the cost as per the term of the subscription plan
- Can change or cancel service if need be (although they should watch out for penalties applicable for breaking a contract).
- Comparatively low cost of entry to out-and-out purchase.
- Seat-based or tiered subscriptions can be helpful in keeping the cost down.
- With time, users can get the flexibility to spread cost of the subscription.
THE STORY OF PETFLOW!
We all love to hear about real-life experiences and inspirational journeys before commencing a new venture. For those, who really yearn for making a difference with subscription-based business, here’s a great story that tells how things can really turn out to be a joyride, only if you have a great business plan.
In the year 2009, a story published in the New York Times official website spoke at length about the trend (at that time) among online entrepreneurs, i.e. subscriptions. And they chose Alex Zhardanovsky’s website PetFlow, established in 2010, as an example. The man went on looking for a new business concept after selling his online ad business, and came across a model that can be used to sell pet foods online by subscription because he knew it very well that “Dogs never stop needing to eat” .
To examine the success of this business model, he and his business partner came up with a simple, yet effective plan –
To test his theory, Mr. Zhardanovsky and his co-founder, Joe Speiser, set up a Web page in 2009 with a form that asked customers if they would be interested in signing up for regular deliveries. They then placed a few ads online and waited to see what happened. “We had an overwhelmingly positive response from our customers who wanted to sign up for the service,” said Mr. Zhardanovsky, who lives in New York City and who proceeded to introduce PetFlow in 2010. (Source: nytimes.com)
Further, the company’s data revealed –
In its first month, July 2010, the company shipped about 60 orders; by January of this year, that number had leapt to 27,000. In 2011, PetFlow exceeded $13 million in revenue — with 60 percent of its sales coming on a subscription basis — and it projects revenue will exceed $30 million this year. “I’ve come to appreciate,” Mr. Zhardanovsky said, “that subscription models are, in so many ways, the holy grail of business.” (Source: nytimes.com)
But, this was just the beginning of subscription-based online business. Now, you can see companies in almost every sort of industry implementing this particular form of business model.
Establishing a WooCommerce store for subscription based products
For selling subscription based items, all you need is an excellent business plan, products that can be termed as necessity (although this completely depends on your business plan and target audience), a smart and user friendly e-commerce platform and some really dexterous developers. Yes, you will need developers to help you set up the site because even if you have knowledge of coding, you will need them to integrate payment gateways and other for complex fixes. If these are not done by skilled professionals; warning! You might get stuck with a flawed website going forward.
SUBSCRIPTION PRODUCTS AND WOOCOMMERCE
Not every e-commerce plugins of WordPress is as capable as WooCommerce. We are not saying this because we are WordPress-WooCommerce specialists, but because it’s a blatant truth. This simple plugin is giving other self-styled e-commerce behemoths a run for their money. The reason is as simple as it is – it’s a superbly user-friendly, absolutely free e-commerce plugin.
WooCommerce transforms a simple WordPress site into a fully-functional e-commerce store. That is, once you set up this plugin on your WordPress site, new pages will be automatically created for the site, like the product page, cart page, and checkout. Another very good thing about this plugin is it supports PayPal payment gateway by default.
However, there is one thing that sets WooCommerce apart from any other plugin in the WordPress directory and that is supporting add-ons and extensions. These add-ons can be installed in a WooCommerce set up to increase its functionality. For example, if you wish to include a cloud-based search bar in your WooCommerce site, you can install “InstantSearch+ for WooCommerce” available at WooThemes and enhance the usability of your site.
WooCommerce extensions for selling products based on subscription
Keeping the concept of selling subscriptions in mind, we looked for certain reliable WooCommerce based extensions and decided to mention only a couple of them.
WooCommerce Subscriptions ($199-$399)
The extension lets you sell products with recurring payments through a Woo-store. Any type of product can be sold through this – physical, virtual, and downloadable. You can also sell memberships for content with the power to control access and even apply discount coupons to it. The process of adding each subscription product is properly mentioned in this WooThemes document.
The extension performs a number of activities as part of the renewal, payments being the base of a larger renewal process. The tasks include order generation to trace payment, emailing sellers as well as buyers of the renewal, and at times even processing the payment. Although it depends on which renewal process you chose – automatic or manual. WooCommerce subscription supports two different ways of accepting recurring payments – automatic payments and manual payments. It supports multiple gateway options and any of the gateways can be used to practice manual renewal payments.
We also come across other WooCommerce extensions to sell subscriptions, but all of them are third party plugins, none from the house of WooThemes itself. Here is one from that lot which seemed easier to use, packed with good features.
Subscriptio – WooCommerce Subscriptions ($29)
This is another WooCommerce extension with a cheaper price tag that lets you sell subscriptions. No matter whether you are selling tangible or intangible products, the extension will give your Wooshop the power to sell subscriptions effortlessly. You can set a payment cycle, free trial period, subscription span and set up fee. The extension automatically sends payment reminder emails, generates renewal order, sends overdue payment reminders (not obligatory), and it can even send cancelation warnings and suspended subscription emails if you activate these settings.
Third party help
While these plugins will help you set up a site that functions as subscription seller, you will still require third-party help if the requirements and customizations are complex ones. For advanced tweaks and special functionalities, it is highly advisable to look for WooCommerce experts with ample skills and prior experience in this domain. So, even if you know coding and other ways of adding extra functionalities to a subscription-based site, we would still advise you to hire the right people for achieving impeccable results.
Although the days of paperboys throwing newspapers at your doorstep are on the verge of extinction, the delivery the superb concept of subscription selling, which started off with newspaper and magazine businesses, is here to stay. From shoes to online courses, web-based subscription-only businesses are regularly sending products to the ever-expanding group of online shoppers. And when you combine Subscription selling with WooCommerce – the best WordPress e-commerce plugin – rest assured, you are going to enjoy the best of both worlds.
Good luck with your subscription-selling business, and, yes, don’t forget to let us know your views in the comments.