3 Benefits of an eCommerce Subscription Model

Posted at Nov 12, 2019 5:04:48 PM by Michelle Sternbauer | Share

Embracing an eCommerce subscription model is becoming vital for businesses to survive in today's online marketplace. Retailers like Petco, Chewy, and Amazon use eCommerce subscription services to help convert one-off buyers into repeat customers. While there are many benefits to offering subscriptions via your website, this article will discuss the top three advantages of a subscription model.


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1. A Steady Source of Revenue

The main benefit of offering subscriptions for your eCommerce products is that it provides you with a constant revenue stream, which leads to more predictable cash flow. Every time a customer subscribes, you get sales you know you will receive on a monthly basis.

An eCommerce subscription model also makes it easy for business owners and marketers to analyze revenue by subtracting any cancellations from the total subscriber count and multiplying that number by the subscription cost. The more customers a business can convert into subscribers, the more accurate the reporting and forecasting will become.


2. Instant CUSTOMEr Loyalty

Customer loyalty is the goal all brands wish to achieve, but obtaining customer loyalty can be expensive and time consuming. Previously, a brand needed to spend millions of dollars on advertising and market research to establish customer loyalty. But, by offering eCommerce subscription services, you automatically build customer loyalty because the customer is ordering your product on a set interval - meaning they like what you are offering.

Customers will then begin telling their friends and family about your product and how easy it is to get it...so you are letting your existing customers do your marketing for you.


3. Better Inventory Management

The more subscribers you obtain, the better you can plan for inventory. Subscriptions allow for better forecasting and, in turn, will save you from overspending on wasted inventory.

Better inventory forecasts benefit companies offering perishable products like food and drinks the most, but knowing how much is needed in stock can give a significant competitive advantage to any company looking to get into an eCommerce subscription model.

In conclusion, offering eCommerce subscription services can help businesses obtain a constant source of revenue, build customer loyalty, and manage inventory more effectively.

Need help building a website to support your eCommerce subscription model? Contact the team at THAT Agency today.


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