So you want to build a subscription website business, but you’re wondering if the subscription business model is even successful.

It’s an understandable question. After all, you don’t want to plan a business that won’t work out.

So, what’s the story with this business model?

Is the Subscription Business Model Successful?

First, yes, subscription business models can be very successful. Some of the best businesses in the world, such as Microsoft, Apple, and Amazon operate highly profitable subscription businesses.

But… you’re really asking the wrong question here.

A subscription business model is just a business model. A quick look at a company like Netflix tells you right away that the model can be successful.

What you really need to ask is whether a subscription model would work for the type of business you are planning, and what you need to do to maximize your chance for success. Not all businesses are suitable for subscription businesses…

Take, for example, house painting. It’s a high priced job that you need done every couple of years, not monthly or yearly. Subscriptions don’t work in this industry.

For a subscription model to work in an industry, the purchases have to be relatively small relative to the purchaser. Rental agreements, where rent can take up to 30-40% of after tax income, might be the upper limit here. But, the smaller the price point, the easier it is to sell consumers on subscriptions.

You also want a product where there’s repeated use, where the product is consumed over a relatively short period of time, justifying another purchase. Amazon Prime charges a monthly fee for free/cheap shipping, but once the month is over you no longer have access to the discount. You can ship a lot of goods in a single month, but you quickly use up that window of time.

It really helps, as well, if you are selling a product that is really wanted, solves a pain point, or is required for someone to do their job. Take Microsoft Office, for example, which is a subscription based product at the time of writing this. This software is critically important for many people to do their work and function in the business world. It becomes very easy, then, to charge monthly because your customers are effectively captive to your product.

Making the subscription business model successful also requires strong marketing and execution. If you’re thinking of starting a subscription business, you really need to have your target market, offer, and branding down well.

You need to identify your niche market’s needs, find an attractive point of differentiation, and then come up with a compelling package at a fair price to make a sale. Once you have all of that in place, you really need a good, cost effective, strategy to get your offer in front of as many qualified prospects as possible.

For us, this comes down to a solid SEO plan and social media effort. For you, that might come down to sending physical mail and running newspaper ads. It all depends on where your target market hangs out.

Even the best subscription model will flounder if the execution is sloppy. Whatever you do, make sure to do it to the best of your ability. We’re in a competitive world, and there are a lot of people grabbing for that same dollar. Do the work, demand high quality from those around you.

What Is A Subscription Business Model?

A subscription business model attempts to sell goods or services by signing up the customer to an agreement for ongoing payment. Typically, that ongoing payment is required for continued access to the product or service.

So, now that you have this basic question answered, make sure to read: Do Subscription Websites Work?