Business Owners: Don't Take Subscription Models for Granted

My neighbour Clare runs a small business selling handcrafted eco-friendly candles from her cozy little apartment. She started out selling at local weekend markets all around Melbourne and has now expanded to an Etsy store. Every month was a gamble and she never knew exactly how much money would come in. With bills to pay and inventory piling up she knew she needed a new approach to grow her business.

While doom browsing online, Sarah stumbled upon something that sparked an idea: subscription models. Through ads on YouTube videos of the people she subscribes to she saw how companies like 'Dollar Shave Club' and 'Birchbox' turned simple products into recurring revenue streams. The idea stuck with her.

Six months back, one afternoon as Clare was preparing a fresh batch of her signature lavender and vanilla candles, she had her Oprah Aha moment. What if she could send her customers new candles every month? A subscription box perfectly curated for people who love indulging in seasonal fragrances. She built a simple subscription service on her website where customers could sign up to receive a candle delivered right to their door each month. Clare knew she could keep it personal because her business was niche.

The first three months were nerve-wracking. No one signed up but soon enough orders began to roll in. Regular customers who had previously only bought a candle or two from her Etsy store signed up at $30 per month. Clare had found her loyal tribe. Her first 35 subscribers brought in steady revenue that she could rely on each month. It wasn’t a huge number but for Clare didn’t have to worry about the ups and downs as much. She didn’t have to spend as much time on marketing to get one-time buyers. Her focus shifted to nurturing her relationships with her subscribers instead.

Clare's recurring revenue allowed her to plan her expenses and focus on growing her brand. She knew she had $1,000 coming in every month just from her 35 subscribers.

Clare had regular touchpoints with her subscribers. She sent handwritten notes with each candle, shared Instagram stories/reels about her creative process and even gave sneak peeks of upcoming scents.

With each shipment, Clare collected feedback. Some customers loved florals, and others preferred earthy scents. She started offering customization options that helped reduce churn.

Clare wasn’t looking to scale or explode into a massive company overnight. She wanted to grow sustainably while maintaining the personal touch that her customers loved. Now that she had some time to network, she took courage and walked up to the main street and spoke to the owner of our local boutique asking if she could supply them with subscription boxes for their VIP customers. Clare shared her IG page with them. She stumbled into a new opportunity: partnerships. By partnering with local businesses Clare expanded her reach without sacrificing quality. Soon enough, her candles were being shipped as part of wellness kits, spa packages and gift bundles.

For Clare, it wasn’t just about selling candles anymore. It was about building a community of people who shared her love for small-batch products. Her subscription model allowed her to have money coming in to cover her production costs, grow her business at her own pace while fostering deeper connections with her loyal and new local customers.

McKinsey reports that 15% of online shoppers have signed up for one or more subscriptions often because they want convenience, personalization and discovery all things that smaller, specialized businesses can deliver exceptionally well.

Conclusion

If you’re a small business owner in a niche market, the idea of launching a subscription model might feel daunting. I shared Clare's story start to encourage you to start small, focus on building a loyal customer base and listen to their needs. Subscriptions can provide a steady revenue stream while deepening your customer relationships. Turn your one-time customers into lifelong subscribers. This is a market worth tapping into. Just look at Alex Hormozi and his team's success with 'SKOOL' built on this very concept.