The subscription economy has arrived. Startups all across the country are adopting the business model and are finding success. Once synonymous with magazines and newspapers, today, subscription programs are offering up everything from razor blades to paleo snacks. In fact, Gartner predicts that by 2015, 35% of large global companies with non-media digital products will generate an additional 5-10% of its revenues from subscription services.


Have you thought about getting into the subscription service business? If it’s a thought that’s crossed your mind, here’s some info that might just serve as motivation to jump in.


The Advantages

One of the major advantages to starting a subscription services company is that it can be done quickly. Internet entrepreneur Noah Kagan launched his own jerky subscription service in just 24 hours as way to show aspiring business owners that a profitable business can be launched in just one day. By the end of his self-imposed 24-hour deadline, he had generated $3,030 in revenues and $1,135 in profits.



Additionally, launching a subscription business doesn’t require a large investment. Use a drag and drop website building tool and you can have an attractive and functional site up and running for under $75. Plus, expenses are scalable. Since subscription orders are placed ahead of time, you know exactly how many goods you need to purchase should you choose to forgo inventory headaches and storage costs in your business model. All these factors make this channel for getting your entrepreneurial feet wet relatively low risk.


The Drawbacks

In the past year, there’s been a flood of new subscription services entering the market and it’s getting tougher for new businesses starting out to get their name venture noticed. It seems that there’s a subscription service for just about every niche market so just identifying an opportunity to exploit – never mind launching – is tough.


Just so you get the idea, here are a few that are currently in operation:



The Future

Unfortunately for the small business owner, large corporations from around the world are also entering the subscription economy as a way to bring in additional revenue. And as mentioned above, Gartner predicts that a significant number of large global companies will adopt the business model over the next 24 months which is likely to make it even more challenging for the small scale entrepreneur to get his piece of the pie. For instance, a multinational retail-clothing company might choose to launch a subscription service that delivers tops and accessories to its members every month, which could make success stories like the one of Trunk Club even rarer. (FYI: Trunk Club is a men’s clothing subscription program based in Chicago that grew from four employees in 2009 to over 300 today.)




So why not give it a shot now before the window of opportunity is too small. As Noah Kagan preaches, let go of your fears and just get going!


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