7 reasons to sell products and services on a subscription basis

Paying for a product or a service on a weekly / monthly / annual basis is not new. It is quite common, especially for the services. How are you paying for your cable service, newspapers or even the milk that is delivered to your doorstep ? Do you pay on a daily / one-time basis ? No. We pay on a monthly basis. Our credit card or the bank account is automatically charged at a given date every month. And that is called subscriptions.

Another term that has a similar process is : memberships. Think about the swim clubs for our children or the zym (though we never show up!). They collect a bi-annual or annual subscription from us in the name of membership.

You get the point. People are used to the subscription economy. So why not we sell our products and services on a subscription basis and collect recurring payments on a monthly or annual basis?

More and more online businesses are now selling subscriptions or memberships. Especially, those providing online services sell memberships and charge the customers on a monthly or annual basis.

Subscription ecommerce businesses take many different forms and serve many different niches. Some call it as memberships, while a few other refer it as recurring sales. What they have in common is the sort of customer need or problem they address. Very often these problems or needs include some form of product replenishment, product discovery, or a service.

Still not convinced about the subscription model for selling your products and services online ?

Here are the top 7 reasons why you start selling subscriptions and memberships in your website:

Recurring revenue / the return on investment

Do you know how much money your online store will make in any given month ? The obvious answer will be NO. But if you sell your products on a recurring payments basis, you know how much you are going to generate by selling online.

e-Commerce subscription businesses offers a very good return on investment. Because, a newly acquired customer is likely to make repeated payments / purchases for your products and services. Every online business invests heavily on acquiring customers. What would be the use if you had spent hundreds of dollars on acquiring a customer and could not retain him with repeated purchases?

Better Customer Retention

The higher percentage of customer retention is one of the most trusted ways of increasing the profitability of any business. Your ecommerce subscription business will have a better chance of success if you get the customers to return and make repeated purchases.

Even if the customer cancels the subscription (churn) after two payments, you still had a better return from him. In reality, the customer is likely to stay longer to consume your products or services.

This will be particularly true for businesses that offer services, example: finance consultancy, software-as-a-service. Subscriptions offer you an opportunity to establish a long-term relationship with your customers.

Better Customer purchase experience

One of the adverse effects of technological advancement is that it made people lazy. We are becoming more lazier than ever. This is true when it comes to purchasing a product or service.

Just imagine, would you be willing to visit your telecom operator to pay your mobile bills every month? The answer is no. Even if it involves paying online, would you do it manually every month? Still No. Many of us simply do not have the time. We allow the telecom company to bill us automatically. We are comfortable with that recurring payments arrangement.

Same goes when a customer purchases a product or service that needs to be replenished / provided every week / month / year.

Loyalty and trust

We have launched J2Store about 4 years ago in a small way. We wanted to offer a simple, easy-to-use ecommerce solution for the Joomla users.

The first step to success in the business is establishing loyalty and trust among customers. It is not the money. Never. Customers hunt for values through experience. If you offer a very good product or a service, they will stick with you. Even if your product or service does a lot less than the competition, they will market / recommend your product.

ECommerce Subscriptions is a great way towards establishing that loyalty and trust. That is what will make customers to stay and come back.

Manage your inventory and resources effectively

When you sell your products and services on a subscription basis, you exactly know how much stock you should have or how much resources you would need at any given point of time.

If you have 100 subscribers who purchase coffee every month, you exactly know the quantity of coffee you need to supply the next month. This means you can place your orders properly to your vendors. This avoids over-stocking. Besides, knowing exactly the quantity can get you a better rates from your supplier.

But if you sell your products one-time, how will you know the quantity required next month ? You would had to do a complex math by considering previous sales history, your promotions and seasonal differences. And that is a lot of guess work and often inaccurate.

You can avoid this situation totally by selling subscriptions for the products

Recommended and powerful

Just look at the bigger and successful companies. Your telecom operators, fitness clubs, Netflix, BirchBox, Google. All them have a subscription and recurring billing for their products and services.

The growing demand for convenience is the primary reason why all online businesses are moving towards a subscription based model of retailing. According to marketing metrics, the probability of selling a product to a new customer is 5-20%, but to the existing customer is 60-70%.

The cross-channel marketing report says 70% of the company has shifted or chosen subscription based business after seeing an upsurge in the profit line. It not only retains old customers on the store, it also brings in more new customers to the site. The revenue is predictable; hence it brings stability and security to the business. Moreover, it works well on e-commerce perspective.

Easy shipping

Make an impression; it matters a lot. In ecommerce, the best impression can be made by ensuring timely shipment for customers. The expectation that the clients keep on you is the perfect delivery, and the product should reach them on time. This you could do very well when you sell on a subscription basis.

You know exactly when you need to deliver a product or service to a customer. Following a unique shipping procedure and making it on a regular basis will make a lot of difference in the business.

Ready to launch your subscription based products and services ? J2Store can help you with it.


J2Store, the most favourite ecommerce toolkit for Joomla, now supports Subscriptions and Memberships. You can sell subscriptions and memberships and accept recurring payments.

You can accept recurring payments with Stripe, Square, PayPal, BrainTree, and Mollie.

You can manage your members effectively, handle the expiry, renewals and more with the Subscriptions app.

Start selling subscriptions and memberships today

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