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Why Subscription-Based Services are the Future and How You Can Apply it to Your Business

Is your business the next Netflix? This widely popular streaming service boasts a massive 220 million subscribers with its premium subscription plans. Entrepreneurs can apply a subscription-based service model, whether running a manufacturing business, service-based or selling product model, no matter the industry or the specific niche. If done effectively, these strategies will help small business owners earn more money.

Subscription-based services have really taken off in the past few years. Businesses of all kinds are starting to use the subscription model to continue offering new and improved features to their clients or customers. In the next paragraph, we'll look at the different types of subscription-based services, and after that, we'll see some top companies that are applying subscription-based services and then the pros and cons of this business model.

Types of Subscription-based Services

If you want to implement a subscription-based service in your business, you should first understand the different types of these services and how each works. The three major types are replenishment, curation, and access subscriptions. See what they mean below:

Replenishment Subscription-based Service

A replenishment service is an option for a subscriber's product or service choice to be remembered and subsequently renewed or replenished. Here, a chosen product or service is repeatedly made available to a user at specific intervals, for example, weekly or twice a month.

Curation Subscription-Based Service

A major characteristic of the curation service is that it offers the subscriber a bit of adventure or surprise. This happens because the servicing company monitors users' activity or choices to understand their preferences and employs variety when replenishing their chosen products or services. The exciting benefit of this curation subscription-based service is that subscribers won't know what to expect when their next product or service arrives.

Access Subscription-Based Service

In this model, only subscribed users receive access to a list of products, services, or benefits. This creates exclusivity and a fear of missing out (FOMO).

Top 6 Companies Who Use Subscription-Based Services


Launched in 1994, Amazon is the sixth biggest retailer in the world. With a massive customer base, consumers can buy almost anything from Amazon. They do the replenishment subscription-based service very well.


Founded in 2016, Ritual focuses on multivitamins and health supplements by making it easy for customers to choose what they need and deliver it to their doorstep. This Los-Angeles based company equally makes use of the replenishment subscription service.

Blue Apron

Blue Apron is a popular company that provides curated subscription services. It supplies fresh food ingredients and exciting recipes. Subscribed customers can expect something slightly different with every order.

Stitch Fix

Stitch Fix is an online delivery service that provides personalized styling services for men, women, and kids. Their customers enjoy receiving varied styles that are budget base and stylish delivered straight to their door.


Nature Box is a go-to for healthy adaptogens, functional foods, and cannabidiol (CBD) snacks. Rather than choosing to surprise customers with a variety of its snacks, they provide access through a membership plan. Members can enjoy a free initial order and 20% to 40% discounts on additional orders.

Thrive Market

Thrive Market is an online organic food retailer that provides subscription and autoship services. In this setting, members are billed $5 for a monthly subscription and receive perks like free full-size gifts, discounts, and 30% off the manufacturer's suggested retail price (MSRP).

Pros and Cons of Subscription-based Services

Is a subscription-based service always the best choice? Well, certainly, it's not the only choice. Like any other aspect of a business, choosing a subscription-based model should be based on an analysis of your industry, specific field, prospective customers, and the like.


Good Customer Relationships

Subscription-based services put companies and customers in frequent communication. The customer understood the company and agreed to be in a relationship.

Increased Customer Retention

Companies can retain customers better by understanding their choice of products or feedback. Now they can strategically provide products or services related to their customer's preferences. This is enticing and will likely keep the customers longer. The real benefits here are that companies spend little money retaining customers; secondly, the company can focus on acquiring new leads.

Steady Revenue

A subscription-based service includes repeated orders of products or services. Concurrently, the customers receive satisfaction while the company gets steady revenue.


Difficult Follow Through

Imagine owning an e-commerce store and having 100 people subscribe to receive sizable orders around the same time every month through your replenishment service.

The sheer size of the order, the number of customers, and the fact that the products will have to be shipped around the same time can create a logistical nightmare. In such instances, a minor delay could lead to many failed deliveries and unsatisfied customers.

Interest Problems

Users of a replenishment service could lose interest in receiving the same product over a long period. The same thing happens in a curation service when the servicing company chooses products that don't interest their subscribers. Businesses must be mindful that users' preferences must be deeply understood and applied.

Contract Hesitancies

Some customers might feel nervous about entering into contracts or membership agreements for good reasons—for example, committing to the monthly payments and the concerns about the ease of the return or exchange policies. But contracts and membership agreements are crucial elements of subscription-based services. If customers don't feel comfortable, this can result in businesses having low subscriptions from customers and, worse, negative reviews.

Before deciding whether to experiment with a subscription-based service in your business, ask yourself these questions:

  • Is there enough variety in your products or services?

  • Are your products or services interesting enough?

  • Are your products or services easily sourceable regarding vendors and affiliates?

We hope you have enough information to decide whether or not a subscription-based model is for you. Remember, always have your customers at the forefront. Also, see other informative articles on the BGV blog.

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