Recurring Payments: Selling Monthly Subscriptions

Posted 4 years ago by Max Komonov

Recurring payments, or桂subscription billing, has become a桂hot topic in桂the桂ecommerce world, with many business owners making the桂switch to桂this payment model. This is桂largely due to桂the桂growing current customer demand and桂the桂opportunity it桂creates 닥늡곶桂sellers to桂completely eliminate repeated checkouts and桂purchases.

Subscription payments have become a桂shopping preference 닥늡곶桂many, with every year, making it桂a桂great market opportunity 닥늡곶桂new and桂established business owners alike. Behind this business model lies a桂huge opportunity to桂earn regular and桂consistent income without relying on桂constant customer reach. This is桂optimal 닥늡곶桂businesses with a桂low ad桂budget and桂those who wish to桂improve customer relationships while creating long-term customers.

In桂this post, we�셪l be桂covering everything you need to桂know about recurring payments, how they work, and桂how you can get started on桂recurring billing (there�셲 no桂need to桂invest a桂fortune upfront!). We�셪l show you how it桂can improve customer retention and桂help you stand out from your competition. Our goal is桂to桂walk you through the桂entire process and桂help you decide if桂this is桂the桂right choice 닥늡곶桂your business.

What is桂Recurring Billing?

Recurring payments are the桂foundation on桂which businesses can charge their customers in桂a桂recurring way, either on桂a桂monthly, weekly, or桂simply yearly basis, 닥늡곶桂a桂set product or桂service. It桂allows business owners to桂leverage their sales and桂customer satisfaction by桂offering them affordable prices through the桂use of桂low monthly fees, all without having to桂significantly lower their profit margins.

Under the桂subscription business model, companies are focused on桂customer retention and桂building long-standing revenue more than the桂number of桂sales. The goal is桂to桂achieve steady and桂predictable income while gaining customers�� trust, which can hopefully lead to桂new business opportunities.

Ultimately, a桂business wants to桂keep subscription cancelations as桂low as桂possible. As桂long as桂you are gaining new subscribers faster than you lose them, revenue should keep coming in, and桂your return on桂investment should remain high. You�셪l want to桂make sure to桂rely on桂suppliers that are willing to桂work a桂reasonable price 닥늡곶桂you, and桂choose a桂recurring payments plan that is桂designed 닥늡곶桂sellers to桂succeed without taking away half of桂your profits every month. At桂붚죕쳔, we桂are proud to桂offer affordable plans so桂new sellers don�셳 have to桂worry about high startup costs that lead many to桂close their online stores before they have time to桂mature into established businesses.

桂How Does Recurring Billing Work?

In桂a桂recurring payment model, sellers set a桂fee 닥늡곶桂their products or桂services that is桂then charged to桂the桂customer�셲 card information on桂file as桂an桂automated and桂recurring payment. These can be桂made under any桂paid period the桂seller chooses to桂add; it桂all depends on桂the桂product or桂service. Some products require a桂weekly subscription fee, some require monthly payments, while others only require yearly payments. In桂the桂end, it桂all comes down to桂what your customers feel more comfortable with.

Once a桂customer agrees to桂subscribe, they�셪l be桂paying in桂advance 닥늡곶桂a桂product or桂service. For example, with a桂subscription box that is桂delivered once a桂month, the桂subscriber agrees to桂constantly pay a桂monthly fee with the桂promise that he桂or桂she will receive her subscription box on桂time.

A桂contract is桂made

Ideally, under the桂subscription model, both parties, the桂seller and桂subscriber, are entering an桂agreement that can be桂canceled if桂either of桂the桂parties fail to桂comply or桂if桂the桂subscriber wishes to桂cancel at桂any桂time.

When a桂customer agrees to桂subscribe and桂add their card information, they are stating they agree to桂be桂charged a桂monthly fee and桂consistently receive your product until they choose to桂cancel. Even if桂you haven�셳 heard from them in桂a桂while, they have agreed 닥늡곶桂you to桂continue charging them 닥늡곶桂your product or桂service until they go桂through a桂cancelation process.

This agreement helps them save time and桂money; they can now have these items delivered to桂their doors and桂helps them avoid a桂repeated checkout process.

This is桂a桂great way 닥늡곶桂them to桂save money since you can offer them a桂better deal than they would get by桂relying on桂the桂one-time purchase model. This is桂because, unlike a桂one-time product, under a桂subscription model, customers can customize their items, choosing only what is桂really necessary 닥늡곶桂them.

Also, recurring billing allows businesses to桂gain more revenue in桂the桂long run, which leads to桂lower prices 닥늡곶桂customers. Unlike traditional pricing, . This is桂the桂key to桂how both customers and桂sellers can benefit from this unique model.

What Kind of桂Businesses Use Recurring Billing?

There are no桂exceptions when it桂comes to桂possibilities 닥늡곶桂subscription 김껸꿎낼깎꾈넨끅�봞꾈꿎늡꾈깎 can add these to桂their store�셲 purchase options. Although not everyone can benefit from this unique way of桂selling. Like with any桂other marketing strategy out there, it桂can work perfectly 닥늡곶桂some while not so桂good 닥늡곶桂others.

Here are some of桂the桂most common businesses that use recurring billing, most of桂which you are probably a桂subscriber of:

Online service businesses

You�셪l notice that most online businesses that offer non-tangible products that can�셳 be桂purchased on桂a桂one-time basis nor delivered to桂the桂buyer�셲 home rely on桂subscription payments. These include streaming services like Hulu, music apps like Spotify, ecommerce sites, online magazines, etc.

Membership services

It桂is桂rare nowadays to桂find a桂gym that doesn�셳 require a桂monthly or桂yearly membership fee. This is桂because it桂is桂easier and桂more affordable to桂simply register customers�� information and桂charge them a桂monthly fee rather than charge them every time they go桂in桂닥늡곶桂a桂workout. This can become overwhelming and桂expensive, especially when many visit the桂gym daily.

Subscription boxes

You�셶e very likely heard about subscription boxes like meal prep or桂cleaning products, or桂any桂other kind of桂subscription box. These are becoming very popular as桂many prefer to桂get a桂monthly delivery of桂all their essential items that can be桂paid 닥늡곶桂periodically in桂one big purchase. Not only is桂this more affordable and桂convenient, but it桂also comes with a桂lot of桂excitement and桂fun as桂subscribers eagerly wait 닥늡곶桂the桂newest addition to桂their next delivery.

As桂you can see, the桂possibilities are endless when it桂comes to桂starting a桂subscription business. These are just some of桂the桂most common ones to桂give you an桂idea of桂what is桂achievable under this model.

Key Factors When Choosing a桂Pricing Model

As桂you already know, the桂subscription business model is桂not necessarily 닥늡곶桂everyone, and桂sometimes even if桂your product is桂the桂perfect fit, things can go桂wrong without the桂proper expertise and桂understanding (or at桂least, a桂platform with a桂robust customer support service that can help you along the桂way).

To桂succeed with the桂subscription business model and桂choose the桂best pricing model 닥늡곶桂your business, make sure to:

Set adequate pricing that covers your products base costs, advertisement, maintenance, etc.
Understand your customer�셲 needs. Do桂they prefer a桂one-time payment or桂a桂payment plan, where these are broken over a桂set period of桂time?
Understand your competition and桂what is桂working 닥늡곶桂them.
桂Make sure to桂rely on桂a桂dependable subscription payments system.
Choose the桂best key messages 닥늡곶桂your audience that emphasize the桂value of桂your products and桂what these have to桂offer.

Recognizing and桂applying these should set you on桂the桂right path to桂success. Just remember that it桂all takes practice. To桂learn more about subscription payments and桂how they work, check out our 15-minute read guide How to桂Sell Subscriptions.

How to桂Start On桂Subscription Payments?

Starting a桂subscription business doesn�셳 have to桂be桂difficult. Once you have evaluated your options and桂decided you are ready to桂make the桂switch, all you need is桂a桂reliable payment platform.

Not every recurring billing service is桂a桂perfect match; this is桂why it桂is桂important to桂do桂your research. At桂붚죕쳔, we桂strive to桂make each of桂our sellers�� recurring billing as桂easy and桂convenient as桂possible.

This is桂how you can easily set up桂recurring billing with 붚죕쳔:

. You�셪l be桂able to桂set up桂your ecommerce site with no桂experience necessary.
Add your products and桂subscription terms and桂conditions to桂your site. This includes cancellation and桂return policy.
넙늡桂넨늡桂넨농쓩끅 step-by-step guide 닥늡곶桂exact details on桂how to桂.

Get Started on桂Subscription Payments Today

There�셲 no桂need to桂make things complicated. Starting a桂subscription payments business is桂now easier than ever thanks to桂easy access to桂a桂wide range of桂resources available. If桂you still find yourself confused about how to桂start subscription payments, you can find more in-depth instructions in桂our . You can also reach out to桂our 닥늡곶桂one-on-one instructions.

We桂hope this guide helped you make the桂best decision 닥늡곶桂your business and桂offered you a桂clear and桂thorough explanation about the桂recurring payments business model. There is桂no桂time to桂lose; we桂encourage you to桂get started today and桂share your experience with us桂in桂the桂comments below!

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About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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