What are examples of successful ecommerce + subscription businesses?
Dollar Shave Club is one of the most popular examples of a successful ecommerce subscription business. There are also companies such as Birchbox, Pet Circle, and Manpacks, as well as, Amazon’s “Subscribe and Save” business.
What is the average churn rate for an ecommerce subscription business?
Recurly studied 900 ecommerce subscription businesses and found that the average churn rate was 7.02% and ranged between 3% and 12%. As you complete your financial projections with our spreadsheet template, you will find what a huge impact churn rate has on your profitability as an ecommerce subscription business. Since you are likely paying to acquire customers, each time you lose a customer (churn), you have to pay to acquire a new customer to replace them.
How to determine what shipping should cost for my ecommerce business?
Shipping costs can make or break your ecommerce business. It can be difficult to estimate what the cost might be to ship your ecommerce items because the location, dimensions, and weight can all play a role in determining the shipping cost. Additionally, as you grow your shipping volume you can negotiate better shipping rates with carriers such as UPS or FedEx. Shopify and other ecommerce platforms provide useful calculators to help you predict the cost of shipping your specific items.
Is an ecommerce business a good business to start?
We studied revenue data from 234 tech startups and we found that ecommerce businesses and DTC Product businesses were the fasted to reach $1,000,000 in revenue; however, growth really slows for DTC companies in year 5 and beyond when compared to B2B SaaS, B2C Software and Marketplace businesses. So although an ecommerce business can be a good business to startup, you will likely have less upside when compared to other software based tech startups.