Dog stuff. Snacks. Makeup. Gaming gear. Apartments. Cars.
Everything has become a subscription box. It seems like the trend may have passed but companies like Dollar Shave Club are getting acquired by huge brands who either see subscriptions as an opportunity or threat to their business.
Subscriptions can be useful for things we need every so often. For a while, I was getting contact solution sent by Target every few months. It was useful, because I always would forget to buy new solution and can only use the one at Target. So when I ran out, I’d be stuck having to go to Target just for one thing. I stopped getting the subscription though because I realized I only needed a new pack 2-3 times a year.
Other than that Target subscription, I’ve never subscribed to other products. I can see the benefits though, which I’ll get into now.
Why do companies love subscriptions?
What company doesn’t want to have recurring customers? That’s the dream business model. It’s a reason why SaaS businesses are booming. It’s why Adobe moved from selling physical copies of their software to making it a monthly subscription.
Rather than having a one-time sale, you’re generating monthly recurring revenue. That means fewer ups and downs that occur when selling one-off items.
Benefits of subscriptions
For customers, the benefits of these boxes include savings and less thought needed to be spent on getting those particular items. If you sign up for 12 orders upfront, you get a slight discount over buying 12 separate orders. This is more for subscriptions of particular products like a monthly product order.
For subscription boxes, you benefit from the mass savings the companies get buy purchasing in bulk. You also get to discover new items. Birchbox is popular because you get samples of many items you likely would not have tried before. Same for snack boxes.
For software, subscriptions mean that you can continue to get support and can expect updates to the program. Instead of paying $300 upfront for software that you might only need for 6 months, you’re now only paying $20 a month for that 6 months.
Downside of subscriptions
The point of this article isn’t to convince you to get a subscription though. I believe there are big downsides to so many subscriptions. Everything is a subscription now.
Companies like Amazon, Walmart and Target are pushing for customers to subscribe to items. They don’t want you to succumb to the lapses in judgment that we all have when it comes to needing to re-order something. We forget! Getting us to subscribe to toilet paper and tissues means more revenue for these retailers.
The downside is that we often end up with too much of an item, like I did with the contact lens solution. I now have 3 huge bottles of the stuff, so I cancelled my subscription. If you have subscriptions for too many items, you might forget to cancel for a while. You get the new shipment of toilet paper and realized you already have a closet-full, but then you forget to log into your account to stop the next order.
Subscription boxes also lead to waste. If you get a box full of snacks and only eat 4 of the 7 items, it doesn’t seem like you got your money’s worth. Really, you just got someone to pick a few random items for you to try so you wouldn’t have to make that decision.
Rent is a subscription. We’re paying monthly to have access to a living space. Some of use even pay for furnished spaces, meaning we’re subscribing to furniture. Luckily, renting is not the only option and we can purchase homes or condos once we’re ready.
With something like software, there often isn’t the option to buy it outright. If I wanted to get Adobe Illustrator, I can’t just pay $500 and get the software. I have to pay $30 a month to access the program.
Subscriptions play on our psychology. With Adobe Illustrator, only the hardcore creatives were shelling out to buy the software back when you could buy or download it. Now, $30 a month to access these programs seems like a bargain. But if you use the program for a year or forget to cancel, that means $360 for the year!
Subscriptions also mean more financial responsibilities each month. A $30 subscription to Adobe, $15 to Netflix, $10 to Hulu, $13 to Birchbox. That’s already $68 a month. $10 to Hulu doesn’t sound like much on it’s own, but combined with all your other bills it can add up.
Whenever possible, I want to own the item. I don’t want to have to pay to access it each month. I wanted to get a washer/dryer combo for our apartment. I saw you can rent them for $50 a month. Hey, that’s not so bad. But $600 a year!? I could buy those for that price (or a little more) and get more than a year’s use out of them. We never did get a washer or dryer and instead use a portable washer/dryer combo ($114) and hang the clothes to dry.
What to do
Offering subscriptions is going to continue to be a thing for companies, I don’t see it going away. But think about all the subscriptions you have before you sign up for a new one. Do you really need to subscribe to toilet paper? How often are you buying it?
Try to track the date you bought it and the date it runs out. Do this a few times and you can get an idea of how often you really need to have it sent to your home.
Calculate the value of subscription boxes you’re getting. Are you using everything in the Barkbox or just 1-2 items?
If you’re using a software often and plan to use it for a long time, is there the option to buy it outright? Calculate the cost and savings.
Subscriptions can often make us feel like we’re not paying that much. But they play on psychological principles. We forget to cancel them. Create alerts in your phone to remind you to cancel subscriptions. We don’t calculate out the total yearly cost. When you see a monthly cost, multiply it by 12 and see if you’re still comfortable with that number.
List out the subscriptions you have. Check your credit card statements. Which ones did you forget about? Is it time to cancel?
Don’t let your life be a ruled by a thousand subscriptions.