Subscription boxes have become a massive trend among consumers. Today, we can get about anything in a subscription box, from makeup and books to food and produce. As a farmer, selling subscriptions online can be a great way to make some extra profit and keep your customers coming back for more.
The e-commerce subscription model has grown by 100% per year in the last five years, according to McKinsey and Company. This trend has pushed multiple large corporations, including P&G, Sephora, and Walmart, to experiment with adding subscriptions to their products. A further study showed that 32% of consumers buy a subscription to save time and money, 55% to try something new, and 13% to gain exclusive access. If this is working so well for other industries, why not consider applying it to local food?
In this article, we'll explain the concept of subscription boxes and CSAs, with examples of the types of products you could sell online. Additionally, we will guide you through the steps to start your own food subscription service or CSA, and recommend the best subscription tools and apps, helping you capitalize on this growing trend.
A subscription box is a recurring delivery of niche products packaged for a particular interest. These boxes can contain anything from makeup and books to food and produce. For farmers and food producers, subscription boxes can include:
These specific examples show how farmers, food hubs, and farmers' markets can leverage the subscription box model to create a steady stream of income while providing customers with fresh, local products.
Selling food subscriptions online ensures a steady stream of income. Customers pay upfront or on a recurring basis, providing financial stability and helping you plan better for the future.
Subscriptions build a loyal customer base. Regular deliveries keep your customers engaged and satisfied, leading to higher retention rates and consistent sales.
With subscriptions, you can better predict demand and plan your production accordingly. This reduces waste and ensures you only grow and harvest what you need.
Online subscriptions allow you to build a direct relationship with your customers. You can gather feedback, understand their preferences, and continuously improve offerings to meet their needs.
Subscriptions provide numerous marketing opportunities. Use customer data to create personalized email marketing campaigns, offer special deals and online coupon codes to subscribers, cross-sell and upsell, and set up a referral program to grow your customer base.
CSAs (Community Supported Agriculture) are a great way to apply the subscription model. With a CSA, farmers are selling “shares” of their products for their customers for a season or other specified time frame. In exchange, customers receive seasonal (bi)weekly boxes of their products. CSAs are mostly popular amongst fruit and vegetable farms, but some farms are testing out protein or mixed food boxes as well!
A CSA model is a great way to ensure your income at the start of a season. With a subscription, consumers pay upfront for a service they receive for a certain period. This means less marketing work for the rest of the season. Many CSA farms even do a combination of sales, selling their CSA shares alongside produce weekly at the market. You can apply the subscription model to your business in any way that best suits you.
If either of these business models sound like something that could apply to you, here are the components of a subscription or CSA you’ll need to consider:
To ensure success, you need to be able to plan for the upcoming season. Ensuring that your harvest will meet the demands and clearly lay out your subscription agreement with your customers. As a box is based on a set price, however, what it contains varies, and you must state this clearly in the agreement.
Be sure to include risks (in case a crop fails), the length of the service, what’s usually included in the box, and how they can get their box. A customer should be able to read the agreement and be fully aware of what they are getting in their service. Always make sure your business is fully capable of operating smoothly before offering this to your customers.
When starting a subscription model, you need to have a customer base to make it worthwhile. Begin by creating a farm buyer persona or customer persona for your subscription service. This involves identifying the demographics, preferences, and purchasing behaviors of your ideal customers. Determine who you are targeting and how you are going to reach them. Consider marketing to parents at schools, to students at university and college, or to exercise enthusiasts at your local gym. Always have a clear-cut marketing plan that includes your target audience, your social media and outreach strategy, and your branding.
Be sure also to consider a referral program as a great marketing tool and source of new customers. Referrals can quickly boost your customer base and give perks to your current customers. Many great subscription businesses exploded with referrals, such as HelloFresh.
Different from selling your products individually online or at the market, a CSA or subscription model sets a fixed price for a fixed amount of products. Each box or package should have a predetermined quantity or mix of products. Pricing your subscription is a complicated task and should be researched well before setting. Look at what average families are willing to spend, what other CSAs are charging for their products, and use data from your own business if you sell currently. Additionally, determine how many shares/subscriptions you need to sell to receive your desired profits.
To get a detailed understanding of how to price your products effectively, you can refer to our related article, How to Price Your Products for Wholesale. This article provides in-depth guidance on calculating production costs, determining profit margins, and various pricing methods that can also be applied to your subscription pricing strategy.
Also, think about how you are going to offer your subscription. In a CSA model, a farm would sell shares at the beginning of a season or for a whole year. Customers pay a lump sum at once for a longer period. Other subscription models have a weekly or monthly fee for a single or a few boxes. Determine which of these payment plans would work best for your business and for your target audience.
Once you’ve laid the groundwork for your subscription business model, you’ll want to pick the best subscription management software to manage your subscription boxes and offerings.
Local Line offers comprehensive subscription box platform capabilities, including e-commerce for farmers, farm PoS software, payment processing, CRM (customer relationship management) tools, and an intuitive drag-and-drop website builder for your farm website. This ensures you can handle customer data, process payments securely, and manage your subscriptions efficiently. With Local Line, you can streamline your operations by integrating all these functions into one user-friendly platform, making it the best way to sell subscriptions online, including food subscription boxes, CSA online subscription services, and subscription meals.
Moreover, Local Line's platform is designed to scale with your business, offering advanced features such as automated billing, real-time inventory tracking, and detailed analytics. These tools provide valuable insights into your sales and customer preferences, helping you make informed decisions and tailor your offerings to meet market demands. Whether you are setting up a food subscription shop on the internet, selling produce online, or launching a farmers market subscription box, Local Line's flexibility allows you to customize your subscription plans to suit your customers' needs, whether it's weekly, bi-weekly, or monthly deliveries. By choosing Local Line, you're not just adopting a subscription platform; you're investing in a comprehensive solution that supports every aspect of selling food subscriptions online, ensuring your business's growth and success.
The most crucial aspect you cannot forget is to determine how you will get your products to your customers. Many CSAs operate by setting pick-up locations in common or public areas. A pick-up location allows you to reach multiple customers without delivering the boxes to various locations. Consider setting your pick-up sites in the same areas where you target your potential customers. This will often be a place where your current customers already frequent and will increase the potential for picking up new customers along the way.
Delivery can also be an option if it is feasible for your business. Offering delivery can be very attractive to your customers; however, it must be profitable. Selling food subscriptions can be a very profitable business! Many farms have found this to be a great way to ensure sales while pleasing their customer base. As your membership grows, it can get overwhelming to record customer data, track active members, and ensure smooth packing and distribution. Having an online real-time system like Local Line’s all-in-one online platform for farmers that keeps everything up-to-date and organized can save you hours on administration.
➡️ Boost your farm's recurring revenue and ensure a predictable cash flow: Download our free guide to selling food subscriptions line!
To better understand how a food subscription business can thrive, let's take a look at Pretty Road Co. Farm Store. Sandy and Ryan, the owners, decided to diversify their farm operations by launching an online farm store and, most recently, a subscription box program. Initially, they faced challenges with selling meat by weight and managing tax issues using a generic e-commerce platform. After switching to Local Line, they found a solution that allowed them to sell by weight, manage taxes effectively, and streamline their operations.
Pretty Road Co. launched The Farm Food Monthly Subscription Boxes, offering various price ranges and including products such as baked goods, eggs, produce, and farm-raised meats. The subscription program has been a hit, ensuring recurring revenue for the farm. Local Line's e-commerce subscription management feature has played a crucial role in their success, providing an easy sign-up process for customers and allowing flexibility in managing subscriptions.
For more detailed insights into how Pretty Road Co. built their profitable farm subscription program, you can read the full article on How to Build a Profitable Farm Subscription Program.
Selling food subscriptions online is a powerful way for farmers to increase profits and drive repeat sales. Using e-commerce farm subscription software makes starting a food subscription service easier.
Local Line's subscription box software, designed specifically for farmers, food hubs, and food co-ops, revolutionizes e-commerce for farmers by transforming one-time sales into reliable, recurring revenue. It provides customers with a convenient and flexible way to access your products. With features like custom subscription plans, support for weighted items, and integration with our farm website builder, Local Line offers a comprehensive solution for managing and growing your food subscription business.
To sell a subscription plan, start by identifying your target audience and understanding their needs. Create a compelling value proposition that highlights the benefits of your subscription plan. Use an e-commerce platform like Local Line, which supports subscription services, including payment processing and CRM. Market your subscription plan through social media, email marketing, and referral programs to attract and retain customers. Providing excellent customer service and ensuring timely deliveries will help build trust and loyalty among your subscribers.
Setting up a subscription business involves thorough research and planning to identify your niche and understand market demand and competition. Source the products you want to include in your subscription boxes and establish reliable suppliers. Develop a pricing strategy based on your production costs, desired profit margins, and competitor prices. Use a subscription management platform like Local Line to handle your e-commerce needs. Create a marketing strategy to promote your subscription service and attract customers. Finally, set up an efficient fulfillment process to ensure timely and accurate deliveries.
The cost to start a subscription box business can vary widely. Initial inventory costs for product sourcing can range from a few hundred to several thousand dollars. Subscription to an e-commerce platform like Local Line typically ranges from $50 to $500 per month. Initial marketing expenses for social media ads, email campaigns, and other promotional activities can start from $500 and go upwards. Additionally, fulfillment and shipping costs for packaging materials and delivery can add a few hundred dollars to your initial expenses.
A subscription box business is a recurring delivery service where customers receive a curated selection of products regularly, such as weekly, monthly, or quarterly. This business model is built around providing niche products that cater to specific interests, such as food, beauty, fitness, or books. Customers subscribe to these boxes, often paying upfront for a set period or on a recurring basis, ensuring a steady revenue stream for the business.
The profitability of subscription boxes depends on effective cost management, customer acquisition, and retention strategies. Businesses need to keep production, sourcing, and fulfillment costs low while maintaining high product quality. Successful marketing strategies are crucial to attracting new customers and retaining existing ones. Many subscription box businesses can achieve profitability within the first year, with profit margins typically ranging from 20% to 50%, depending on the niche and operational efficiency. Offering unique, high-quality products that meet the needs and preferences of your target audience can significantly enhance profitability.
