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BizReport : Ecommerce archives : September 25, 2013

How to build a strong, subscription based business model

Is a subscription model right for your business? Our expert offers advice on creating and growing a subscription based business in the online world.

by Kristina Knight

Maria Haggerty, President, Dotcom Distribution: The key to a successful subscription model is an outstanding customer experience. The customer must receive their package on time each month in pristine condition, and the client's brand love must be delivered. Dotcom Distribution has an infrastructure in place to ensure that every order is shipped when promised and arrives in the condition expected. Each solution is customized and scalable.

Kristina: What do brands need to know about subscription based ecommerce prior to launching their website?

Maria: I would say the most critical component is inventory management. Understanding that orders must frequently be assembled prior to shipping and that most need to be delivered within a very specific time period requires sophisticated processes to manage the entire supply chain. It is crucial that all components arrive on time at the warehouse; credit card processing is managed effectively as credit cards expire/are cancelled; and the subscriber database is up-to-date. Additionally, companies looking to go the subscription route should have their product plan laid out well in advance.

Kristina: What is it that consumers are looking for in the subscription ecommerce?

Maria: Customers are looking for a quality product, convenience and the ability to try new items of which they may not be aware. In the Birchbox case, the customer is educated about new products and how to use them. In the case of PetFlow, the customer is looking for new ways to treat their beloved pets. With Adore Me, young women want to find new styles of lingerie without having to actually "shop" for it.

You can read part one of my chat with Maria and Dotcom Distribution, including how the subscription model is changing ecommerce here.

Image via Shutterstock

Tags: Dotcom Distribution, ecommerce trends, subscription commerce, subscription service trends

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