How to Determine Your Subscription Box Budget and Why It’s So Important

Are you looking to start a subscription box?

A box budget is one of the very most important things that you need to focus on to grow a successful subscription box business.

Box businesses fail because they don’t know how to set up their budget. The budget is one of the foundations. Understanding how the money in your business allows you to plan ahead. You don’t want to raise your pricing and then find out you can’t deliver something desirable due to overspending or lower your pricing and build a non-profitable business. By estimating prices, you can get a solid idea of how much you need to make to be successful.

See below for a guide on how to plan your subscription box budget.

Watch the video below:

1. Learning Process

Your budget is a learning process. The budget that you have set when you first start your subscription box business may change due to several factors such as inflation.

Changes in pricing can also happen when you are already an established business. You have to match and understand the best market fit for you and your customers. Raise your pricing and tweak your prices so that your budget can better work for your business.

2. Spreadsheet

A good way to set and keep track of your budget for subscription boxes is to use a spreadsheet. This way, you can input your monthly income and expenses, as well as keep a running total of how much you’re spending on your subscription boxes. This will help you not only set a realistic budget but also to stick to it.

Consider every single expense of your business such as:

• Subscription costs: You’ll need to factor in the cost of the products you’ll be including in your subscription box. This includes the cost of shipping and handling or fulfillment center costs, as well as any packaging costs.
• Marketing or advertising costs: You’ll need to set aside money for marketing and advertising your subscription box business. This includes the cost of creating and maintaining a website, as well as the cost of promoting your business on social media.
• Processing fees: You’ll use third-party companies to run your business such as Stripe for payments and Subbly for subscriptions. These have monthly fees that they are charging you to run your business on their platform.

3. Pricing Model

It’s important to take a close look at your subscription box budget and make sure that it is in line with your overall business goals. After all, the prices you charge for your boxes will have a direct impact on your success.

A great strategy is to look at other boxes in your industry to see what they’re charging and what customers are happy to pay for the same products. Another factor to consider when setting your pricing is whether shipping charges for the box are included or not. Cratejoy has an amazing box budget calculator to start budgeting and get starting costs.

It is important to set a budget and be mindful of what you are spending to ensure you are getting the most out of your subscription box budget. By understanding your spending triggers and using a budget, you can avoid overspending on your subscription box business. If you are struggling to stick to a budget, consider speaking with a mentor or a coach.

Ready to start your subscription box business and sign up subscribers by the 100’s? Sign up for Sub Box Kickstarter Workshop here to learn how to start your subscription box business in 10 steps!