A subscription box business plan sets out what goes in the box and who it's for, what a box costs to fill and ship and what it sells for, how many subscribers you'll keep, and the first year month by month. Two numbers decide it. The first is the cost of a box delivered: the contents are often less than half of it, after the box itself, the shipping and the packing. The second is churn, the share of subscribers who cancel each month: every one has to be replaced before the list can grow, and replacing them costs marketing. In the example below, a box of snacks from local makers in Denver sells monthly subscriptions, three-month gifts, one-time boxes and add-ons, makes a profit from month 4, and ends the year about $16,600 ahead on $93,700 of sales, after paying $20 an hour for the packing. Below is a description example, each part of the plan, churn, the projection, the startup budget, and a free template.
The short version
- Describe the business in a paragraph: the box, the subscriber, the makers, the goals.
- Cost a box delivered: contents, box and inserts, shipping, packing time, payment fees.
- Price shipping in, or charge it plainly; it's a fifth of the price either way.
- Sell gifts and one-time boxes alongside the subscription; they bring new subscribers.
- Plan for churn: at 10% a month, 200 subscribers need 20 new ones every month just to stay at 200.
- Buy contents to the subscriber count, not the hoped-for one; leftover items are cash on a shelf.
- TaroStack keeps box contents counted and builds each month's box as a kit. More below.
Part 1: the business description
Front Range Snack Box, a made-up subscription box in Denver, Colorado, I use in these examples, writes:
Front Range Snack Box sends a monthly box of six snacks from small Colorado makers, with a card telling each maker's story, by subscription, as three-month gifts and as one-time boxes, with add-ons from past boxes. In our first year we plan to reach 200 subscribers.
Part 2: what a box costs
| Per unit | Monthly box | Three-month gift | One-time box | Add-on item |
|---|---|---|---|---|
| Contents: six items at wholesale | $14.00 | $42.00 | $14.00 | $6.00 |
| Box, tissue and story card | $2.20 | $6.60 | $2.20 | |
| Shipping | $9.50 | $28.50 | $9.50 | |
| Packing, 6 minutes a box at $20 an hour | $2.00 | $6.00 | $2.00 | |
| Payment fees, 3.5% | $1.58 | $4.52 | $1.82 | $0.42 |
| Variable cost | $29.28 | $87.62 | $29.52 | $6.42 |
The six snacks are $14 of a $29.28 box; shipping alone is $9.50. That's the arithmetic a shipped box lives with, and why the box is designed to ship in the cheapest size and weight that fits. How to cost the box, tissue and card properly is in packaging cost per unit.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Monthly box, subscription, shipped | $45.00 | $29.28 | $15.72 | 34.9% | 200 |
| Three-month gift, prepaid, shipped | $129.00 | $87.62 | $41.38 | 32.1% | 15 |
| One-time box, shipped | $52.00 | $29.52 | $22.48 | 43.2% | 40 |
| Add-on item | $12.00 | $6.42 | $5.58 | 46.5% | 60 |
A subscriber leaves $15.72 a month. The one-time box costs $7 more and leaves more, which nudges a buyer toward subscribing. A three-month gift is cash now for three boxes owed later, so the items for those boxes are set aside when it's sold. How a gift box is put together from separate items is in kitting for gift boxes.
Part 4: churn
If 10% of subscribers cancel each month, 200 subscribers lose 20 a month, and 20 new ones have to come in just to stay at 200. Reaching 200 in the first year means signing up about 300 people over the year, because some leave along the way. If each new subscriber costs about $30 in ads, samples and referral credits, holding 200 costs about $600 every month and growing costs more, which is why marketing is the plan's biggest fixed cost at $1,000. A subscriber who stays six months leaves about $94 before marketing; one who stays two leaves $31, barely what it cost to win them. So the plan spends on keeping subscribers too: a good first box, a skip-a-month option, and a box that's different every month.
Part 5: the first year, month by month
Fixed costs are $1,455 a month: marketing, ads, samples and referral credits ($1,000), subscription software and the website ($80), packing space ($200), insurance ($40), software and card fees ($35), and photos and content ($100). Subscribers start at 15% of the target and reach it by month 11:
| Month | Subscriber boxes | Three-month gifts | One-time boxes | Add-ons | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 30 | 2 | 6 | 9 | $2,028 | −$716 | −$716 |
| 2 | 40 | 3 | 8 | 12 | $2,747 | −$455 | −$1,171 |
| 3 | 50 | 4 | 10 | 15 | $3,466 | −$195 | −$1,366 |
| 4 | 60 | 5 | 12 | 18 | $4,185 | $65 | −$1,300 |
| 5 | 80 | 6 | 16 | 24 | $5,494 | $544 | −$756 |
| 6 | 100 | 8 | 20 | 30 | $6,932 | $1,065 | $309 |
| 7 | 120 | 9 | 24 | 36 | $8,241 | $1,544 | $1,853 |
| 8 | 140 | 11 | 28 | 42 | $9,679 | $2,065 | $3,918 |
| 9 | 160 | 12 | 32 | 48 | $10,988 | $2,544 | $6,462 |
| 10 | 180 | 14 | 36 | 54 | $12,426 | $3,065 | $9,527 |
| 11 | 200 | 15 | 40 | 60 | $13,735 | $3,544 | $13,070 |
| 12 | 200 | 15 | 40 | 60 | $13,735 | $3,544 | $16,614 |
The year's sales are $93,656 and the profit $16,614, on top of $20 an hour for the packing. Contents are bought to the subscriber count each month; how much to keep on hand is in how much inventory to keep on hand.
Part 6: the startup budget
| Item | Example |
|---|---|
| First box contents, 100 boxes | $2,000 |
| Printed boxes, tissue and inserts | $1,200 |
| Brand and box design | $800 |
| Website and subscription setup | $500 |
| Product photos | $300 |
| Shipping scale and label printer | $250 |
| Working cash | $3,000 |
| Total to start | $8,050 |
Get the template
Download the subscription box business plan workbook. Four sheets: your boxes with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Six items a month from a dozen makers, each bought by the case with its own best-by date, 200 boxes to pack in a weekend, three-month gifts with boxes still owed, and add-ons from past months. A sheet can't say whether there's enough of each item for this month's 215 boxes, which items are getting close to their date, or what's left over to sell as add-ons.
How TaroStack does it
TaroStack keeps box contents counted and builds each month's box as a kit.
Contents in stock, by lot and date. Each item is received by the case with its lot and best-by date, counted on a phone, and kept at what you paid; the oldest go out first, and items close to their date show in your alerts.
The box as a recipe. Each month's box is a recipe of its six items, the box, tissue and card, so packing the month's boxes takes everything off stock at what you paid and gives the cost of a box. TaroStack's planning shows what to buy for the boxes owed, as drafts you approve.
And what each box earns. Margins are reported by product and by customer, so the subscription, the gifts and the add-ons can be compared.
| The job | Notebook | In TaroStack |
|---|---|---|
| Enough of each item for 215 boxes? | Count the cases | Stock by item, against the box recipe |
| Items close to their best-by date | Read the labels | Alerts by date |
| What to order from each maker | Guess | Planning: what to buy, when |
| Subscriptions or gifts, which pays? | A feeling | Margins by product |
Recipes, batches, lots and margins by product and customer are on every plan, from $49 a month, and planning is on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.