Subscription commerce helps small businesses

Small companies are constantly struggling to compete in their industries with larger firms that have more resources. However, hope for small businesses may lie in the subscription commerce market, as these companies can entice customers through “box of the month” services that allow consumers to test out products before making full-fledged investments.

This is exactly what Brooklyn-based Early Bird Foods founder Nekisia Davis did. By partnering with monthly subscription service provider Foodzie in March, Early Bird Foods was able to distribute its olive oil-tinged granola to a wider audience and has since seen a 30 percent increase in sales, according to a report by Crain’s New York Business.

“It’s about exposing 2,800 people to Early Bird who haven’t heard of us before,” Davis said, according to the news provider. “I only know this through many, many people telling me they received the box. Foodzie markets to people who buy specialty food already – they’ll buy a $9 bag of granola and not blink – and that’s the customer base I’m looking for.”

Subscription services can give small companies an edge

Subscription commerce is on the rise and as it proliferates, the potential for small businesses to gain a competitive advantage over larger firms that only market to a specific demographic is growing. By leveraging a subscription model, small firms can market their products or services to a wide range of prospective customers looking to test out new brands, Crain’s New York Business reported.

“Target marketing can be a challenging and expensive thing to do, particularly if you [operate] in a small niche,” Chicago-based daily deals aggregator Local Offer Network CEO Dan Hesse said, according to Crain’s New York Business. “Merchants now have a more effective way than ever to put their products in front of people likely to be interested in them.”

The food industry, in particular, is a very traditional market in which customers are loyal to certain brands. Breaking out of this trend can be difficult. But by creating a monthly service and leveraging a subscription management and billing platform, small firms may be able to break out of their niche and appeal to more customers.

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Editorial Team

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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