Strategies for Introducing Recurring Income to Your E-Commerce Business

Gabriel Gutierrez May 13, 2016

Reading Time: 3 minutes

Video Highlights

  • 0:24 Your Business Is not That Unique
  • 0:43 Ideas on How to Build Recurring Revenue in your business
  • 0:55 Buyers Loyalty Programs
  • 1:42 Product Subriptions
  • 2:34 Subscription Boxes
  • 2:59 Tradition types of Recurring Income
  • 3:10 Micro Continuity
  • 3:54 Multiple Continuity Programs

Hey guys, Tanner here. I want to talk to you a little bit about building in continuity for your business, how you can have recurring revenue in an ecommerce business.

Whenever I talk about this on stage or I do a presentation or a training everybody’s always like, “Oh, my ecommerce business is different. We’re in this niche and recurring revenue doesn’t work for us,” or “we sell blank and recurring revenue doesn’t work for us.
Well, the reality is that your business is not that unique. No business is unique in that regard. All businesses can benefit from and leverage recurring revenue, specifically in ecommerce businesses.

Now, while some may lend themselves to it more, certain niches and things like that, at some level it can all be built in. I want to talk about a couple different ideas of how you could add recurring revenue.

Give you some ideas, just food for thought to help you kind of generate your own ideas and how you can build it into your own business.

The easiest one would be some kind of a buyer’s loyalty program. You could very easily add something where you have a low-ticket monthly bill where it’s like, “Hey, sign up for our program and you’re going to get all these perks plus discounts on our store,” things like that.

The most common loyalty program we know about is Amazon Prime, right. There are also all kinds of buyers clubs out there where people pay monthly subscriptions just to get discounts on products.  If you have a brand with a lot of different products you could actually charge people to get flat-rate discounts, or free shipping on all their purchases, or things like that.

There are all kinds of ways you could build in a buyer’s club and loyalty programs and add in extra incentives to make the perceived value of the program even higher. That’s an easy one.

The other easy is product subscriptions. If you have a product that consumable in nature or something that they’re going to need on a regular basis then the easiest thing to do is offer them a discount if they want to get on a monthly billing, or quarterly billing, or some kind of residual billing plan where they pay you on a repeated basis and you automatically ship the product to them.

Supplement guys have done this for years. It works great, but it also works with other things. You can see it on Amazon, too. Amazon they’re selling paper towels, toilet paper, diapers, and all kinds of things, face makeup.

My wife buys makeup from a company on a continuity program where she pays monthly for them to send her refill packs for her makeup. I don’t know what kind of makeup it is, if it’s foundation or it’s something that she puts on with a brush, whatever. Right. She pays monthly for that and they just automatically ship her refill packs.

Another one you can do is a subscription box, kind of like Birchbox, or BarkBox, or Five Four for the clothing, or Stitch Fix, where you actually send them a collection of products every single month.  You can do this for any market. You can build out a subscription box-type thing for you. It works better in niche markets because you can get more related products and there’s more of a passion play there, but it works very, very well.

You can also do the traditional types of recurring income where you’re giving them a newsletter, or a magazine, or a digital membership, or you could start an association.

There are all kinds of different ways that you can leverage continuity. It doesn’t have to be all high ticket, or more expensive. Micro Continuity, sub $10. My favorite in that price range is $4.95. Those work exceptionally well, and there’s not a whole lot of value you have to provide for that 5 bucks a month that they’re paying.

Additionally, you can go up as high as you want, 50, 60, 70, 100 bucks a month depending upon the value that you do. Our sweet spot for our ecommerce stores is between $29 and $39 a month depending upon what we’re promising them, with most of our stores being in the $29 range. We do have some at the higher end, but $29 seems to be kind of the magic price point for us.

The other thing is, once you get one continuity program kicking in your business there’s no reason not to start another one. You could have different levels of membership for different levels of perks.

You could have a micro-continuity association and a subscription box. You could build all these things together, and you could intermix some of these different levels of types of continuity into creating your own hybrid model.

Anyway, guys, I’m about to pull into the office. These are just a few quick ideas on how you can get recurring revenue going in your business. I think if you spend some time thinking on it you can figure out some good ideas. Check you later.


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Gabriel Gutierrez

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