Ecommerce Strategy: How You Can Add Recurring Income To Your Ecommerce Business
Hey, guys! Tanner here, and I want to talk to you about creating recurring revenue for your ecom business via building a continuity program.
Whenever I talk about this in a presentation or training, everybody’s always like, “Oh, my ecommerce business is different. We’re in x-niche/sell x-product and recurring revenue doesn’t work for us.” But the reality is that your business is not unique—none are in that regard. All businesses can benefit from and leverage recurring revenue, especially ecommerce businesses.
While certain niches may lend themselves to it more than others, it can be built in on some level regardless of your niche or what products you sell. So, I want to give you a couple different ideas and some food for thought to help you generate your own continuity program.
Buyer’s Loyalty Program
A buyer’s loyalty program is the easiest way to create recurring revenue for your business. You could very easily add something where people sign up and pay a low-ticket monthly bill to get a bunch of perks and store discounts. Amazon Prime is a perfect example of this.
There are also all kinds of buyers clubs out there where people pay a monthly subscription fee just to get discounts on products. If you have a brand with a lot of different products, you could charge people to get flat-rate discounts, free shipping on all their purchases, things like that. And there are tons of ways you could build a buyers club or loyalty program and add in extra incentives to make the perceived value of the program even higher.
The other easy option is to build recurring revenue through product subscriptions. If you have a product that’s consumable (i.e., something that runs out and is needed on a regular basis), the easiest thing to do is offer people a discount for getting on a residual billing plan. So, they pay you on a repeated basis and you automatically ship their product to them on a schedule (monthly, quarterly, whatever the plan is). Supplement companies have done this for years. It works great, and can work great for lots of other types of products too.
This is another method you can see being used on Amazon. They sell things like paper towels, toilet paper, diapers, makeup, all kinds of things that people use up and continually need more of. My wife buys her makeup via a continuity program. She makes monthly payments, and they automatically send her refills each month.
You can also do subscription boxes, like Birchbox, BarkBox, Stitch Fix, etc., where you send customers a collection of products every single month. Whatever your market is, you can build some type of subscription box. 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 well in general.
You can also go for more traditional types of recurring income, like newsletter or magazine subscriptions, a digital membership, or you could even start an association.
There are so many different ways you can leverage continuity, and it doesn’t always have to be high-ticket or expensive. Micro continuity, especially under $10 (my favorite in that price range is $4.95), works exceptionally well and you don’t have to provide a huge value for the five bucks a month people are paying.
Additionally, you can go up as high as you want—$50, $60, $70, $100 a month. What you charge will vary based on what you’re offering. The sweet spot for our ecommerce stores is between $29 and $39 a month, depending on what we’re promising our customers. We do have some on the higher end, but $29 seems to be the magic price point for us.
Once you get one continuity program running in your business, there’s no reason not to start another one! You could have things like different membership levels for different levels of perks, or a micro continuity association and subscription box. Or, you can mix and match to create your own hybrid model. The sky’s the limit!
Alright, guys … I hope all of that helps to get your gears turning about ways to add and leverage one or more continuity programs in your own ecom business. And remember this: It doesn’t matter what you sell or what niche you’re in … Continuity is a viable way to create a recurring revenue stream for any business.
So, start brainstorming and implementing! And let us know what you come up with. We’d love to hear the creative ways you add continuity to your ecom store. Check you later!