So whether you are drinking a coffee, reading a newspaper, or maybe enjoying your favorite web series
on Netflix, there is a very high chance that you'll be using a subscription product or service.
And that's why in this video we will understand about subscription business model.
Before we understand about subscription business model, let me ask you a very simple question.
How many subscription product or service do you use in a day?
You can answer this question in the discussion section, and I would love to know who is that person
who is using the maximum number of subscription product or service.
So let's understand about subscription business model.
Now, subscription is the idea of selling a product or a service to receive monthly or yearly recurring
revenue.
And to understand subscription business model, you have to understand this simple diagram.
Let's say there is a company who is selling a product or a service to these customer, and in return
of that specific product or service, these customer are doing a periodic payment to these companies.
Now, this periodic payment can be on a monthly basis or on a yearly basis.
I'll talk about a few companies who use subscription business model.
Well, companies like Shopify, Dollar Shave Club and Netflix use a subscription business model in Shopify.
You just need to pay $30 every single month and you can build your online e-commerce store with the
help of Shopify.
In Dollar Shave Club, they will ship the favorite razor every single month.
In Netflix, they allow you to watch your favorite web series or movie on demand on their platform.
And there are many companies that use this subscription business model.
If I'll give you a simple diagram to understand how different businesses and customer use subscription
business model, then you have your B2B business and b2c business, and then you have your subscription
service and subscription product.
So if a business is offering a service on a subscription basis, that's your service.
And if they are offering a product on subscription basis, that's the product.
And B2B is your business to business and B to C is your business to customer.
If you look at B to B service subscription, we have companies like Brex and we work now we work provide
co-working spaces to other businesses and that's a B to B service subscription just like that.
BREX is A they provide business credit card to other small startup and businesses.
Then you have B to C service subscription.
If you look at products like Prime Video or Instacart, that's ab2c subscription.
You can take a subscription of Instacart and they will deliver groceries at your doorstep every single
month or maybe every single week.
That's ab2c subscription.
If I give you an example of a B to B product subscription, then products like Shopify and Fresh Work
Shopify will allow you to build your e commerce store and fresh work is a great alternative to CRM or
chat bot.
Then we have b2c product subscription.
So things like Dollar Shave Club, BARKBOX So Total Ship Club will ship Razor every single month at
your doorstep and it's a subscription box.
Similarly, Barkbox will ship pet food every single month on your doorstep.
That's ab2c product subscription.
And just like this, there are many other companies like Warby Parker Meundies, who will ship a personalized
product every single month at your doorstep.
And that's a really good example of p2c product subscription.
So now that you understand B to B, B to C service and product kind of subscription, let's understand
the different types of subscription business model that is used by all these different companies.
So we have six different types of subscription business model.
The number one is umbrella subscription.
And this is used by companies like Amazon and Amazon Prime covers the umbrella of services like Amazon
Prime video, Prime Music, one day delivery, and a couple of more benefits.
Second is your subscription pass, and subscription pass will give you a special access to the platform.
Let's say if I talk about few subscription paths, you have Tinder gold on Tinder.
So if you take Tinder Gold subscription pass, they will recommend your profile to more goals and it
will increase the chances of you getting a date.
Apart from that, they will also get few other access of certain features like super like and few other
things.
Another subscription pass is Dashpass, so DoorDash, which is a food delivery platform in the United
State.
They have a Dashpass and if you take this dashpass, you will get free delivery.
You don't really have to pay the surcharge on the platform, and that's the advantage of taking a subscription
pass.
Basically, they will make you a light member on the platform.
Third type of subscription is subscription box.
So they will send a personalize box every single month.
If I give you a couple of examples of subscription box, you have products like Meundies Dollar Shave
Club and Barkbox and maybe a few others like Warby Parker.
So in Meundies they will send a personalized underwear every single month at your doorstep.
That's a really good example of subscription box.
Similarly, Dollar Shave Club will send you the razor of your choice, the shaving form of your choice
every single month on your doorstep.
And similarly, Barkbox will send the meal for your pet every single month.
That's your subscription box.
Then we have ecosystem subscription.
So if you look at platforms like Shopify and Fresh work, if you take the subscription of Shopify,
you will get access to their platform for one month.
So you can install any app you want.
You can build your own ecommerce store.
You can accept order.
You can do whatever you want on your eCommerce store.
If you have a Shopify subscription, similarly, you have fresh work.
If you take fresh work, one subscription you can access, you can build your own chatbot on your website,
you can create CRM, you can manage all the people in your team and they have multiple products.
In the end, we have newsletter and publication subscription.
So if you have heard of this product that is Morning Brew, if you take their subscription, they will
curate latest tech news, business news, marketing news in your inbox every single day.
And that's the advantage of taking all these different types of subscription from umbrella subscription
to newsletter subscription.
You have multiple types of subscription business model.
Now let's understand a little more about these different types of subscription business model.
The first one is subscription box.
Here, the company will send a personalized experience at your doorstep every single month.
If I give you a couple of examples, brand like Warby Parker, Meundies and Dollar Shave Club ship their
product every single month on your doorstep.
And that's the example of subscription box where we Parker will send you the contact lens every three
months.
Meundies will send two pair of underwear every single month and Dollar Shave Club will send our razor
blade of your choice every single month on your doorstep, and that's your subscription box.
The second one is your special subscription pass that gives you the advantage of standing out from the
crowd.
If I give you a couple of example, you have subscription paths like Dashpass and Tinder Gold, and
they'll give you a couple of X's.
So 20 Gold subscription will recommend your profile to more goals.
Third one is your Amazon umbrella subscription.
So if you take Amazon Prime, they have umbrella of services like Prime Video, Prime Music, Kindle
and couple of more things.
And in the end you have your ecosystem subscription that is used by Shopify and you have your publication
and newsletter subscription that is used by companies like Morning Brew.