Today, there are a plethora of business ideas you can dig your toes into. One of the newer ideas on the block as of late is custom subscription boxes. Bakeries are famous for being go-to shops for tasty and delicious treats, but what if you could offer those same treats to customers on a wider scale?
While bakeries offer staple items like cookies, cupcakes, and other famous pastries, bakeries now take advantage of various food trends. With bakery subscription boxes, customers have the ability to indulge in their favorite treats from their favorite bakery on a rolling basis.
Not to mention, there are plenty of other benefits like eCommerce shipping solutions that allow you to ship across the U.S! We've written about monthly coffee subscription boxes and how to sell a meat subscription box. Now, it's time for us to tackle starting a bakery subscription box.
What Is a Baking Subscription Box?
A bakery subscription box is a subscription commerce service that sends customers their favorite baked goods on a recurring basis. Many subscription boxes are delivered directly to customers’ front doors, such as the best coffee subscription boxes.
One famous trend of bakeries and other subscription services is to sell to a niche market. Think a bakery that only sells cupcakes, breakfast pastries, or cakes alone. Doing so allows you to become recognizable to a specific audience instead of trying to spread yourself thin by providing multiple services.
Common Types of Baking Subscription Boxes
Before you start your bakery subscription business, it's good to know what kinds of subscription services already exist in the market. This way, you know your unique selling proposition (USP) before you start and have a well-defined eCommerce business plan.
There is a sizeable demand for bakery foods. The global bakery market size today is $203.8 billion and is projected to expand at a rate of 3.2% from 2019 to 2025. Moreover, with eCommerce being the number one way customers prefer to shop now, it's not a bad idea to start an online subscription service. While a brick and mortar bakery gets you local customers, an eCommerce bakery can reach customers in other states, and sometimes other countries.
Some high demand products to sell at a bakery include cakes, followed by bread and cookies. More specifically, customers are big fans of cake slices, smaller-scale celebration cakes, seasonal cakes (Christmas, Valentine's Day, etc), cake pops, and specialty cake fillings.
Now that you know the most popular kinds of baked goods to sell, let's discuss some subscription box options. Here are three of the most common kinds:
- Pre-Baked Subscription Boxes: In a pre-baked subscription box you're selling already-made baked goods to your customers. There is no additional baking required or toppings that need to be added. The best baked goods to serve for a pre-baked subscription box include cookies, bread, and cake pops.
- Unbaked Subscription Boxes: With an unbaked subscription box, you include all of the ingredients customers need to put their pastry together. This can include but is not limited to pre-measured flour, icing, spices, and decorative items. You'll also find a recipe card that customers can follow. Sometimes bakeries offer a hybrid option and sell already baked cupcakes or cakes, but supply the icing for customers to apply themselves.
- Themed Bakery Subscription Boxes: These boxes are tailored to holidays and special events. In the box, customers find everything they need to build their holiday-themed treat. From Valentine's Day to birthdays and every holiday in between, this box option is great for the festive baker and shopper.
- Specialty Baking Box: Specialty baking boxes target specific baked goods like bread, cake, and cupcakes. Oftentimes, these boxes come with easy-to-follow instructional eCommerce videos and online classes. Moreover, you might also find lesson plans with these boxes for those who are interested in becoming an avid baker. For example, the first subscription box will start with the basics. Then customers are able to keep learning more advanced recipes and techniques as they order.
How Does a Baking Subscription Box Work?
We've covered what a bakery subscription box is in detail and what it might include, but how does it work? The answer is surprisingly simple.
Here's how:
- Customers visit your website.
- Through your landing page, they'll sign up for one or more of your services.
- They'll follow the steps including what types of subscription box they want and other parameters you've put in place. A great option to offer here is a bakery box quiz. This quiz can feature a series of questions made to match customers to a subscription box that is best fit for them alone. Plus, they're lots of fun!
- Customers will now pick how often they want their boxes to arrive. Include intervals like monthly, weekly, bi-weekly, and bi-monthly.
- Your site will process and set up their recurring payment (see subscription billing).
- Their bakery box is delivered based on their selected options.
Why Sell a Baking Subscription Box?
As with any business idea, there has to be a driving force pushing you forward, which is the“why” of your business. Starting a bakery subscription service has proven to be an extremely lucrative business model.
Here are some recent statistics related to starting a bakery subscription box:
- The bakery subscription box market has reached a value of 18 billion in 2021 and is expected to keep growing exponentially. Specifically at a rate of 20% between 2021-2026.
- Subscription boxes are one of the most profitable business models. Most subscription boxes see a profit margin between 40% to 60%.
- Subscription boxes usually make more money than regular bakeries and amount to much less waste. This is because every box has specific portions and due to that, there is less product waste. Moreover, leftover portions can be used in other aspects of the bakery.
- As long as your items are marked with a proper sell-by date, you can resell subscription box materials. However, you'll want to make sure that you're strongly adhering to food safety guidelines when it comes to reusing and reselling baked goods.
As you can see, starting a bakery subscription business is extremely profitable. Baked goods are a staple item in everyday consumers' lives.
There's no coffee without a croissant and no birthday party without cake! There will always be a need for baked goods. Once you find your niche you're on your way to making a profit.
Starting a bakery subscription box also opens you up to receiving:
- Recurring Revenue: Subscription boxes are one of the best ways to lock down recurring revenue. It's easy to forecast how much you're going to make monthly and annually.
- Easy Marketing Opportunities: As opposed to a standalone bakery, anytime you offer online services you open yourself up to the vast world of marketing. Here you can take advantage of proven eCommerce SEO strategies like eCommerce keyword research and SEO terms.
- Product Discoverability: Subscription boxes are an easy way to make your entire catalog appealing to shoppers. When you offer multiple different boxes with different ingredients and options, customers will want to branch out and try something new. There's always that handful of customers that want to try everything on the menu!
- Minimal Costs: The good thing about a subscription service is that there are normally minimal costs. Most online bakeries are cottage bakeries, which means they operate in-home. So beyond your eCommerce business license, the most you'll need to invest in is a reputable online marketplace and initial eCommerce packaging and shipping. However, these costs are far less significant than having to buy a storefront and every other cost that comes with opening a physical business. Learn how to print shipping labels so that they're less costly for you.
Baking Subscription Box Setup: Tools You Need to Get Started
Starting a bakery subscription box doesn’t have to be difficult, and according to the numbers we've pulled, there's increasing demand for what this business model has to offer. Even so, there are a few decisions you'll need to make before you can get started.
Such resources and tools include:
- You need to determine what type of bakery subscription box you want to sell. Reference the types of boxes above for more details. Once you've figured this out you can move on to the next step.
- Packaging materials. For any subscription box, you'll need a lot of materials. More than this, customers expect these boxes to look pretty upon arrival, which is commonplace for unboxing material. You'll gain a lot of customers simply by people sharing pictures and videos of your box on social media, so make sure it's presentable. Knowingly, now isn't the time to cheap out on the packaging. Spend a little more to provide quality packaging that includes your business name and some fun details. It's not a bad idea to invest in business cards that you can place inside each box when it ships out.
- Finally, you'll want to choose a clean, all-inclusive, and streamlined eCommerce platform. the platform you choose should be tailored to your specific market. For example, don't choose a platform tailored to technology when you're a bakery. This will make all the difference in interface and useability issues.
Frequently Asked Questions About Starting a Baking Subscription Box
What Is a Baking Subscription Box?
A baking subscription box is a service that offers everything you need to make delicious baked goods from home and is delivered straight to your front door. Each company provides different recipes for various food preferences and skill levels.
Is a Baking Subscription Service Profitable?
Yes, baking subscription boxes are extremely profitable. Not only are there fewer overhead costs, but there is a growing and consistent need for baked goods, so there's always money to be made.
How Do I Start a Baking Subscription Box Service?
Here are some simple steps to get you started:
- Start with a great subscription box idea.
- Price your subscription box.
- Put together a prototype subscription box.
- Begin your prelaunch phase.
- Set up your website, marketplace listing, or both.
- Start taking orders and ship your subscription boxes.
- Manage your recurring payments with recurring billing management software.
- Automate your business with subscription management software.