Subscription eCommerce

Types of Subscriptions: How Subscription Services Work

Updated April 18, 2024  |  9 min read
Key Takeaways
  • Online subscriptions encompass a variety of types, each offering unique content or services. Users select a subscription, pay the recurring fee, and gain access to the subscribed content or services. Subscriptions may or may not be cancelable.
  • Common examples of media include streaming services like Netflix and Spotify, which grant access to an extensive library of movies, TV shows, and music.
  • Another common model is the software subscription, such as Adobe Creative Cloud or Microsoft Office 365, which provide users with digital tools for various purposes.
  • News and magazine subscriptions offer online access to publications, such as The New York Times or National Geographic.
  • Gaming subscriptions like Xbox Game Pass or Apple Arcade grant gamers access to a collection of games.
  • ECommerce subscriptions, including Amazon Prime or Walmart+, provide perks like free shipping and exclusive discounts.
  • Educational subscriptions like Coursera or Skillshare offer online courses and learning resources.
A successful subscription business model needs recurring revenue for products and services.

Learn all you need to know about types of subscriptions to develop your eCommerce subscription model.

Subscription Matrix: The 3 Types of Subscriptions

Here's where you'll learn all you need to know about types of subscription services to develop your eCommerce subscription model.

A subscription eCommerce business graph for an online store.

Figure 1. Subscription Matrix

The chart above (Figure 1) shows the subscription matrix. There are three major subscription types:

Replenishment Subscription Model

  • What it does – gives people convenient access to common things they need replenished on a regular basis.
  • Pro – easy to get high retention.
  • Con – lower profit margin.
  • Industries it applies to – service-based companies, industrial or mechanical services and supplies, franchise groups, hotels, and other businesses that need services or products replenished.
  • What to consider – where in your business can you provide replenishment in an automated fashion to your end customers?
  • How it helps your business – convenience makes your business more competitive. You can generate a lot of retention with high revenue and continue to improve your margins and the overall value of your business.
Sell subscription on the right subscription eCommerce platform.
  • Example 1 – A new location for a franchise will need subscription-based supplies to run the franchise. The subscription group can indicate how large this new location is going to be and how often they’re going to need certain supplies.
  • Example 2 – Oobe is a company that provides health products, which Franchises can order on behalf of their users. This is a hybrid of replenishment and curation subscription types.
  • Example 3 – Alibaba, Granger, and Amazon all include the ability to subscribe to regular product delivery. For example, you can get a bag of coffee beans delivered every three months, or a pack of batteries delivered every six months. Pharmacies do the same with prescriptions, though they will require a more secure HIPAA-compliant patient portal.
  • Example 4 – Hotels often use mint leaves to freshen up the scent in rooms and lobbies. ScentAir is one company that delivers mint leaves on a monthly basis.

Access Subscription Model

  • What it does – gives subscribers access to specialized information and resources within your niche or industry.
  • Pro – available 24-7 to subscribers, low cost and easy to scale, and adds upward-funnel value.
  • Con – you have to have those resources in place before you start, which can be challenging. It can take some time to gather awareness about your company and the resources you offer.
  • Industries it applies to – membership groups, training, certification, insurance, discount groups, and buying groups.
  • What to consider – what resources or expertise do you have already that you could offer to your subscribers?
  • How it helps your business – establishes your business as an industry leader and improves retention rates.
A subscription eCommerce platform can improve customer loyalty.
  • Example 1 – The Institute of Internal Auditors provides certifications, training, and other resources to their members. They have different membership levels for different roles within organizations. Organizations can sign members up and form collaborative groups.
  • Example 2 – CPAmerica is an accounting association that offers resources to accounting firm employees. Subscribers with access can collaborate with each other in a structured environment. Top performing accounting firms share best practices and aren’t competing against each other.
  • Example 3Buying groups allow for bulk purchases and offer training and ongoing support within the group.

Curation Subscription Model

  • What it does – provides specialized products or services.
  • Pro – very profitable due to limited competition.
  • Con – challenging to scale.
  • Industries it applies to – customized delivery industries, specific use cases, niche categories, individual or homemade products (such as in C2C).
  • What to consider – where can you offer specific or customized resources to your subscribers?
  • How it helps your business – curation subscriptions are valuable to subscribers because they're getting customized access to subscription benefits. This results in increased customer retention rates and customer satisfaction.
The best subscription eCommerce platforms can improve sales for an eCommerce store.
  • Example 1 – Oobe, as discussed before, has a hybrid subscription model of replenishment and curation. It’s a curation subscription because they offer certain health care products that are catered to a unique situation.
  • Example 2 – ScentAir is another hybrid example because they offer specific scents for a really particular use case.
  • Example 3 – In consumer-to-consumer eCommerce, or C2C, sellers are often individuals who sell unique and homemade products. Subscriptions may be less common in C2C than other business models, but it can be valuable to the seller to have an ensured set of orders on a regular basis.

How to Develop an eCommerce Subscription Business Model

One of the benefits of subscription business models is that you can start out with one subscription type and move on to another. It's common to focus on replenishment at first, and after getting some momentum with subscribers, also form an access-type subscription.

Access subscription types can be more complicated to set up and it may take longer to complete the entire process. But once you do, you can gain the advantages of offering both types of subscription services.

Then, depending on your business model, it might make sense to take the next step into curation, which will further differentiate your business from the competition. If you can start with one type of subscription to get a foothold in the space, then you can climb up and add more as you go.

Building an eCommerce subscription business model is especially beneficial in the B2B and eMarketplace industries as this is something that many offerings don't include. Subscriptions have become very popular for membership models, subscription boxes, and other things like this. You might see these types of subscription services a lot in certain areas, but there's a huge opportunity for B2B subscriptions.

One of the most crucial things is to understand how your business can roadmap these types of subscription services into your plans for the next one, three, or five years out. You'll need to start looking at how you can increase your recurring revenue and retention rates to grow your addressable market for these subscription-based offerings.

Something else to keep in mind is that it's really important to offer self-service and automated capabilities with all types of subscription models. You'll also need integrations to your back-office systems so that all your data remains up to date.

Most end customers don't want to use a subscription that requires a lot of interaction, as they want to quickly handle tasks themselves. Customers also don't want to be surprised that a product doesn't show up on time because it turns out it's out of stock.

That's why back-end integrations and self-service are essential when it comes to any online transaction, especially when it comes to these types of eCommerce subscription models.

Subscription business models often include a monthly fee.


Strategies for Growing an Online Subscription Service

Growing and sustaining a successful online subscription service requires careful planning and strategic execution. Let's take a look at four key strategies that can help you grow your online subscription management.

Price Optimization

One of the most important factors in growing an online subscription service is price optimization. Finding the right balance between pricing your subscription competitively and maximizing revenue is crucial. Conduct market research to understand the pricing landscape and what your target audience is willing to pay for your service.

Consider implementing a tiered pricing structure to cater to different customer segments. This allows you to offer different features or levels of access at varying price points. By providing options, you can attract a wider range of customers and increase the perceived value of your service.

Regularly evaluate and adjust your pricing strategy based on market trends, customer feedback, and changes in your offering. Consider offering discounts or promotional pricing to incentivize new sign-ups or retain existing customers. A well-optimized pricing strategy can drive customer acquisition and increase customer lifetime value.

Metrics and Reporting

To effectively grow your online subscription service, you need to have a clear understanding of your business metrics and key performance indicators (KPIs). Track important metrics such as customer acquisition cost, customer lifetime value, churn rate, and average revenue per user.

Use analytics tools and reporting systems to gain insights into customer behavior, engagement levels, and revenue trends. This data will help you identify opportunities for improvement and make data-driven decisions.

Regularly analyze and interpret your metrics to identify patterns and trends. For example, if you notice a high churn rate among a specific customer segment, you can investigate the underlying causes and take proactive measures to address them. Subscription eCommerce platforms can be integrated with customer relationship management (CRM) software.

Subscription business models make customers pay for a streaming service.

Churn Reduction

Reducing churn, or the rate at which customers cancel their subscriptions, is critical for the long-term success of your online subscription service. High churn can hinder growth and impact revenue stability. Implement strategies to improve customer retention and reduce churn.

Focus on delivering exceptional customer experiences and continuously adding value to your service. Engage with your customers through personalized communications, such as targeted emails or exclusive content. Offer proactive customer support to address issues promptly and provide solutions.

Regularly analyze customer feedback and conduct satisfaction surveys to gain insights into customer sentiment. Identify common pain points and areas for improvement. By addressing these concerns, you can enhance customer satisfaction and loyalty, ultimately reducing churn.

Flexible Billing and Payments Infrastructure

Offering a flexible billing and payments infrastructure is crucial for accommodating diverse customer preferences and optimizing revenue streams. Provide multiple payment options, such as credit cards, PayPal, or digital wallets via a pay hub to cater to different customer references.

Consider offering flexible billing cycles, such as monthly, quarterly, or annual subscriptions, to accommodate varying budget preferences. Some customers may prefer the convenience recurring payment solutions, while others may be willing to commit to a longer subscription period for a discounted price.

Additionally, make sure your billing system is reliable and secure. Ensure that customer data is protected and comply with relevant data protection regulations. A seamless and secure payment experience fosters trust and encourages customers to continue using your service.

Subscription business models must consider customer aquisition costs.

Ready for a Top Subscription eCommerce Platform?

Not every eCommerce platform can handle the subscription business model, which is why it's important to look for a subscription eCommerce platform that's built to handle the significantly different steps that differ from business models. Even better, find one that lets you sell subscriptions and sell physical products.

If you're looking for a software vendor who can help you discover what types of subscription services are best for your business, you've come to the right place. Clarity Ventures offers a no-pressure, completely free discovery process to help you create a plan. We'll also show you how we differ from other subscription eCommerce platforms, so get in touch today!



A subscription box is a recurring delivery service business model where subscribers receive curated packages of products at scheduled intervals, typically monthly. These boxes often cater to specific interests or themes, such as beauty, food, fitness, or hobbies like gaming or crafting. Subscribers sign up for the service and can choose from various subscription box options based on their preferences and budget.

A subscription box is usually a monthly subscription where subscribers eagerly anticipate the arrival of their box, which contains a selection of items chosen by the subscription service. The contents are usually a surprise, adding an element of excitement and discovery. The best subscription boxes offer convenience and novelty, allowing consumers to explore new products and brands without extensive research or shopping. They also make popular gifts due to their customizable nature. Subscription boxes provide a unique and personalized shopping experience, enhancing customer engagement and loyalty.

Examples of such a subscription service include Stitch Fix, Dollar Shave Club, and every popular streaming service.


Online subscriptions are recurring services or products that individuals or businesses can access by paying a subscription fee. They provide digital content or services through platforms or websites. Common types include streaming services (e.g., Netflix), software subscriptions (e.g., Microsoft Office 365), news and magazine subscriptions (e.g., The New York Times), gaming subscriptions (e.g., Xbox Game Pass), eCommerce subscriptions (e.g., Amazon Prime), and learning subscriptions (e.g., Coursera).

Users select a plan, register, make payments through a payment gateway, and gain access to the subscribed content. Subscriptions can be canceled or switched, and renewal typically occurs automatically unless canceled. Refund policies may vary.


There are various types of online subscription services available, including:

  • Streaming services: These subscriptions allow users to access movies, TV shows, music, and other forms of digital media through platforms like Netflix, Amazon Prime Video, Spotify, or Apple Music.
  • Software subscriptions: These subscriptions provide access to software applications or tools, such as Adobe Creative Cloud, Microsoft Office 365, or Salesforce.
  • News and magazine subscriptions: These subscriptions grant access to online publications, newspapers, or magazines, such as The New York Times, The Guardian, or National Geographic.
  • Gaming subscriptions: These subscriptions enable gamers to access a library of games or additional content through platforms like Xbox Game Pass, PlayStation Plus, or Apple Arcade.
  • ECommerce subscriptions: Some online retailers offer subscriptions that provide perks like free shipping, exclusive discounts, or access to special promotions. Examples include Amazon Prime, Walmart+, and Sephora's Beauty Insider program.
  • Learning and educational subscriptions: These subscriptions offer access to online courses, educational platforms, or learning resources, such as Coursera, Udemy, or Skillshare.

The specifics of how online subscriptions work can vary depending on the platform or service provider. The general process starts with users choosing the subscription plan or package that best suits their needs. This could involve selecting a specific duration, subscription features, or content categories. Next comes registration, where users create an account with the service provider and provide their payment information via payment gateways or hubs. This is often done through a secure online process..

Users then pay for the subscription either on a monthly, quarterly, or annual basis, depending on the subscription terms. Payment is typically made using a credit card, debit card, or other accepted payment methods via a payment gateway. Once the payment is confirmed, the subscription is activated, and the user gains access to the subscribed content or services. This may involve logging into an online account or using dedicated applications or software.

Last comes renewal. Subscriptions are usually set to renew automatically at the end of each billing cycle unless the user cancels or modifies their subscription preferences. The payment is then charged again for the subsequent subscription period.


A subscription is a type of product that offers access to digital content or services on a recurring basis in exchange for a subscription fee. It is not a physical item, but rather a digital offering provided through online platforms or websites. Subscriptions can encompass various categories, such as television streaming, software applications, news and magazine publications, gaming libraries, e-commerce perks, and educational resources.

Users pay for the subscription and gain ongoing access to the content or services for the duration of their subscription period. Subscriptions can be canceled, switched, or renewed based on the user's preferences and the specific terms of the subscription.


A subscription eCommerce platform is an online service or website that facilitates the distribution and management of subscriptions. It serves as a central hub where businesses or content providers offer their subscription-based products or services to consumers. The platform provides a user-friendly interface for users to browse and select from various subscription options. It handles the registration and payment processes via payment gateways, ensuring secure transactions.

Additionally, the platform often includes features for managing subscriptions, such as allowing users to view their subscription details, switch plans, cancel subscriptions, or access customer support. Overall, a subscription platform streamlines the subscription experience for both providers and subscribers.


In eCommerce, various subscription models cater to diverse customer needs and can be added to any business model:

  • Replenishment Subscription Model: Regular delivery of consumable goods. Ideal for products like groceries, toiletries, or pet supplies.
  • Curation Subscription Model: Curated products delivered at regular intervals. Often seen in beauty boxes, fashion, or gourmet food.
  • Access Subscription Model: Grants exclusive access to premium content or features. Common in streaming services, news websites, or online communities.
  • Surprise Subscription Model: Offers a surprise selection of products each time. Popular in subscription boxes for toys, books, or snacks.
  • Discount Subscriptions Model: Provides discounts or special pricing on products. Encourages customer loyalty through cost savings.
  • Membership Subscription Model: Grants privileges or perks to members. Seen in loyalty programs, offering early access or member-only events.
  • Software as a Service (SaaS) Subscription Model: Charges for access to software on a recurring basis. Common in cloud-based applications or productivity tools.
  • Box-of-the-Month Subscription Model: Delivers a themed monthly subscription box for a monthly fee. Popular for niche markets like fitness, gaming, or crafts.
  • Freemium Subscription Model: Offers a basic service for free, with premium features at a cost. Encourages users to upgrade for enhanced functionality.
  • Hybrid Subscription model: Combines elements of different subscription models. Tailors offerings to a broader range of customer preferences.

These models allow eCommerce businesses to create flexible and attractive offerings, fostering customer retention and revenue growth.


The subscription business model has gained immense popularity across various industries due to its convenience and recurring revenue potential. Key features include:

  • Recurring Payments: Customers pay a regular recurring fee at predetermined intervals (monthly, annually, etc.).
  • Tiered Pricing: Offering different subscription levels with varying features and prices to cater to different customer needs.
  • Auto-Renewal: Subscriptions automatically renew unless canceled by the customer.
  • Flexible Billing: Options for customers to modify their subscription plans or billing details easily.
  • Content Access: Providing access to digital content, services, or products during the subscription period.
  • Customer Relationships and Retention: Focusing on long-term relationships with customers rather than one-time sales.
  • Personalization: Tailoring offerings to individual preferences and behaviors to enhance customer experience.
  • Free Trials: Offering trial periods to attract new customers and allow them to experience the service before committing.
  • Cancellation Policies: Clearly defined procedures for customers to cancel subscriptions without hassle.
  • Analytics and Insights: Utilizing data to understand customer behavior, preferences, and trends, facilitating targeted marketing and product improvements.

These subscription business model features collectively create a sustainable revenue stream while fostering customer loyalty and satisfaction.


Yes, an online subscription business can be profitable. It depends on various factors such as the demand for the offered content or services, the pricing strategy, the size of the target market, and the ability to retain customers.

Successful online subscription businesses often focus on providing unique, high-quality content or services that attract and engage a loyal customer base. They leverage effective marketing strategies, offer competitive pricing, and continually innovate to stay ahead of the competition.

By acquiring and retaining a significant number of subscribers while effectively managing costs, an online subscription business has the potential to generate recurring revenue and achieve profitability.


The most profitable model to sell subscriptions depends on various factors and can vary based on the nature of the business and target audience. However, one of the highly profitable models is the tiered pricing model. By offering multiple subscription tiers at different price points, businesses can cater to different customer segments and capture a wider range of customers. This model allows for maximizing revenue by providing higher-priced tiers with premium features for customers willing to pay more, while still offering a more affordable option for price-sensitive customers.

By carefully designing the features and value proposition of each tier, businesses can create a compelling offering that encourages customers to upgrade to higher tiers, thereby driving profitability. However, it's important to conduct thorough market research, understand customer preferences, investigate custom acquisition costs, and continually evaluate and optimize the pricing tiers to ensure long-term profitability and determine which subscription eCommerce platform to choose.

Still have questions? Chat with us on the bottom right corner of your screen #NotARobot

Related Posts

ACH hold for credit or debit card.
Autumn Spriggle is a Content Writer at Clarity Ventures who stays up to date on the latest trends in eCommerce, software development, and related topics to provide readers with the latest and greatest. She strives to help people like you realize the full potential for their eCommerce business.