What is Subscription Commerce?
Subscription Commerce is a recurring business model where customers agree to automated, recurring charges (e.g. monthly, bi-weekly) in exchange for continuous product shipments or digital service access.
Subscription Types
- Replenishment (Subscribe & Save): Consumable goods delivered on a schedule (e.g. coffee beans, vitamins, pet food) at a discounted price.
- Curated Box: Monthly curated discovery boxes (e.g. fashion, beauty samples).
- Membership: VIP access to exclusive pricing, free shipping, or premium content.
Key Metrics
- MRR / ARR: Monthly / Annual Recurring Revenue.
- Churn Rate: Percentage of subscribers cancelling each month.
- LTV: Customer Lifetime Value (dramatically higher for subscriptions).
Developer Takeaway
Vaulted Payment Tokens: Subscriptions rely on payment gateway card vaulting (customer payment profiles). Ensure your recurring billing worker handles expired card retry logic (dunning management) gracefully to minimize involuntary churn.