The perennial question for retailers is how to build predictable revenue. It’s an important, but not always straightforward, path to growth. 

On one hand, launching a subscription program seems like the right answer—but data shows acquiring subscribers is getting harder and more expensive, with acquisition rates falling from 4.1% in 2021 to just 2.8% in 2024. 

Never mind that US subscribers are now expecting no-strings-attached flexibility and the ability to cancel at any time. Fear not, retail product subscriptions are still a hot item for millennials, and with the right platform, you won’t blow your acquisition budgets trying to acquire them.

This guide walks you through the full process of building a successful ecommerce subscription program, from assessing your product fit to mastering the retention tactics that deliver long-term growth.

What is an ecommerce subscription?

An ecommerce subscription is a business model where a customer pays on a recurring schedule—like monthly or quarterly—to receive physical goods. This model is typically managed through a self-serve online portal where customers can modify their orders, delivery frequency, or billing information.

Starting a subscription business now lets you tap into a strong market. In the second quarter of 2025, US ecommerce sales hit $304.2 billion, a 5.3% year-over-year increase, accounting for 16.3% of all retail sales. 

Subscriptions help you this demand by:

• Building predictable, recurring revenue streams
• Improving inventory forecasting and management
• Increasing customer lifetime value (CLV)

The three ecommerce subscription models

Subscriptions generally fall into three categories. The most successful brands often blend them.

Replenishment

This is your classic model for predictable-use products. Think coffee, vitamins, or filters delivered on a 30-, 45-, or 60-day cycle. It’s a great way to stabilize demand and lock in repeat purchases, making your cost of goods sold (COGS) and shipping costs more predictable.

A good example of a brand selling replenishment subscriptions is Molekule. The company sells air purifiers, but their business value and long-term customer relationships come from filter refills. 

👉 Learn how Molekule grew subscription revenue after replatforming to Shopify from Adobe Commerce. 

Curation

Most of those unboxing experience videos you’ve seen on TikTok come from a curation subscription. In this case, the brand creates a new assortment of products each cycle, which can be monthly or quarterly—whatever works for your customers. 

The curation model improves the perceived value of your brand, as you’re looked at as an expert in your category. Customers trust that you’ll curate the best of the best for them. That’s why a curation subscription is good for categories like apparel, food, beauty, or hobbyist gear.

BARK’s BarkBox is a successful example of a curation subscription model. The brand doesn’t sell single, repeatable products—they sell themed experiences in a box every month. 

👉 Learn how BARK grew holiday subscription revenue by 8% after switching to Shopify. 

Access

When customers pay for an access-style membership, they pay for perks. The subscription can unlock exclusive pricing, members-only products, or free shipping, for example. It can be used as a standalone model or as an add-on to make your replenishment or curation offer stickier. 

Alpha Box & Dice uses a hybrid model for their wine club, dubbed the Life Improvement Plan. Members receive a monthly curated box of wines plus additional perks such as 20% off all online purchases, added value in every box, and free shipping.

👉 Learn how Alpha Box & Dice grew their membership by 700% after switching to Shopify. 

When subscriptions hurt unit economics

Subscriptions aren’t guaranteed profit, however. Without managing your unit economics, the model can quickly break down. 

As mentioned above, subscriber acquisition rates slid to 2.8% in 2024. If your customer acquisition cost (CAC) outpaces your payback period, you’re just renting customers at a loss. 

The other silent killer is involuntary churn, which is when a customer wants to stay but their payment fails. With fraud-related declines up 29% and a stampede to alternative payment methods, a weak payment stack is a hole in your bucket, losing customers you already paid to get.

And you can’t forget about regulations that cut into your margins. Regulators like the FTC are focused on simple cancellations. So, a clunky, confusing, or non-compliant user experience actively risks forced refunds, costly chargebacks, and long-term reputational damage. The courts have blocked the current ruling, but the issue still stands—subscribers want to be able to pause or cancel their subscriptions without hassle.

The 2026 business case: Revenue resiliency and CLV

With inflation shock and tightening customer wallets, brands are working toward revenue resiliency. This is a simple way of saying building predictable revenue streams that smooth out the demand spikes and lulls. 

We know that paid acquisition efficiency has been in steady decline. A subscription model is your defense. Say you spend $20 on an ad to get a customer. They subscribe to a $50 product, maybe for a 10% discount. You make a little less profit on that first sale, say $5.

But, you know they’re going to buy again next month. And the month after that. You don’t have to pay to get them back. That’s why customer lifetime value (CLV) is the most important metric in an ecommerce subscription offering. 

Forecasting demand and inventory with subscribers

Subscriptions help you better plan procurement because you can use subscriber data to make commitments. 

Tools like Ordergroove’s inventory report, for example, show you future-dated unit demand by SKU, mapped out by specific shipping windows. You can see exactly what you’ll need to ship in four, eight, or 12 weeks. 

Use this visibility to place your purchase orders against a known subscriber schedule. Factor in your at-risk units using pause/cancel probabilities, and define your required buffer. This is a number you should be reviewing with your ops team every week.

Mapping LTV/CAC and payback for subscription SKUs

Define your subscription CLV on a gross-margin basis:

CLV = (Average order value × margin %) × (Expected # of kept orders per cohort)

Account for real-world pauses, skips, and churn. Then, you can add in expansion revenue like bundles or add-ons and subtract the losses from failed renewals.

It’s important to measure payback in orders. Why? Customers might skip orders. So, if your CAC is $50 and your gross profit per box is $25, your payback period is two orders, not two months. A customer might take four or five months to place those two orders. Using this approach, you can accurately manage cash flow. 

Benefits of ecommerce subscriptions

Hassle-free shopping experience

Consumer buying habits continue to trend toward hassle-free shopping experiences, free delivery, and instant gratification. The subscription model serves all those needs, providing value to the customer with low effort and strong growth potential for subscription-based businesses.

In many ways, it comes down to convenience. Gone are the days of running out of things and having to pop to the store last minute. Subscriptions are the ultimate example of “set it and forget it.” The customer makes the decision once when they sign up, and then, like clockwork, they receive their goods or services without having to think about it again.

And with the added benefit of low-cost or free shipping, it removes the hassle of having to make a trip out to get something—a customer benefit that has only grown as expectations shift toward effortless fulfillment.

Reduced churn rates

Subscription businesses often experience lower churn rates due to a closer relationship with customers. As a benchmark, the average churn rate for B2C businesses is 6.77%. Voluntary churn can be caused by customer dissatisfaction, while involuntary churn points to payment issues.

Pricing also tends to be far more straightforward with subscription-based businesses, as stores focus on macro pricing with tiers, instead of individual prices on an array of products.

Higher repeat purchases

Ecommerce subscriptions also help brands increase repeat purchases since you don’t have to win the business from scratch every time if you have a loyal, subscribed customer base. You have a higher chance of selling to an existing customer versus selling to a new prospect.

Subscription-based business models enable companies to be deeply data-driven with customer targeting and acquisition, and pass cost-savings from distribution, marketing, and personalization to their customers. The insights that subscription-based businesses have into their customer base create enhanced cross-selling and marketing opportunities that simply aren’t possible for typical retailers.

Higher company valuations

In addition, should you decide to sell your business, recurring revenue makes your company more valuable and attractive to investors or potential buyers.

The key to subscription businesses is customer retention and customer lifetime value (CTV). That’s why churn rate, customer acquisition rate, and the cost of finding new customers are important metrics when you run a subscription business.

Compliance by design: From auto-renew to click-to-cancel

The new enforcement landscape

Regulators have two core requirements for brands offering subscriptions: make your terms clear, and make cancellation easy. Regardless of specific regulatory requirements, your program should align with both expectations. 

For a while, all eyes were on the FTC’s new Negative Option Rule, which was finalized in late 2024 and set to take full effect in May 2025. It mandated clear pre-billing disclosures, express informed consent, and a simple cancellation method that was at least as easy as signing up. 

Then, in a major shake-up, that specific 2024 rule was vacated by the Eighth Circuit Court on procedural grounds in July 2025. So, are you in the clear? No. The FTC is still suing companies using other laws, like ROSCA (Restore Online Shoppers’ Confidence Act) and the FTC Act. 

It can still go after brands for:

• Hiding the real price or the auto-renewal terms
• Charging customers without getting clear and informed consent
• Making it a nightmare for customers to cancel

States are also getting stricter. For example, if you want to sell subscriptions in California—the world’s fourth-largest economy—you’ll need to comply with its expanded Automatic Renewal Law (ARL), which applies to contracts from July 1, 2025, and adds strict notice and cancellation requirements. 

UX checklist: Enrollment, disclosures, cancellation, renewal notices

If you want to avoid any legal trouble, just be honest with subscribers. Be clear about terms and conditions, and don’t try to charge customers without knowing if they really want to be charged. 

Here is a quick checklist for building out a compliant subscription program:

• Before collecting billing info, clearly show the exact price, billing frequency, how to cancel, and all trial-to-paid conversion details.
• Get an unambiguous “yes” for recurring charges. These must be captured separately from other terms and cannot use prechecked boxes.
• Make your cancellation process as easy as your signup process.
• Do not require customers to make a phone call, use live chat, or sit through a sales pitch to cancel.
• Send renewal reminders for longer subscriptions. 
• Notify customers of any price hikes or service changes and provide a cancellation path within that same notice.
• Store timestamped proof of the UI version, IP address, and event logs that show the customer gave express consent.
• Keep records that you successfully sent all required renewal and change notices to your active subscribers.

How to create an ecommerce subscription business

1. Assess product-market subscription fit

Before building out your subscription program, prove to stakeholders that customers want an ongoing relationship with you. Chances are, you already have your target customer mapped out, but dig deeper into their use case for a subscription. 

Interview your most valuable customers. Say you sell coffee—it’s obvious your customer is a coffee drinker, but you may find they have two different needs they’d use a subscription for:

• Customer A’s need is “Never let me run out of my favorite blend.” They are all about convenience and preventing the anxiety of an empty coffee jar at 7 a.m..
• Customer B’s need is “Help me discover new, interesting roasts.” Their use case is about discovery and novelty—they’d be bored getting the same bag every month.

These are two totally different subscription models. Customer A would fall into replenishment, while Customer B would prefer a curation-style subscription. Determine what needs your customers wat to address before creating your first offer. 

2. Build package tiers and discounts

Build tiers that improve your orders-to-payback and help your customer cohorts stick around longer. 

The best way to lift perceived value without over-discounting is to offer flexibility. This includes cadence choices, like 30, 45, or 60 days, and build-a-box or one-time add-on options.

ButcherBox uses flexibility to their advantage in their meat subscription box. You can choose from over 80 products and change your delivery frequency anytime. 

The orders-to-payback math tells you how much you can afford to discount and for how long. Let’s use a simple example:

• It costs you $20 in ads to get one new subscriber. 
• You make $10 in profit on every single shipment. 

Two orders are all it takes to break even on your ad. Now you know you can’t just give a 20% discount forever. Instead, you create a discount tier based on that two-order payback:

• Option A: Offer a big 25% discount for the first order to get them to sign up, but the discount drops to 5% after that.
• Option B: Offer a 15% discount that only lasts for the first two orders and then expires completely.

In both cases, you use the math to create a discount that gets you the customer, but you also have a plan to stop giving away that profit right after you’ve paid back your ad cost. 

Knowing the math, you can create compelling marketing campaigns like ButcherBox’s Thanksgiving promo. The brand can comfortably offer $17 off a customer’s first six orders, knowing they’ll pay back their CAC in that period of time. 

ButcherBox even adds a retention layer here with their Free Ground Beef For Life offer. It’s a small cost for them, but a huge value for the right customer, and makes them not want to cancel. 

👉 Learn how ButcherBox increased conversion rates by going headless on Shopify. 

3. Get the right ecommerce platform and apps

Your tech stack will either encourage retention or create churn. If your ecommerce platform cannot unify your data and help you connect with customers, you’ll have a hard time selling subscriptions. 

Imagine your B2B channel gets a huge order and clears out all of your inventory for a specific product. Your subscription system, which runs on a separate platform, doesn’t know the inventory is gone. It tries to auto-renew all your loyal subscribers for that product. Every single one of those renewal orders then fails due to the stockout.

With Shopify, you get a single, real-time data model that unifies your online store, marketplaces, social channels, B2B, and point of sale (POS). This gives you one view of your customer, orders, and inventory, so you can better manage inventory and customer experience. 

There are also a handful of subscription apps that work seamlessly with Shopify Checkout. Consider the following tools to run your program:

• Recharge Subscriptions: The go-to, heavy-duty solution, Recharge is a trusted app for complex subscription programs, giving you a branded portal for your customers plus automated tools to chase failed payments (dunning) and prevent cancellations.
• Skio: Known for modern features like passwordless subscriber login, conditional cancellation flows, analytics, and a one-click native Shopify Checkout migration.
• Appstle Subscriptions: A highly-rated app offering flexible models like build-a-box and bundling, along with flat-rate pricing options.

4. Create an onboarding flow that reduces early-term churn

Seeing how valuable getting a new subscriber is, you don’t want to risk early churn. Have an onboarding process in place that gets subscribers used to your brand and excited to stay with you. 

Start at day zero by setting expectations on your confirmation page and email. State the next charge date and link to the portal where they can skip, pause, or swap. Send a reminder email before the next charge, providing one-click actions to delay, swap a variant, or change quantity.

When a customer clicks cancel, route them to a cancellation-prevention flow. Ask why they’re leaving and offer a reason-based save:

• “Too much product?” → Offer to adjust the cadence or pause
• “Wrong flavor?” → Offer to swap the product
• “Too expensive?” → Offer a one-time discount

These targeted flows help reduce churn. Recharge, for example, claims their tool can save up to 33% of would-be cancellations by offering personalized reasons to stay.

Build your subscription retention system

If there is one thing to keep in mind when it comes to retention, it’s flexibility. Data from 2025 shows that “pause” options are up 68% year-over-year and 71% of retailers now offer hybrid monthly/annual plans.

Since you’re designing with your customer in mind, here are a few ways to provide value even after they sign up. 

Provide a self-serve portal

Your customer portal is your single most important retention tool. One of the main reasons people churn from a subscription is that they have too much product. A self-serve portal gives them the control to solve this problem without canceling.

The portal should have a clean, intuitive interface that makes it effortless for customers to manage their own subscriptions. At a minimum, it should:

• Let them try a new flavor or product
• Give them the power to reschedule or skip an upcoming order with one click
• Allow them to change how much product they receive

Create bundles and add-on options

Invite subscribers to add a one-time product or a new bundle to their next box. This not only helps keep subscribers curious about your offer but also improves product discovery and increases average order value (AOV). You can use the Shopify Bundles app to create these offers and track their performance with built-in analytics. 

A good example of this in action is Daily Harvest. Subscriptions are at the heart of their entire business, and they lean heavily on dynamic bundle offerings that their customers love and that maximize lifetime value. 

👉 Learn how Daily Harvest runs its subscription program on Shopify. 

Reward customers for their loyalty 

Identify typical dropoff points where customers churn and implement a rewards system. For example, you can create a cash-back reward program that grows with order count:

• Orders 2–4: A 2% cash-back reward to incentivize them past the crucial first-order hurdle.
• Orders 5–9: The reward increases to 4%, which helps build a strong purchasing habit.
• Orders 10+: True loyalty is rewarded with a significant 6% cash back, making your best customers feel like VIPs.

Make rewards easy to find and use. For example, if a customer has unused credit from your rewards program, prompt them to use it. This gives customers a compelling reason to finish their purchase and stay loyal. 

Track the right subscription metrics 

If you’re investing money into your subscription program, you’ll want to track more than top-line subscriber growth. 

Use Shopify’s built-in Customer cohort analysis report to understand when and why customers leave. It can show you, for example, what percentage of January signups are still around in March. That way, you can understand if a specific campaign or acquisition channel brings in low-quality subscribers. 

Also, track your expansion revenue, or how much people are spending on add-ons and bundles. This metric can go up even if your subscriber count stays flat, which means loyal subscribers are spending more overall. It’s a healthy sign that your subscription program delivers sustained value. 

Challenges of ecommerce subscriptions

With all the good, there are some drawbacks to ecommerce subscriptions. Here are a few things to consider:

• Managing churn: It’s hard to keep customers on subscription models. Unlike traditional one-time purchases, subscription services rely on ongoing customer satisfaction and engagement. The challenge is to keep offering value that justifies recurring fees.
• Balancing CLV and acquisition costs: Not only must you attract customers, but also ensure they find enough value to continue their subscriptions. Subscriber-based businesses, like meal kit delivery services, invest heavily in customer acquisition. If customers don’t stick around long enough to recoup these costs and make a profit, however, you’ll struggle to grow.
• Subscription fatigue: Subscriptions are everywhere now. From Disney+ to Adobe Creative Cloud, consumers are experiencing subscription fatigue, where customers get tired of managing subscriptions and don’t want to add new ones.

Ecommerce subscription best practices

These days, you can turn any product or service into a subscription. While there have traditionally been subscription categories like home goods (e.g., razors or vitamins), apparel, food, or beauty products, today there’s far more flexibility—if you sell a product, you can launch a viable subscription using modern ecommerce platforms.

PrettyLitter sells what they call the world’s smartest kitty litter. While the product keeps tabs on a cat’s health by changing color, the company’s head of business intelligence, Joe Barger, suggests what PrettyLitter really sells with their subscriptions is convenience and peace of mind.

“There are millions of things on everyone’s minds these days,” Joe says. “We offer our customers fewer things to worry about when it comes to some of the most important aspects of their lives—their pets.”

Joe shares some of PrettyLitter’s most valuable insights to give other brands ideas to succeed with subscriptions.

Learn from power users

PrettyLitter has established a VIP group on Facebook, home to thousands of their top customers. The group not only allows Joe and his team to learn directly from power users by getting direct feedback, but it also gives the brand an opportunity to build brand ambassadors.

“Continuous adaptation is a key to success,” Joe says. “What works today may not work tomorrow, and you need to always keep a pulse on what’s working or not and be ready to double down on wins while pulling back on poor-performing channels.”

Build a unique value proposition

Consumers haven’t been conditioned to think of kitty litter as an ecommerce subscription. But saving customers time and knowing the kitty litter that arrives automatically every month helps them protect and care for their pets—that’s the core value proposition driving customers to stick with the brand.

“We have built a clear and unique value-add that addresses the convenience of a continuity model,” Joe says. ”Especially for a product that is needed on a consistent and ongoing basis.”

Personalization increases retention

Offering online subscriptions allows PrettyLitter to tailor branded communications to the customer. Customers can revisit the PrettyLitter site at their convenience and learn about the benefits, as opposed to when they’re already in a rush at the grocery store.

Even more important, personalizing the subscription experience helps PrettyLitter retain more of their subscription customers. Instead of a one-size-fits-all offering, PrettyLitter offers customers flexibility and choice.

“It’s rare that there is one solution for everyone,” Joe says. “Offering customers the ability to build their own flexible plan is key to retaining your customers. If you’re going to introduce other products, make sure that they’re a relevant fit to your brand. A random product that doesn’t tie back to your core brand could do more harm than good.”

Monitor cash flow

With customer acquisition costs and churn relatively high, ecommerce subscriptions require more attention than other businesses typically do. Paying close attention to the financial details of your subscription business is key—especially when you consider that consumers are being conditioned to expect more.

Customer expectations, according to Joe, are rising steadily due to Amazon’s fast and free shipping. While matching Amazon’s expedited shipping is expensive, subscription brands must simultaneously meet customer expectations while intelligently managing the company’s finances.

“Cash flow management is very important to ensure a healthy business,” Joe says. “Subscription KPIs are very different from traditional retail models. Make sure you have the budget and cash flow to spend on acquiring customers.”

And kitty litter isn’t the only nontraditional good that works under a subscription model. Subscriptions can also work for items that traditionally aren’t purchased frequently or don’t lend themselves to constant replenishment.

This article originally appeared on Shopify and is available here for further discovery.