Advantages of Subscription Model Businesses

3 minute read

Many companies are moving away from the traditional one-time payment model of buying a product or service. Instead they’re asking customers to pay monthly or yearly in order to receive the same benefits they may have previously paid upfront. This may seem like an unfair practice, but there is a good reason behind this decision.

Type in ‘subscription news’ on Google and you’ll see a stream of headlines all with businesses either entering or iterating on some form of a subscription model. It’s now possible to subscribe to something as ubiquitous as makeup subscription boxes or candy (yes, candy) or as lofty as sports cars. Food boxes, razors, furniture, project management software, music, and TV streaming services, all of these products and services are now available through subscription. The big question is why?