Billing Cycle Recommendations for Subscription Boxes

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Running a subscription box business is complicated. Intervals, charge dates and buffer days need to work together to ensure your business runs efficiently. Creating a seamless experience for your customers will go a long way in keeping them happy. Happy, loyal customers result in a successful business.

Bold Subscriptions has thousands of customers with individual needs. After working with them for years, we have developed best practices which we are happy to share with you. 

Most subscriptions offered are not for essential services and are considered a luxury by customers. Because of this, they are the first to be cut when someone is experiencing financial difficulty. Customers tend to have more disposable income in the middle of the month, so making your renewal date on the 15th of the month, rather than the first, when most bills are due, will result in fewer cancellations and credit card declines. 

Charging your customers on the 15th of the month has been proven to increase your average subscription length, and decrease your churn rate. 

Step 3 Select Intervals

For our recommended model, you must set your buffer days to 14. With this configuration, you will always have a set cut off day, the last day of the previous month. 

If you choose to charge customers earlier in the month (between the 5th-14th), ensure your buffer day value is always one number smaller than your re-billing date; your cut off date will always be the last day of the previous month. 

With your set billing date always on the 15th and your buffer days set to 14, the cut-off date is always the last day of the previous month. You will have a consistent, easily remembered sales window, the entire prior month.

For example, if your customer purchases in December, their first shipment will be sent out in early January. All sales in January ship out in early February, all sales in February ship out in early March.

With this model, at the beginning of every month, you can export your batch of Shopify orders from the previous month; from the 1st to the last day of the month. This will always be the exact batch of orders to fulfill and ship. Depending on how long it takes to package and ship your orders at the beginning of every month, often your subscribers will be receiving their product around the same time they are being billed for their next subscription order (the 15th). This tends to result in a positive customer experience, and result in fewer cancellations. 

For example, on January 1, you can export all subscription orders from Dec 1st - 31st. You can ship out these orders anytime after January 1st (typically as quickly as possible). On March 1st, you can export all subscription orders from January 1 - 31st. On April 1st, you can export all subscription orders from February 1 - 28th. 

Shopify allows you to export orders within a specific date range, which makes this process very easy! You can learn more about this here: Export orders by date. Using the "recurring_order" tag the app applies to every subscription order, you can segment your subscription orders from your one-time orders. 

If you change the date you charge customers; this will also adjust the cut-off unless you change the number of buffer days to accommodate the change.

The number of buffer days you set determines the cut-off date, which may not always be a consistent date every month, as not all months have the same number of days. For example, if you have your charge date set to the 15th of the month and your buffer days set to 14, your cut-off date is the last day of the previous month, either the 30th or the 31st depending on the month. 

Buffer days is the number of days that fall before your monthly billing date. If someone orders within this buffer period, they skip the upcoming billing cycle and their second order will fall within the following billing period, which is typically the next month. 

The model described above is ideal because the cut off day will always be the last day of the previous month, regardless of how many days are within the month. Using a custom schedule may not always allow for a fixed cut off date, which can make exporting orders from Shopify more difficult. 

Shipping/charge dates, buffer days, cut-off dates, sales windows and shipping windows can be quite complicated. The Bold Subscriptions recommendation: charge date in the middle of the month with 14 buffer days, are set to work for the majority. If you stick with them, you will be set up for success. 

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