There are many ways to sell products online and one interesting technique is to start a subscription service business where you get to retain customers for a longer period of time. You’ve probably thought of using Cratejoy, but is it a good platform to reach out to your audience? In this review, I am going to walk through how the system works and the pros and cons you need to consider.
What Is Cratejoy?
Cratejoy is an online marketplace that lists new brands and homemade items for people who are interested in getting repeated orders (monthly to annually, depend on the subscription plan) on product varieties in these following niche categories.
- Home and Living
- Family and Kids
- Geek and Gaming
- Novelty
- Book Clubs
- Just for Men
- Fitness and Outdoor
- Food and Beverage
- Art Culture
- Subscription for Pets
- Beauty and Fashion
The platform offers two ways of getting exposure – via the marketplace and the Cratejoy custom website with each having its own fee implementation which I will explain shortly.
Sellers however, are fully responsible for sourcing/shipping the products and corresponding with the customers when orders are made. Cratejoy charges $39/month for sellers who want to use a custom domain name.
The Pros
(1) Cratejoy claims to have more than 500,000 unique visitors to their marketplace each month, out of which 60% are new visitors. Hence, you can piggyback on this traffic when listing on the marketplace, which happens to be free of charge as well.
(2) The custom web store has a built-in Mailchimp email marketing system that allows you to grow (and keep) your subscriber list.
(3) For every checkout page, Cratejoy has SSL encryption to secure your customer’s personal and financial information. This will create more trust when someone purchase your subscription products.
(4) The platform integrates conveniently with Instagram, Twitter, Facebook and Pinterest so it would be an added advantage if you are already active in any of these social networks.
(5) Overall, the back end system is very easy to use and there’s a 14 day free-trial for you to test things out before committing to the platform.
The Cons
(1) One thing that’s obvious when using the platform is the transaction fees. For every new customer acquired through the marketplace, Cratejoy takes a recurring 10% cut from the total transaction; if acquired through the custom website, the fee will be 1.25% + 10 cents and both of these fees are exclusive of the payment processor fee from Stripe or PayPal.
(2) Every editing or listing of a product on the marketplace is subjected to Cratejoy’s approval first before you can see any immediate changes.
(3) Although customers are encouraged to leave reviews on the marketplace, there’s no way for sellers to respond to those comments, whether they are negative or positive. I find the lack of this feature a huge disadvantage for business to build loyal customers.
(4) While there appear to be some SEO settings involved, they are actually geared towards optimizing for the search within the marketplace, NOT for the search engines in general. Besides, tracking is only limited to Google Analytics; there’s no way to use Google Search Console to get more data for your site.
(5) The custom website builder offers limited template (just 13 types of designs) and only sets up main pages like About, Contact and FAQ. The lack of blogging feature makes me wonder how you can acquire traffic to products on your site.
(6) Cratejoy doesn’t provide any in-house domain for your business. You would have to purchase from domain registrars and point to their servers, which requires some technical work (if you don’t mind that).
(7) Although they have a very elaborated knowledge base, they lack a forum area for members to interact and learn from one another. Again, I find this to be a huge disadvantage considering that beginners will have a lot of questions to ask in regards to starting a subscription box business.
Is Cratejoy Worthy of Your Time?
After spending a few hours looking through different types of subscription boxes, I discovered there are a lot of creative ideas that turn ordinary products into something that people actually look forward to receiving every month. Maybe it’s the anticipation or maybe it’s the surprise, who knows? But this business is real and sales is growing by the day.
The problem is, despite the popularity of the Cratejoy marketplace, I still see many brands who don’t get any reviews, who stay hidden behind more popular services and use subdomains (instead of custom domains) to create their online presences.
Most importantly, they adopt a passive business approach that is leaving the marketing strategy to the team (and letting them take a small fee as a result) which will only lead to 90% of businesses failing instead of succeeding.
The trend that you see above is generated by Google and that means, people are actually searching for subscription box services on the search engines and not just through Cratejoy. You’ll be missing out a mass audience and sales opportunities if you are only using one type of platform to market your products.
So while Cratejoy offers a nice out-of-the-box solution for beginners, it’s not an ideal platform for building a long term online business. For that, you’ll need to learn from ground up – building a WordPress website, set up an online store, understand how keywords work and create meaningful content around your niche.
If that’s the head start that you are looking for, then I highly recommend that you check out the tools and training at Wealthy Affiliate. They will provide the knowledge and skills that you need to know about online marketing 101.
I hope this review has given you a better understanding on how to start a subscription service business. Please leave your comments or questions, if you have any, in the space below and I’d be happy to respond.
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Hi Cathy-
Based on your article, I find Cratejoy to be a very lucrative business model. However the process of streamlining the business appears to be a little convoluted. Even with that said, there is a lot of traffic being generated here, so it might just be worth checking out just to see how you can leverage the traffic if anything.
Does Cratejoy offer any advertising?
Hi Mark, with 3 million visitors a month, it sure is a traffic source to look into, if you can make your brand stands out in the crowded marketplace. Cratejoy does advertising on various social networks, but we wouldn’t know how they pick which brand to feature on the front page or even if there’s a way the sellers can negotiate for such privilege as part of their membership.
From my experience as a merchant, it is really important to be able to reply to customer reviews. Most reputed online business review sites allow you to do it.
Many times, a purchase process went wrong due to misunderstandings and lack of experience of the buyer. Then they just go and complain, many times even before contacting the seller to give him the chance to fix the problem.
Having the ability to respond to negative review can help find a solution and also show other prospects that you really care about your customers.
Very well said Carlos. Thank you for sharing your insights.
Hi Cathy,
Let me see if I understand this right – Cratejoy offers business a chance to sell their homemade stuff through that network. They charge a monthly fee and also charge transaction fees?
This doesn’t really sound like something meant for a startup that is trying to get products out there. As an alternative, you mention Wealthy Affiliate. This to me, seems like a much better option for my situation.
Hi Eric, transaction/hosting fees are to be expected when you rely on other platform to market your stuff. That’s how they make money and sustain their eCommerce business. If you like to take things under control, then it’s always better to promote from your online store that is hosted within an official website that you own.
This seems like a cool business to get into. I’ve never heard of Cratejoy, but it looks promising. I like the fact of recurring commissions off of subscriptions, and it takes away all the hard work trying to promote an affiliate product. I’ve been looking for a new niche to get into and I think I may have just found it. Thanks for the great review.
Hi Garrett, subscription boxes certainly give you a lot of product ideas to write about – on a monthly basis. The good news is, there are so many niches that are trying out this business model so it’s definitely not limited to the beauty industry where it originates from.
It sounds like Cratejoy does have some good points about it, though it also has some negative points. I do like the fact that it provides a platform for selling products and services for recurring charges. If you are selling your own products, an automatic recurring order is the way to go.
I have looked at a number of different ways to make money online opportunities, and for people who are looking to sell their own products or services, whether it’s through eBay, Amazon, or Cratejoy, I think it is still a good idea to start a blog type of website with your own domain to promote your products. It’s the only way to have some control over Google rankings and traffic.
When I first started trying to penetrate that huge dark cloud called ‘making money on the internet‘, the subscription box business didn’t even exist. It’s now huge, of course, and I’ve thought about getting in on it somehow. Cratejoy does not seem to fit this bill.
Your review makes clear, through text and visuals, that this company has a real lack of technical understanding, and perhaps not helping their ‘dealers’ enough in building an online presence for their businesses.