The ULTIMATE Subscription Box Financial Model | Part 1 of 2

I show you how to build a subscription box financial model in Excel for your DTC eCommerce business. Free Excel template included.
🔥 Watch part 2 here: • The ULTIMATE Subscript...
🔥 Subscription box strategy webinar here: • 10 Subscription Box Gr...
➡️ Book a demo with Ordergroove if you want to learn how to build a $100mm+ recurring revenue DTC business ► www.ordergroov... (use this link or mention me to be eligible for 10% off your annual contract)
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✅ Download the Excel template: mailchi.mp/d13...
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In this video we walk through how to build the customer acquisition & retention funnel for a DTC eCommerce supplement business. We model out transactional and subscription customers, break down the unit economics, model revenue, COGS, contribution margins for eCommerce, customer lifetime value, CAC, annual run rate, and LTV: CAC ratios. It was a blast.
SECTIONS:
0:33 overview of subscription box financial model for supplements business
3:24 breaking down the unit economics for ad-hoc customers
6:57 breaking down the unit economics for subscription customers
7:30 the best discounts to drive high retention for subscription box businesses
12:36 building forecast for ad-spend & CAC
16:05 forecasting new customers using marketing and CAC assumptions
18:36 building new and returning customer forecast for ad-hoc customers
23:52 how to calculate returning customers using monthly churn rates
26:33 revenue, COGS and contribution margin (gross profit) by customer segment
31:16 consolidating all revenue, COGS, contribution margin, and ad spend
32:35 how to calculate annual run rate (ARR)
34:17 why post-marketing contribution margin is so critical in eCommerce
36:32 key metrics & KPIs for eCommerce & subscription box businesses
38:51 how to calculate LTV for subscription vs. ad-hoc customers
41:05 how to calculate overall LTV across different customer segments
42:43 how to calculate and interpret LTV: CAC ratios
If you have questions - leave a comment below and I'll try to help. Cheers!
#subsccriptionbox #financialmodel #ecommerce #DTC

[@eric_andrews]

🔥Watch part 2 here: kzbin.info/www/bejne/nnmxamOnrtWVaMk

[@eric_andrews]

Questions? Let me know in the comments, happy to discuss. Also, you can always download the Excel file for free in the description if you want to take a look!

[@JuniorCuigniez]

This is great stuff thanks! Just wandering about 1 thing: The model assumes that subscriptions are monthly, i.e. a customer that hasn't churned comes back next month. How would the model look like for subscribers that come back after 3.5 months on average?

[@ryz177]

Great content! Your channel should be bigger and have more traction here! If I were to provide feedback for this channel, I would say, there should be a segment where you ELI5 these things you explain here to bring lots of people in who are wanting to venture into businesses and by fixing their daily financials through spreadsheets. In general, more storytelling as to where the people could relate these things to their businesses and how they can use them practically. This would entice more people to try and use your system. Also, if possible, provide some insights as to how to do this for other forms of spreadsheets. More success to you and this channel!

[@eric_andrews]

Appreciate that. Will keep those ideas in mind as I think about new formats and content to reach more people. Thanks!

[@lemphotsenthebe1935]

This video has helped me so much regarding how to group new business and old business , because I would normally just have them in 2 different lines and it would take someone from internal to understand what’s happening, but with your help it should help people external as well. Well done Eric, I enjoy your teachings so much

[@eric_andrews]

Awesome, yes exactly, most people don't segment out their businesses but they should! Glad it was helpful

[@blessedowo1958]

Thanks my bro

[@eric_andrews]

You got it 👍

[@miguelhidalgo9372]

I have taken many of Mr. Andrew's free and paid courses for months. As a global entrepreneur, I can easily declare that the training is world-class. The material was exceptional because it was logical and took a different approach than other Excel Financial gurus. I am applying many new skills to my sheets - paying off in dividends. Financial modeling is an essential component that permits manipulable assumptions-just what a startup or entrepreneur must integrate!

[@eric_andrews]

Really appreciate that Miguel, you are a learning machine and my pleasure to train with you!

[@asadyousafzai2904]

Your LinkedIn post brought me here Eric, saved it and will post a second comment about what I think about the video once I watch it completely. But I am sure it will have a ton of value as always.

[@eric_andrews]

So glad to hear that, yes please let me know what you think! Cheers