On-demand subscription-based delivery apps prove to be profitable for both - users and business owners. The customers don’t need to worry about ordering their regular use items and businesses will have a fixed revenue every month. Thus, monthly subscription apps act as a relief in our fast paced world.
Before we talk about subscription-based delivery app development in technical terms, let’s go through the basics!
Introduction to Subscription Business
A subscription business model differs from the traditional business model. Instead of purchasing a single item for a single price, a customer subscribes to pay a fee on recurring basis and receives repeated value in exchange.
For instance,
You purchase a magazine subscription and in return for a monthly fee you receive the digital/hard copy of the magazine.
You can subscribe to a flat fee for services used on a regular basis such as physical goods delivery with Amazon Prime or your mobile internet plan.
The recurrence of value is the key for a subscription business, otherwise it doesn’t make sense to convert a one time fee into recurring fee, if you don’t get any value.
Revenue Model of Subscription-Based Delivery Application like Blue Apron
Before you hire an on-demand app development company, it is essential to understand how the blue apron app earns revenue.
The price of food delivery on subscription basis usually costs customers more as compared to meal planning and grocery shopping. So, the revenue of an on demand food delivery app basically depends on the cost of service along with a little bit of cooking education.
Banner Ads - You can join an ad network like Google AdSense, to host banner ads on your website.
Affiliate Marketing - There is an option to join the affiliate program of other food industry businesses to promote them through your website.
Franchise Fee - As the popularity of your platform grows, more and more chefs will like to get on board. A franchise fee for such chefs is another revenue channel option.
Selling Merchandise - Sale of branded cookware, tools, recipe guides and merchandise is another means to earn extra money while improving your brand’s presence.
Benefits of Subscription Based Business Model
Subscriptions help you to build a healthy relationship with customers
In the case of one time purchase, the relation between your business and customer ends once the transaction is complete. As an app developer, the cost to maintain the application is managed from the margin of single app purchase. It means you make less money when a customer asks for support.
On the other hand, in the case of subscription business, with the repeated charges you can fund your support team. Good support services means customers will stay with you for a longer time.
Subscriptions turn your customers into assets
When you get a customer for your subscription app, they immediately become your assets. The longer they stay, the more money your business will make.
In the single purchase model, the lifetime value of a customer is by the price of a single purchase and repeat transactions later on. In the subscription model, over time, your customer turns into indefinite and higher profit.
The recurring revenue from subscription app depends on the performance of your entire business and not just its front end.
Subscribers engagement is a two way street
When someone subscribes to your business’ product, they expect to get their money’s worth. Instead of stepping out the minute a transaction is completed, such customers keep coming back.
Every time a customer comes back, you create a touch point with your business. If you want to make improvements in your business, you already have a loyal fan base to give you feedback on all the changes you have done.
The subscription based customers cause engagement and make the business more lively. Thus, making the value exchange aspect a two way street.
Now, that you are clear with the basics of a subscription app, let’s talk about how to develop on demand subscription based delivery app.
How to Build Subscription Based Delivery Application and Launch it Successfully?
First things first - What is your on demand delivery app’s value proposition? You should always validate your app idea before you begin with app development. The subscription service is a hit, but that doesn’t mean that you jump to conclusions and build anything that resembles a delivery service app. Think before you act!
Fortunately, it is very easy to validate the app idea for a subscription business because unlike other applications it is not product based. Instead, it is value based.
Validating an app idea will also include the unique features that you are providing in your application. For instance, the unique thing about Blue Apron is that they don’t repeat a recipe within the year. Moreover, they also deliver ingredients to their members each week with a recipe card. Thus, providing a complete solution to the users for their daily meal requirements.
Structure of A Food Delivery System
Website
Mobile applications on Android & iOS for customers
Separate app for delivery person
A software for service operators and eateries to carry out authoritative functions
To sum up an on demand delivery services application should allow the customers to place orders via mobile app and website both.
Cost to Develop Subscription Based App
The subscription based app development cost will depend on a range of factors. These factors include the number of features you want in your app, the platforms on which the app will be launched, technologies used for development, average experience of your development team, location of the team and project duration.
The number of features in your application is directly proportional to the cost of your application. Moreover, the cost of iOS development is higher than Android. Moreover, in the case of location of developers - the developers in India charge less as compared to developers from other countries.
Finally, the part of the blog that you’ve been waiting for! The average cost of your subscription app will range from $10,000 to $30,000. Of course, the price range may vary depending on the factors mentioned above.
Conclusion
If you don’t want to invest too much but want to start something with your own brand name and logo, then subscription based food ordering and delivery solution is an ideal choice!
Understanding the revenue and business model is essential to make an app like Blue Apron that is not only loved by the audience but also sustains in the cut throat competition!
Always keep in mind to include the basic features in such an application but also some advanced features not offered by any of your competitors.
Do you have an interesting app idea but don’t know how to make it come to life? Hire Mobile App Developers from Kody Technolab for end to end development solutions. Reach out to our team with queries and they will resolve them as soon as possible!
Sanjay Kidecha
CMO
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