Coffee Subscription Offers: Cycle Pricing

A roaster has an advantage most subscription sellers do not: the product runs out on a schedule. A bag of beans is gone in days or weeks, and the customer has to buy again. That makes a coffee subscription easy to sell and easy to price badly. The decisions that matter are how often the box should arrive, what the first bag costs, what later bags cost, and what you are willing to promise about freshness. This page works through them for a small roaster on Shopify, with the cadence and the prices both calculated from stated assumptions.

Cadence comes first

Price is the visible choice, but delivery interval is the one that decides whether a subscriber stays. Deliveries that come too slowly leave the customer without coffee, and they buy a bag from a shop or a competitor. Deliveries that come too fast leave beans in the cupboard, and the customer pauses or cancels. The right interval follows from two numbers, the size of the bag and what the household uses, and both can be stated.

Assume a bag of 12 ounces, which is about 340 grams, and a 2 pound bag, which is about 907 grams. Assume a cup uses 15 grams. The table counts how many weeks a bag lasts.

The calculation is the bag weight divided by seven days of use. These are assumptions about dose and habit, not survey findings. Your own brew ratio and your customers' habits will move every number, so use the table to see the shape. A 12 ounce bag sent every four weeks does not fit a two-cup-a-day drinker, who is out after 11 days. The same drinker fits a 2 pound bag every four weeks: it lasts about 30 days, so the next one arrives with a couple of days of coffee left. The practical rule is to sell the interval that is slightly shorter than the time the bag lasts, and to let the customer choose quantity (two bags) before they choose a faster interval.

Shopify's Help Center says the Shopify Subscriptions app can create auto-billed subscriptions that renew weekly, monthly or yearly. The Help Center's subscriptions page gives "monthly, weekly, or daily" as examples of frequencies. Check which intervals your own app offers before you build a bag size around one.

First-bag price or cycle pricing

The next decision is whether to discount the first bag, every bag, or neither. Assume a 12 ounce bag that sells for 18 dollars. The coffee, bag, label and roasting cost 7 dollars, and packing and postage cost 5.50 dollars, so each delivery costs 12.50 dollars and earns 5.50 dollars at full price. The table gives the contribution per subscriber over three stay lengths. The stay lengths are assumptions.

All figures are dollars of contribution per subscriber, before payment fees. Postage is inside the 5.50 dollar packing-and-postage line here; if you also want to waive shipping on later bags, Free Shipping for Subscriptions: Box 1, Then? compares the policies. Read it across. The first-bag discount costs 2.70 dollars once. A discount on every bag costs 1.80 dollars on every delivery, so by the twelfth bag it has given back 21.60 dollars. The last row starts the discount deeper and ends with a small standing discount. It gives back 13.50 dollars over 12 deliveries compared with no discount, against 2.70 for the first-bag-only option and 21.60 for the flat one.

A first-bag discount works when people stay. If a subscriber leaves after the first bag, the first-bag row earns 2.80 dollars against 5.50 at full price, so the offer needs enough subscribers who stay past the second bag. Lifetime value on contribution, not on revenue, is the measure; Customer Lifetime Value on Shopify, Plainly covers the method and a different table on a different product, so use whichever fits your numbers.

Skip and pause as retention tools

A subscriber who is going to leave often does so because the box arrived when they had enough. Letting them skip a delivery is a cheaper answer than losing them. What your store can offer depends on the subscription app you use. Shopify's Help Center describes the Shopify Subscriptions app as letting merchants modify, skip, pause and cancel plans and contracts, and customers resume, skip or cancel from their customer account. The same page does not say customers can pause. Other apps differ, so this page names none; ask whichever app you pick for the exact customer controls, and put the same words in your own help page.

Gift subscriptions and holiday gift bags

Gifts raise a question that a standard plan does not: who pays, and who receives. Shopify's documentation we read does not describe a gift subscription feature, so treat it as a question for your app. Ask whether a plan can end after a set number of deliveries and whether the shipping address can differ from the payer's, then place a test order to confirm.

Holiday gift bags have a separate constraint. Shopify's Help Center says bundles are not compatible with purchase options, which it lists as subscriptions, pre-orders and try-before-you-buy, and not compatible with the Shopify Subscriptions app. A gift set built as a native bundle therefore cannot also be a subscription. Sell it as a one-time set, and keep the subscription as a separate product. Holiday Gift Sets That Don't Eat Your Singles covers how to keep a set from taking sales from your single bags.

Freshness copy that you can prove

Freshness is the claim coffee buyers care about and the easiest one to overstate. Write only what you can show. A roast date printed on the bag is a fact. A sentence such as "roasted within 48 hours of shipping" is a promise, and it is only honest if your schedule holds it. Say what you can measure: the day you roast and the day you ship. If your roasting happens on Tuesdays and Thursdays, say that in the subscription description. If a delivery could go out later than the usual day, say so in the confirmation email. Avoid adjectives such as "the freshest" that no measurement supports.

Setting up cycle pricing

Shopify's Help Center says you can add a subscription as a purchase option to sell products on a recurring basis, and describes managing subscriptions through the free Shopify Subscriptions app or a third-party app. In Freebies Engine by Log Studio Lab, the Subscription cycle pricing template is described as different prices for each delivery of a subscription. Pick the row in the table whose stay length you believe, then set the first-bag price and the later price from it. The Seattle page sets out a cycle pricing plan for a refill subscription, which is useful to read next to this one.

Before launch, check three things: the interval fits the bag size you sell, the first-bag discount appears on the product page in the same words as in the subscription, and you can read each cohort's retention after a quarter. Plan requirements for the template are on the pricing page.