Prepaid subscription allows the customer to make a single payment upfront for goods or services that will be delivered on a repeat basis.
For example, $400 paid upfront to receive a monthly subscription box for a whole year (billed annually).
Prepaid subscriptions are great for quarterly and yearly billing.
Prepaid subscriptions typically offer a higher discount to incentivize customer to lock
in the deal.
In this example, we created a subscription group called "Prepaid Coffee Subscription."
We added two subscription plans to the group.
One is an annual subscription, the customer pays upfront for the year and gets a delivery every month. We would set the delivery frequency to every month, and the billing frequency to every year.
For the quarterly prepaid subscription, the customer pays upfront for the quarter and gets a delivery every month.
We would set the delivery frequency to every month, and the billing frequency to every 3 months (which is a quarter).
This is what these prepaid subscription plans would look like when we're all done.
Typical Prepaid Offerings for a Subscription Box
Prepaid 3 months / Monthly Delivery
(delivery every 1 month / billing every 3 months)
Prepaid 6 months / Monthly Delivery
(delivery every 1 month / billing every 6 months)
Prepaid 12 months / Monthly Delivery
(delivery every 1 month / billing every 12months)
How to Tell the Difference between Prepaid Subscriptions & Pay Per Delivery
A Prepaid subscription lets the customer pay upfront for many shipments.
If your delivery frequency does not match your billing frequency, then you have a prepaid subscription.
The opposite of a prepaid subscription plan is a pay-per-delivery subscription plan.
If you delivery frequency does match your billing frequency, then you have a pay-per-delivery subscription plan.
For example: A pay-per-delivery subscription plan could be:
Delivery every week & billing every week
Delivery every month & billing frequency every month
Delivery every quarter & billing every quarter
Delivery every year & billing every year