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22-Feb-2020 19:54

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Subscription models often require or allow the business to gather substantial amounts of information from the customer (such as magazine mailing lists) and this raises issues of privacy.

The commitment to paying for a package may have been more expensive than a single purchase would have been.Thus, a one-time sale of a product can become a recurring sale and can build brand loyalty.Membership fees to some types of organizations, such as trade unions, are also known as subscriptions.A customer who is placed in a jail or prison can be billed continuously for subscription services which may render them without funds upon release.

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Because customers may not need or want all the items received, this can lead to waste and an adverse effect on the environment, depending on the products.

Not only does this greatly reduce uncertainty and the riskiness of the enterprise, but it often provides payment in advance (as with magazines, concert tickets), while allowing customers to become greatly attached to using the service and, therefore, more likely to extend by signing an agreement for the next period close to when the current agreement expires. In integrated software solutions, for example, the subscription pricing structure is designed so that the revenue stream from the recurring subscriptions is considerably greater than the revenue from simple one-time purchases.

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