You've got a 28 day formula, a manufacturer who can turn it round, and a pricing question you keep circling: what do I charge for a supplement subscription where the margin maths actually works? I get asked some version of this every week, usually by a founder who has priced the box like a product and forgotten it is a contract. Here's the direct answer, built on the illustrative example below. For a box with that cost stack, price the 28 day cycle at £29.99 including VAT. You keep £24.99 before costs, your variable costs run to about £12.15, and you're left with £12.84 of contribution per box. That number, not your gross margin percentage, is what pays for the customer you bought.
Here's the Short Version
- Price subscriptions backwards from contribution per box, the money left after the full variable cost stack, not from your gross margin on the jar
- Thirteen complete 28 day cycles cover 364 days, so the subscription bills 13 times a year against 12 for a calendar month. At £29.99 a cycle that is £389.87 a year per subscriber, a whole extra box of revenue most founders never model
- Food supplements are standard rated for VAT at 20%, unlike most food. If you are registered, £29.99 including VAT means £5.00 goes to HMRC and £24.99 is yours before costs
- On the illustrative cost stack below, £29.99 a cycle leaves £12.84 contribution, about 51% of the ex VAT price. A £50 acquisition cost then pays back in just under four boxes
- Cut the price to £24.99 and the contribution drops to £8.76, a 17% price cut that costs you 32% of your contribution. The discount is always bigger than it looks
- Take a year's money up front and it is not all revenue on day one. Each box becomes revenue when the customer takes control of it, normally on delivery, and the rest sits on the balance sheet as deferred income
Everything below uses one illustrative example with synthetic planning numbers, not any client's books and not quotes from any supplier. Your formula costs, your postage and your fees will differ. The method is the point, so steal the method and swap in your own figures.
Start With the Number You Keep
Founders price subscriptions by looking at their product margin and it quietly ruins them, because product margin ignores everything that happens after the jar leaves your shelf. The price that works is the one where a fixed amount survives after every variable cost: the formula, the pouch, the packaging, the postage, the payment fees and the subscription software. That survivor is your contribution per box, and it is the only number that can pay back the money you spent acquiring the subscriber.
Here's a benchmark from the illustrative model below. At £29.99 a cycle you keep £12.84 per box, which is about 51% of the ex VAT price. Spend £50 acquiring a subscriber and you pay that back in 3.9 boxes, roughly 110 days. Spend £80 because your ads tightened and your creators got pricier, and payback stretches to 6.2 boxes, the guts of six months. Now look at what happens on the other side of the ledger. If your average subscriber quits after four boxes, a £50 acquisition cost leaves you £1.36 of lifetime profit per customer. You have built a business that works like a job. The margin maths only starts working when contribution per box is high enough that payback lands well before your average subscriber leaves.
The practical rule that falls out of this model: keep contribution per box at £10 to £13 at your expected churn, and treat £8 as the warning line. Under that line you are renting subscribers, not owning customers. Your own floor depends on your acquisition cost and retention, so run the same maths with your real numbers before you commit.
The Cost Stack of One Box
Before you can price the cycle you have to cost the box honestly, and honest means every variable cost, not just the powder. Here is the illustrative stack for a 28 day pouch of a standard supplement, synthetic planning numbers built for this example. Your quotes will differ, so treat the lines as a template and replace them with your real ones.
| Cost line per 28 day box | Amount | Notes |
|---|---|---|
| Formula, pouch and desiccant | £6.50 | The product itself, bought at volume |
| Outer carton, inserts and label | £0.90 | Printed packaging and the leaflet |
| Fulfilment and postage | £3.60 | Pick, pack and a tracked delivery |
| Payment processing | £0.65 | Assumed 1.5% plus 20p per charge, a typical UK online card rate |
| Subscription software | £0.50 | Assumed per active subscriber per cycle; apps price differently |
| Total variable cost | £12.15 | Every cost that moves with a box shipped |
Read that table the way a subscription buyer would. The formula is barely more than half the cost stack. Postage, payment fees and software eat nearly £4.75 of every box before you have paid for a single gram of marketing, and those are the lines founders forget when they price against a competitor's headline jar price. Fulfilment and payment fees are selling costs, not product costs, so never bury them in your inventory value or your gross margin will flatter you all the way to a loss.
Two of those lines are assumptions and they will move. Payment processing sits at a typical UK online card rate of 1.5% plus 20p a charge in this model, and subscription apps charge in different ways, some a percentage of revenue, some a flat fee per subscriber. The shape survives either way: a £6.50 product costs you £12.15 by the time it is in the customer's hands, and the pricing has to be built on the £12.15, not the £6.50.
The 28-Day Calendar: Thirteen Bills a Year
Here is the scheduling trap hiding inside the words "monthly subscription". A 28 day cycle is not a month. Thirteen complete cycles cover 364 days, so a cycle based subscription produces 13 charges a year against 12 for a calendar month. In any particular calendar year the charge dates can number 13 or 14 depending on where the cycle falls, which is why the mapping below matters. Charge £29.99 per calendar month and a subscriber gives you £359.88 a year. Charge £29.99 per 28 day cycle and the same subscriber gives you £389.87. Same price, one extra bill, £29.99 more per subscriber per year, on every subscriber who stays.
That extra cycle matters twice. First in the pricing, because if you built your plan on 12 bills and the subscription bills 13, the cash lands ahead of forecast. Second in the accounting, because 13 or 14 charge dates do not divide neatly into quarters. One VAT quarter can carry four charges while another carries three, so a subscription brand that reconciles by "four boxes a quarter" will be wrong for three quarters out of four.
Lay the charge dates on a calendar for a full 12 months before you commit to the price. If a charge lands on New Year's Day and the card fails on a holiday weekend, you want to know that in planning, not in a January phone call.
Discounting Is Where the Maths Dies
Subscription pricing gets wrecked in one place: the first box discount. Here is the arithmetic. At £29.99 a cycle the contribution is £12.84. Sell the first box at £14.99, near enough half price, and the contribution on that box falls to 57p, because the cost stack barely moves. The discount has handed the customer £12.27 of your margin and added the equivalent of nearly a full extra cycle to your payback. If your acquisition cost is £50, payback stretches from 3.9 boxes to roughly 4.9, and every subscriber who takes the cheap first box and leaves before box three was bought at a loss.
I am not against discounts. I am against discounts that arrive before the customer has proved they will stay. A 15% off the first box offer gives away £4.50 of the price and about £3.70 of contribution, once. A "half price forever" offer, which is what many 50% off codes quietly become when nobody cancels them, costs £12.27 a box in lost contribution for as long as the subscriber stays, and at workable retention that is about £74 of margin gone per subscriber. If you run one, run it fixed term with an expiry date, and only after the standard price has been tested.
Churn Prices Your Subscription Twice
Here is the sentence most pricing spreadsheets miss: the price decides what you keep per box, and churn decides how many boxes you get. You have to win both arguments or the subscription loses money while it looks healthy.
Worked example, still illustrative, still synthetic. A cohort of 100 new subscribers at £29.99 a cycle, £12.84 contribution per box, acquired at £50 each, so £5,000 of acquisition cost. Retention is the only variable that changes between the rows.
| Retention pattern | Average boxes per subscriber | Contribution per subscriber | Net after £50 acquisition cost |
|---|---|---|---|
| Weak: 60% reach box 2, then 80% stay per box | 4.0 | £51 | £1 |
| Workable: 75% reach box 2, then 85% stay per box | 6.0 | £77 | £27 |
| Strong: 85% reach box 2, then 90% stay per box | 9.5 | £122 | £72 |
Look at the weak row and sit with it. A brand that acquires subscribers at £50, keeps 60% past the first box and loses 20% of the rest every cycle is making about a pound of lifetime profit per customer. Every bit of growth is a treadmill. The fix is rarely a cheaper price, because a price cut subtracts £5 of contribution from every box the customer ever takes. The fix is retention: a welcome flow that gets the subscriber to box two, a product that performs, and a cancel flow that asks one question before it lets them go. Move the weak row to workable and the same price, the same ads, the same product turns £1 per customer into £27.
Payback is fixed by the price and the cost stack: 3.9 boxes at £29.99 with a £50 acquisition cost, whatever your retention. Retention decides what happens after box four, which is where the profit lives. Set the price before you scale the ads; "we will fix churn later" is a promise the accounts always collect.
The Price Ladder That Works
Here is the whole model on one ladder, same cost stack, three prices, and what each one does to the contribution.
| Price per 28 day cycle, VAT included | Ex VAT | Contribution per box | Payback of a £50 acquisition cost |
|---|---|---|---|
| £24.99 | £20.83 | £8.76 | 5.7 boxes, about 160 days |
| £29.99 | £24.99 | £12.84 | 3.9 boxes, about 110 days |
| £34.99 | £29.16 | £16.94 | 3.0 boxes, about 83 days |
The £34.99 row is your one-off price doing double duty as the ceiling. Price the subscription at £29.99 against it and you are offering a genuine 14% discount for commitment while keeping contribution above £12, which is the band where the retention maths above starts working. Price at £24.99 because a competitor does and you are not competing on price, you are donating contribution. Cut the price 17% and you cut the contribution 32%, and no retention programme in the world fixes a contribution that low, because the payback window has already stretched past the point where most subscribers leave.
Test the ladder before you commit. Run the £34.99 one-off with the £29.99 subscription for 60 days and read the conversion and the box two retention, then decide whether the £24.99 tier exists at all. Most brands find the discount tier only exists to make the middle tier look reasonable.
What the Accounts Need to Show
A subscription is an accounting machine as much as a pricing one, and the founders who get the price right still trip on the books. Four things matter.
VAT first. Food supplements are standard rated, and HMRC's own guidance in VAT Notice 701/14 says it plainly: dietary supplements of a kind not normally purchased and used as food are standard rated, which includes vitamin and mineral supplements of all kinds. Most food of a kind used for human consumption is zero rated, but the standard rated exceptions include qualifying dietary supplements, confectionery, ice cream and soft drinks, and founders who assume their product is "just food" underprice by 20% from day one. If you are registered, charge the £29.99 including VAT, account for the £5.00 slice on each charge and keep £24.99 before costs. Registration is compulsory once your taxable turnover goes over £90,000 in a rolling 12 months or is expected to in the next 30 days, and our VAT registration checker shows where you sit. Our post on VAT rules for ecommerce brands growing past the threshold covers the crossing itself.
The VAT point on a subscription charge is the date payment is received, not the date the box ships, as long as no VAT invoice has already created an earlier tax point. The money lands before the box leaves, so the charge date drives the VAT return. Refund a box and the credit note adjusts the output VAT the same way, so process refunds through the same books as the sales, not quietly out of the marketing budget.
Deferred income second. Take a year's money up front and the whole amount is not revenue on day one. Each box becomes revenue when control transfers to the customer, which for a direct to consumer shipment means delivery, and the rest of the cash sits on the balance sheet as a contract liability, often called deferred income, because you owe the customer the goods. Book it all as sales on day one and you report profit you have not earned yet, and pay the tax on it early. Our post on why subscription brands need a different approach to bookkeeping walks through the full machine, and the one on stock and VAT for multi-item subscription boxes covers the inventory side.
Refunds and cancellation third. Under the Consumer Contracts Regulations 2013, an online buyer can cancel for any reason within 14 days of delivery, subject to statutory exceptions, and the exception that matters for supplements is sealed health and hygiene goods: once a customer has unsealed a pouch, the change of mind right for that box is gone. Refund within 14 days of the goods coming back or of proof of return. After that window the subscription runs on its terms, and those terms have to make cancellation as easy as signup. Auto-renewal buried in small print and a cancel button that takes six emails is how you eat chargebacks, complaints and regulator attention, and the CMA has made clear it expects subscription exits to be straightforward. The cost of a hard cancel flow shows up in the accounts as refunds and chargeback fees long before it shows up as reputation.
Cash versus profit fourth. A subscription brand's bank balance is the worst profit measure it has, because a single month can hold two charge dates, and December can stack a VAT bill and a stock order on top of them. Read the monthly management accounts on the accrual basis, revenue as control of each box transfers, costs when they are incurred, and treat the cash balance as a working capital question, not a profit answer. How the whole P&L should be built at scale is the subject of our post on how a 7-figure supplement brand should structure their P&L.
FAQ
How much should I charge for a 28 day supplement subscription?
For a box with the illustrative cost stack above, around £11 to £12 of variable costs, charge £29.99 a cycle including VAT. It leaves £12.84 of contribution per box and pays back a £50 acquisition cost in just under four boxes, and it sits at a sensible 14% discount below a £34.99 one-off price.
Do I charge VAT on a supplement subscription?
Yes, once you are registered. Food supplements are standard rated at 20%, not zero rated like most food, so on a £29.99 cycle you account for £5.00 of VAT and keep £24.99 before costs. Registration becomes compulsory above £90,000 of taxable turnover in a rolling 12 months.
How do I know if my subscription price is actually profitable?
Work backwards from contribution, the ex VAT price minus every variable cost per box, and check it pays back your acquisition cost well before your average subscriber leaves. In this model, below about £8 of contribution per box the payback window stretches past typical retention and every subscriber is bought at a loss.
Can a subscriber cancel and get their money back?
Within 14 days of the box arriving they can cancel for any reason under the Consumer Contracts Regulations 2013, unless they have unsealed a sealed health or hygiene product, which is what a supplement pouch is. You refund within 14 days of the return. After that they can end the subscription on its terms, and the cancellation route has to be straightforward or you will pay for it in chargebacks and complaints.
Is a 28 day subscription the same as a monthly one?
No, and the difference is a whole billing cycle. Thirteen complete 28 day cycles cover 364 days, so at £29.99 a cycle the subscription produces £389.87 per subscriber per year against £359.88 for a calendar month, and the 13 or 14 charge dates in a year mean your quarters will never hold the same number of charges.
The Bottom Line
Pricing a 28 day supplement subscription is a contribution exercise, not a margin exercise. Build the honest cost stack, which in this model is roughly twice the product cost once fulfilment, payments and software are on it. Price the cycle at £29.99 against a £34.99 one-off so the subscription earns its discount with commitment. Keep first box discounts out of the maths until retention has proved itself, and check every price decision against the same test: does contribution per box stay in the £10 to £13 zone this model needs, and does payback land before the average subscriber leaves? The brands that win at subscription pricing do not have better formulas. They have a cost stack they trust, a retention curve they measure and a price that pays for both.
If you'd like us to stress test the numbers behind your subscription, that's what we do. We're specialist social commerce accountants, we work with UK ecommerce brands from £1m to £20m, and we see supplement brands at every stage from first formula to exit. Book a call and we'll show you what your subscription pricing should look like before you spend another pound on ads.