Subscriptions API Explained

Summary

This video provides a comprehensive guide on creating and managing subscription models. It explains how businesses can use subscriptions to handle recurring payments, using examples of a software-as-a-service (SaaS) product and a meal delivery service. The video breaks down subscription plans, variations, and phases, covering aspects such as free trials, billing cycles, and pricing structures (static vs. relative). It also highlights the importance of the catalog and orders APIs in automating subscriptions and processing orders, offering a high-level overview for viewers interested in implementing their own subscription model.

Takeaways

• 💡 Subscriptions allow businesses to accept recurring payments from customers on a regular basis.
• 🎶 For a software-as-a-service (SaaS) product like a music streaming service, subscriptions are set up by creating a subscription plan and subscription plan variations using the Catalog API.
• 🕒 Phases in a subscription define the different billing periods, such as a free trial phase and a main billing phase.
• 📅 Key fields for subscription phases include the ordinal (phase order), cadence (billing frequency), periods (number of billing cycles), and pricing (static or relative).
• 📋 In a SaaS example, a music service may offer a free trial phase for a week followed by a monthly billing phase.
• 🛠️ Subscriptions can be created using the Subscriptions API, connecting the customer to the subscription plan and plan variation.
• 💳 Customers can be billed via invoice or directly if their card is stored on file.
• 🍽️ For businesses processing physical orders, like a meal delivery service, pricing is relative and depends on customer meal selections.
• 📦 Order templates are created using the Orders API to handle specific items chosen by the customer in a subscription.
• 🔄 Subscriptions are flexible and can be tailored to different business models, offering powerful tools for recurring billing.

Q & A

What is a subscription and how does it function?

A subscription is a payment model that allows businesses to accept recurring payments from customers on a regular basis, such as monthly or weekly. The way subscriptions are managed depends on the business model.

What are the key components of setting up a subscription for a SaaS (Software as a Service) product?

For a SaaS product, the key components include creating a subscription plan and a subscription plan variation. The plan describes what is being sold (e.g., music membership), and the variation defines how it's sold, using phases that represent different billing periods.

What are phases in a subscription plan variation, and why are they important?

Phases represent different periods within a subscription. They are important because they define the billing structure, such as offering a free trial phase followed by a main billing phase. Each phase has fields like ordinal (position), cadence (billing frequency), periods (billing cycles), and pricing.

How can pricing be set for different phases in a subscription?

Pricing can be either static or relative. Static pricing means the same cost is charged every billing cycle, while relative pricing changes based on factors such as customer choices, as in a meal delivery service where the cost depends on the selected meals.

What is the purpose of the 'Cadence' field in a subscription phase?

The 'Cadence' field indicates how often a customer is billed within a particular phase. For example, it could be set to monthly or weekly billing.

How are customers subscribed to a plan using the Subscriptions API?

Customers are subscribed to a plan by creating a subscription through the Subscriptions API. This requires passing the IDs of the subscription plan variation, customer, and location, connecting the customer to the subscription plan and billing structure.

What options are available for charging customers once they are subscribed?

By default, customers are billed through invoices sent via email. However, businesses can opt to directly charge a customer's stored credit card if they have one on file.

How does the setup differ for a meal delivery service compared to a SaaS product?

In a meal delivery service, the pricing is relative because it depends on the meals the customer selects. An order template is created using the Orders API, and when a subscription is created, an order for those meals is also generated.

Why would you use a relative pricing model instead of static pricing?

Relative pricing is used when the final cost depends on customer choices that vary, such as in a meal delivery service where customers may select different meals each week, leading to different prices.

What additional tools or APIs are needed for setting up a subscription in a meal delivery business?

In addition to the Subscriptions API, an order template needs to be created using the Orders API to include the specific items (meals) selected by the customer. The order template is linked to the subscription plan variation.