Kogan.com added Kogan FIRST, a paid membership with free shipping and member prices, to its low-price online store. For fiscal 2026 (to 30 June 2026), Kogan FIRST and New Zealand's Mighty Ape PRIMATE earned A$61.4 million in loyalty subscription revenue, up 14.3%, equal to about 5.9% of A$1.04 billion in group gross sales. A$11.3 million in fees had been paid in advance.
Key takeaways
- Kogan's loyalty subscription revenue was A$61.4 million in FY26, up 14.3%.
- Members had paid A$11.3 million in advance (deferred income) at 30 June 2026.
- That's equal to about 5.9% of group gross sales of A$1.04 billion, mostly as high-margin fee income.
- Kogan credits the programs with increasing repeat shopping; it doesn't disclose member numbers.
- You don't have to start with a subscription. You can bolt one on later.
Ruslan Kogan's parents arrived in Australia in 1989 with $90 in their pockets.
He grew up in a Housing Commission flat in Melbourne's outer suburbs. At nine he built his first computer. At ten he was collecting lost golf balls, cleaning them and selling them to golfers in egg cartons.
At twenty-three, he started kogan.com in his parents' garage, selling leading consumer brands for less than you'd pay in most stores.
That's a one-off sales business. Low prices, thin margins, every customer won one order at a time.
So why is Kogan in a book about subscriptions?
Because years later it bolted one on. And in 2026 that membership is one of the most interesting numbers in Australian retail.
What the book said in 2022
Kogan was one of my bootstrapper stories in Chapter Ten. Kogan First cost $59 a year and gave members rewards, discounts, free shipping and exclusive deals.
The lesson I drew was simple: you don't have to start with a subscription model. Starting with single sales can build the capital and the customer base you need to add a subscription later. Ruslan took a business with a strong moat (bargain prices on consumer electronics) and made it stronger with recurring revenue.
What's happened since
Kogan now runs two paid loyalty programs: Kogan FIRST in Australia and Mighty Ape PRIMATE in New Zealand. It reports them together.
| Kogan.com, fiscal 2026 (to 30 June 2026) | Figure |
|---|---|
| Loyalty subscription revenue | A$61.4 million, up 14.3% |
| Deferred income (fees paid in advance) at 30 June 2026 | A$11.3 million |
| Group gross sales | A$1,042.3 million, up 12% |
| Adjusted EBITDA | A$41.8 million, up 14% |
| Kogan FIRST alone, first half FY26 | A$30.3 million, up 7.6% |
Kogan credits the programs with "increasing repeat shopping across both platforms." It doesn't disclose member numbers.
Do the math and loyalty subscriptions bring in revenue equal to about 5.9% of group gross sales (A$61.4 million against A$1,042.3 million). And unlike selling a television, most of that is high-margin fee income.
To put it in perspective: loyalty subscription revenue was larger than the group's adjusted EBITDA of A$41.8 million. (That doesn't mean the membership produced all the profit, but it shows how much weight that one line carries.)
Why it worked
Member Benefits on top of e-commerce. Kogan FIRST is Model #1 from Chapter Two, Member Benefits, applied to a store that already had the traffic. The membership didn't need its own marketing engine. It was sold to people who were already shopping.
It changes behavior before the purchase. Once you've paid for free shipping, buying the same thing elsewhere feels like wasting your membership. That's the repeat shopping Kogan points to.
The cash arrives first. A$11.3 million of membership fees was sitting in deferred income at 30 June 2026. That's customers funding the business in advance, which is a lovely position for a retailer that has to buy stock.
It widens the moat. In MOATS terms, low prices are Kogan's Toughness. The membership adds Switching: a reason not to try the next discount site.
What would a membership do to your numbers?
Compare one-off sales with a paid membership, including cash flow and valuation, in the free Subscription vs One-off Profit Calculator.
The accountant's view: what a membership does to your books
This is where I put my BPAG hat on, because the accounting is where many owners get surprised.
Illustrative: a 500-member annual membership
Say an Australian online store sells 500 annual memberships at A$59 including GST. Cash in: A$29,500. GST is one-eleventh, about A$2,682, so the business keeps about A$26,818. That isn't all revenue on day one. Under the revenue recognition rules it's generally earned month by month as the benefits are delivered, about A$2,235 a month. The rest sits as deferred income, the same line Kogan reports. These numbers are illustrative only.
Three things follow:
- Cash flow improves before profit does. Great for buying stock. Dangerous if you spend it as though it's already earned. See subscriptions and cash flow and revenue recognition basics.
- Margin depends on the benefit. Free shipping costs you real money on every order. Price the membership so a typical member's shipping cost is covered, with room left over.
- Recurring fee income can make the business more valuable. Buyers generally pay more for predictable revenue than for one-off sales. See recurring revenue multiples.
GST rules have exceptions, so check the ATO's GST guidance or get advice from a registered tax agent. This is general information as at October 2026.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
When is this the wrong move?
If your customers buy from you once every few years, a paid membership won't pay back for them, and they won't renew. Kogan's programs work because members keep coming back to shop, which is exactly what "repeat shopping" means. A kitchen renovator or a car dealer would struggle with the same model.
And if your margins are already razor-thin, a "free shipping" benefit can eat the fee entirely. Run the numbers with the subscription price calculator first.
What you can steal
- Sell an annual membership, paid upfront. The cash arrives before the purchases.
- Make the headline benefit simple and measurable. Free shipping or member-only prices. One sentence, easy to understand. Our e-commerce subscription guide has more options.
- Report membership revenue separately. In your own management accounts, give membership fees their own line. You'll likely find it's your most profitable revenue.
- Start with one-off sales if you need to. Build the customer base, then add the subscription. That was the book's lesson, and Kogan's results bear it out.
What would your best customers happily pay you every year to get a better deal?
Subscription vs One-off Profit CalculatorSee how switching to subscription changes revenue, cash flow and valuation.Open the free tool →Frequently asked questions
What is Kogan FIRST?
Kogan FIRST is Kogan.com's paid membership in Australia. Members pay a fee for benefits such as free shipping and member-only prices. When the book was written it cost $59 a year and included rewards, discounts, free shipping and exclusive deals. Kogan's New Zealand business, Mighty Ape, runs a similar program called PRIMATE.
How much revenue does Kogan First make?
Kogan reports its two loyalty programs together. In fiscal 2026 (to 30 June 2026) loyalty subscription revenue was A$61.4 million, up 14.3%. In the first half of FY26, Kogan FIRST alone earned A$30.3 million, up 7.6%. Kogan doesn't disclose how many members it has.
What is deferred income in a membership business?
When a member pays an annual fee upfront, you've received the cash but haven't yet delivered the year of benefits. Under accounting standards that unearned portion sits on the balance sheet as deferred income and is recognized as revenue over the membership period. Kogan had A$11.3 million of it at 30 June 2026.
Do I charge GST on a membership fee in Australia?
If your business is registered for GST and the membership is for supplies made in Australia, the fee is generally a taxable supply, so GST applies. If you quote prices GST-inclusive, one-eleventh of the fee is GST. Rules differ for some situations, so check the ATO's guidance or speak to a registered tax agent.
Should a small retailer charge for membership or keep it free?
A free program rewards customers after they spend. A paid one gets cash upfront and gives members a reason to concentrate their buying with you. If you have regular customers and a benefit they clearly value, such as free delivery, test a paid tier. Keep a free option for occasional shoppers.
Get both books free
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Kogan.com, FY26 results announcement (24 Aug 2026)
- AFR company announcements, Kogan.com FY26 (24 Aug 2026)
- Investing.com, Kogan 1H FY26 slides (Feb 2026)
- Australian Taxation Office, GST
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.