Subscription boxes are booming! As one of the fastest-growing segments of e-commerce, the global subscription box market is projected to grow 18.3% over the next five years.
A seamless subscription box fulfillment process is critical to a quality customer experience. Here’s what online retailers need to know about subscription box fulfillment in 2022, including:
- How subscription box fulfillment differs from traditional e-commerce fulfillment.
- Common challenges of subscription box fulfillment.
- Tips and best practices for subscription box fulfillment.
How Subscription Box Fulfillment Differs from Traditional E-Commerce Fulfillment
While both fulfillment processes involve packing and shipping products from an e-commerce business to their customers, subscription box fulfillment differs because those shipments are sent on a regular, predetermined basis–every month or every quarter, for example.
Subscription box fulfillment follows the same general steps as regular fulfillment–but with a twist:
Keep in mind that subscription boxes don’t ship on the same day every month to every subscriber. Shipments recur based on when the first order was placed. You might have 25 go out on a Monday, 30 on Tuesday, 15 on a Wednesday and so on. During the following week, the numbers may be completely different.
Common Challenges for Subscription Box Fulfillment
While early subscription boxes sent every subscriber the same set of beauty products or sports items, new models provide much more personalization. Subscribers want to be able to select everything from their correct sock size to the shade of their makeup foundation.
In order to let customers tailor their boxes to their own needs and tastes, subscription box businesses must cover three important bases:
- A website that allows subscribers to select sizes, colors and other options for certain items.
- Adequate storage for more than one version of each product.
- Accurate pick and pack process, so that customers receive exactly what they ordered.
Presentation is as important as variety. Again, this has evolved as subscription boxes have become more competitive. And it’s not just subscribers who expect to be wowed by the presentation…
Influencers are opening and unpacking boxes on social media for potential subscribers to see.
Also, subscription boxes are getting more editorial coverage in magazines. When you send an editor a sample box hoping for a write-up, first impressions are critical.
Warehousing and Shipping Expenses
A substantial amount of space is required for subscription box businesses. You need space for all the items in the current box as well as inventory for future boxes. Don’t forget the amount of space the boxes themselves take up. Plus, you have to consider all the marketing materials such as ingredient lists, coupons and instructions that go into the boxes.
Shipping expenses are another issue. Many subscription box companies operate on fairly slim profit margins without a ton of wiggle room. High shipping costs can increase shopping cart abandonment rates.
There are multiple factors that influence shipping delays, including but no limited, to:
- Increase in online ordering during the pandemic.
- COVID illness and restrictions affecting available manpower.
- Port congestion and closures.
- Labor shortages.
- Troubles with trucking related to staffing, repairs and parts.
- Port of entry slowdowns.
- Weather events.
These delays not only make it hard to get your products from various manufacturers on time, but they also make it difficult to ensure subscribers receive their monthly or quarterly deliveries as scheduled, too.
Fortunately, If you can develop solutions to clear these obstacles, you’ll be able to remain viable in a highly competitive area of e-commerce. Even better, you’ll set your business up to be more profitable and scalable when the time is right.
Trends, Tips and Best Practices for Subscription Box Fulfillment
There are steps you can take to help your online business optimize the fulfillment process over time, such as:
- Don’t price your box to compete with other subscription services. Set a price model based on the quality and quantity of your products, and what you need to make the business viable.
- When setting your price, be thorough in calculating overhead, cost of customer acquisition, and shipping (see more below).
- Maximize profitability per customer and know your churn rate. Consider following the streaming entertainment model of offering a small discount for one annual payment versus monthly charges that make it too easy for payments to fail or customers to cancel. According to one McKinsey & Company report, while customers do cancel for poor service or low-quality products, they also cut their subscriptions when items pile up unused or when they can’t customize their selection as they’d like.
- Collaborate with influencers to promote your box, especially on highly visual social media channels.
- Unless you’re doing a very small volume of business, handling everything in-house can quickly become overwhelming. Instead, outsource your subscription box fulfillment to an experienced fulfillment partner that can handle everything from the moment a customer places their order to the moment their items are delivered. A fulfillment partner has the processes, space, automation, equipment, technology, consistency and quality assurance measures in place to ensure a seamless fulfillment process. They will likely be able to reduce costs and expedite delivery times, as well.
Partner with the Subscription Box Fulfillment Experts at GLF
For 20 years, GLF has provided best-in-class e-commerce fulfillment solutions for online retailers across the country. As an all-in-one fulfillment partner, we can handle every aspect of the fulfillment process, including:
- Integration with your website or third-party storefront.
- Receiving and warehousing of inventory.
- Inventory management.
- Picking and packing of products, including box variations for size, color, etc.
- Kitting and assembly.
- Quality assurance.
- Economical shipping that can be adjusted for delays and rising costs.
- Management of returns, exchanges and customer service.
- Global shipping and returns.
- Customs brokerage and importation solutions.
- High-quality customized marketing print materials.
- Data and reporting.
Learn how we can make your subscription box fulfillment hassle-free, reliable and cost-effective by contacting us today!