Shopping isn’t what it used to be! Today, rather than head out to the story, many are choosing to bring the store to them.
While some people shop as needed through online retailers like Amazon Prime, others have signed up for subscription-based services. This means regularly receiving items such as boxed meals, health and beauty products, and more on a fixed schedule. In fact, a recent survey found that 25% of consumers have subscribed to a subscription box service, and another 32% plan to within the next six months.
Top 10 Benefits of Outsourcing Subscription Box Fulfillment
While the subscription box industry is booming, fulfillment can be a burden for some companies. That’s why many are turning to fulfillment centers, also known as third-party logistics (3PL) partners, to take care of it for them. Here are the top ten benefits of using a 3PL partner for your subscription box company.
1. Make More Space
This one’s a no-brainer, so let’s start here! When you’re performing DIY fulfillment, you’re using your own space, whether it’s a garage, attic, basement, or second bedroom. Not only is this often inconvenient for everyday life, it can lead to disorganization – which can lead to inaccurate order fulfillment and lost productivity.
Outsourcing shipping to a subscription box fulfillment company gives you back your space and a sense of organization.
2. Save Time
Let’s face it, you have better things to be doing with your time than packing boxes. All that time spent wrapping and shipping goods could be spent doing things that actually grow your businesses, such as marketing, new product development, or customer service. You’re a business owner, not a packer, so leave the job to a 3PL that specializes in it.
3. Improve Scalability
At some point, if it hasn’t already, your business will reach a point where you’re simply unable to keep up with DIY fulfillment compared to your sales volume. The threshold for when it’ll become necessary to outsource varies by business, often based on how much space and labor is on hand. Remember that this is a good thing: It means your business is really taking off!
4. Account for Fluctuating Order Volume
The subscription-based business cycle can have some serious peaks and valleys. For example, you may be packing and shipping the majority of your orders around the first of each month. Why pay for staff and space to accommodate this highest period of activity when it may only be one week out of the month?
By using a 3PL to outsource shipping, you’ll have access to a scalable, shared-space environment in which you only pay for what you use. So, you’ll be able to meet those peak requirements without wasting money during the valleys.
5. Get Cheaper Shipping Costs
Sending out your subscription packages each month can cost a fortune if you’re handling it on your own. Good news: An experienced fulfillment center can get you better rates! You can put those savings directly to your bottom line, or offer lower prices to customers to improve your competitive advantage.
Additionally, some fulfillment centers have multiple warehouse locations. This means that you can place your product closer to customers to cut down on cost (the fewer zones the package travels, the cheaper the rate) and transit time.
6. Generate Social Media Buzz
Most subscription box companies want their product arriving at all their customers’ doorsteps at about the same time each month or week. This can generate buzz on social media as people post unboxing videos (A study by Google revealed 1 in 5 consumers have watched an unboxing video; in 2017, the term alone had 60 million searches and 3 billion views on YouTube!).
However, if your deliveries are staggered, some customers will feel jipped by the experience. A knowledgeable 3PL knows how to strategically process orders based on customer location to synchronize deliveries.
7. Avoid Service Errors
When you’re trying to manage everything, it’s not uncommon to make mistakes, such as inventory issues, inaccurate orders, and delivery delays. Subscription shoppers have high expectations that their product(s) will arrive on time and be correct, each and every month.
Too many letdowns could lose you the customer (and make you take a beating on social media). Fulfillment centers, on the other hand, are designed for speed and efficiency, operating like a well-oiled machine so that you never let down a customer.
8. Reduce Your Overhead
Packing isn’t just a pain, it’s an overhead creator. Fulfilling orders in house not only requires storage space and staff, but supplies—lots of them. We’re talking boxes, bubble wrap, tape, styrofoam peanuts, and shipping labels. A fulfillment center gets all these items in bulk, and passes the savings on to their customers.
9. Manage Returns Better
Returns are a fact of life for any subscription-based business (and some businesses even count on them, such as FreshNeck, which ships ties that can be worn for as little or as long as the customer wants, then returned). With a 3PL, returns are managed for you, analytics about the returns are provided, and boxes can even be repurposed!
10. Leverage The 3PL’s Technology
Visibility and inventory management are critical for any businesses, but effective technology solutions come at a cost. A reputable fulfillment center will have access to some of the most high-tech systems (with staff that knows how to operate them).
They’ll be able to capture key data points, such as order tracking and intake quantities, which enables you to better communicate with your subscribers regarding their shipments.
Contact The Fulfillment Lab Today
Many subscription box companies operate with slim profit margins, and using a fulfillment center can help improve those margins. Even if it seems like an unnecessary expense at first, in time, using a fulfillment center will pay off in spades.
To learn more about The Fulfillment Lab and our custom subscription boxes that bring together marketing and fulfillment at scale, visit us online or contact us today to discuss our subscription fulfillment services and fulfillment costs.