Understanding Fulfillment of Subscription Box Services

According to Forbes, subscription box services like Birchbox, Barkbox and Winebox are “one of the fastest growing trends in the start-up world.” Consumers love them for a variety of reasons.  They are great for gifts because they can be tailored specifically to someone’s personal interest and are the gifts that keep on giving.  Many customers prefer subscription boxes for convenience sake, specifically for products that are repeatedly purchased.  Other subscription boxes contain samples of new products, allowing customers to try different brands that they otherwise might not have access to.   Subscription boxes range in cost from $10 to over a $100, but successful subscription box services offer high value for the monthly fee.  However, the most desired, best value subscription box service will fail if they are unable to manage the logistical demands of the daily operations of the businesses.  Late, broken, or otherwise substandard packages are a disaster for your ecommerce business.  How important is quality fulfillment of your subscription box service?  It could literally make or break you.

Inventory Management

Most merchants do not have the physical space to store products and manage the vast inventory necessary to accommodate an often variable, inconsistent volume of sales.  Many retail businesses, including subscription service boxes, experience intense peaks and valleys during the calendar year.  Fulfillment centers keep accurate counts of available product, by documenting lot control and expiration dates, meaning that subscribers will receive the freshest products on a timely basis.  Partnering with a fulfillment center eliminates many operational difficulties dealing with inventory management for ecommerce merchants, including:

  1.  Overselling

Fulfillment centers allow merchants to have tighter control over inventory management, giving merchants the ability to adjust advertising of items that they no longer have in stock.  Oversells create angry customers, and increases the rate of subscription cancellation.

  1.  Stockouts

Stockouts occur when a product is presented as not available on an ecommerce website, and this situation is a nightmare for merchandisers, if the product is a high-seller.  Customers leave unsatisfied, and loyalty drops.  Fulfillment centers use modern inventory systems that can use a point-of-sale count that will automatically modify inventory levels, lowering the occurrence of stockouts due to shipment discrepancies, misplaced items, or returns.

Assembly of Subscription Service Boxes

Typically, with subscription service boxes, every month requires a new build guide, and merchandisers must ensure that their boxes have brand-designated, high-quality packaging procured at the lowest cost.  Fulfillment centers have the required staff to rapidly assemble orders that require distinct packaging, numerous products, and printed inserts detailing the contents of the subscription service box.  The bundling of products into a single gift box is a tremendous marketing and sales tool.  Fulfillment centers make the process less expensive by assembling presets, and by setting up their order management system to identify multiple items as a single stock keeping unit (SKU).

Shipping Rates

Success in the subscription service boxes industry is directly related to managing shipping costs. Annually, major carriers, including FedEx, UPS, and USPS, increase service rates and surcharges by almost 5%.  Fulfillment centers who ship a high volume of parcels are usually able to get better rates than individual store owners.  Centers can pass on their lower postage rates, and because they perform an exacting analysis of each package’s content, dimensions, weight, destination, and speed, they are able to choose the optimal method for each order.

Fulfillment services trace and track every order from the receiving dock to receipt by the customer.  Fulfillment is both time-consuming and complicated.  When you partner with a fulfillment center, the entire process is more accurate, faster, and less expensive.  So if you are looking for a competitive edge for your ecommerce business, don’t forget the importance of quality fulfillment. For more information, contact our team at Langham Logistics at 855-214-2844.

Be on the Lookout for these Supply Chain Trends

It can be easy to dismiss trends as just that – trends. However, some of the supply chain trends that were just catching on five to ten years ago are now common place, such as the use of digital technology. It’s important to take note because the last thing you want is to not miss a trend that can help bolster productivity and could become vital to all supply chain. Continue reading…

Avoid Confusion with Shipping Rules : Let’s Talk Incoterms

Companies that still use the old contract terms that were used decades ago are not taking advantage of Incoterms and the opportunity they provide to improve your supply chain performance. Incoterms help avoid confusion that’s created by varied and sometimes wrongful interpretations of shipping rules in different countries. By having an understanding of Incoterms, you can minimize confusion and misunderstandings and can alleviate trade disputes and litigation in international shipping. Continue reading…

How you can reap the benefits of the Panama Canal Expansion

“I took the Canal Zone and let Congress debate; and while the debate goes on, the canal does also.” – Theodore Roosevelt  

The Panama Canal is one of the busiest waterways in the world. It sees significant daily shipping traffic; moving 6% of the global commerce, the Panama Canal will continue to expand to allow growth.

The 5.4 billion dollar expansion of the Panama Canal was completed June 26, 2016, and is expected to largely decrease the instances of bottlenecks, lower than average transit times by raising capacity and allow for the transit of Post-Panamax vessels. The expansion is one of the most important infrastructure projects for logistics in over a century.

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The Pro’s and Con’s of Nearshoring

When it comes to outsourcing operations, nearshoring is becoming a better and better option for many companies. With rising labor costs in China and the problem with maintaining quality standards, as well as the desire to reduce transportation. Costs companies have started to reassess their manufacturing and offshoring strategies.

If you are unsure of what the differences are, we can explain. Offshoring involves shifting work to a foreign or distant country and/or company to production costs. Nearshoring, on the other hand, means sourcing manufacturing closer to The United States; to countries like Canada and Mexico. Many other nations in Central and South America like Argentina, Brazil, or El Salvador; and in the Caribbean like the Dominican Republic and the U.S. Virgin Islands are also used.

With offshoring, not offering the same cost benefits it once did, companies are moving production closer to home. According to an article published by Manufacturing Today, “companies like Apple, General Motors, General Electric, Microsoft, Caterpillar, and Ford have recognized that overseas offshoring is no longer the good deal it was, nor does it comport with today’s supply chain demands.”

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The Future Of Logistics, Drones, Robots and More

A new era of logistics is coming. With more advanced technology and additional tech companies breaking into the shipping and logistics sector, we wanted to get a view of what these companies think about the future. From driverless trucks to your personal delivery bot, here are some world-changing innovations on the horizon.

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INDIANAPOLIS–Langham Logistics, an Indianapolis leader in freight transportation management, announced a new addition to their sales team, Joshua Smarrella. Josh will be taking on the role as an Account Executive to grow and support new and existing customer accounts. Continue reading…

The Logistics of Black Friday/Cyber Monday

As a retail company, distribution of goods, and keeping up with orders, especially on holidays like Black Friday and Cyber Monday, should be your only goal. On the heaviest shipping days of the year, your logistic partners must help you establish and maintain a competitive edge. Delivering not only the goods, and products, but delivering profits for your company.

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Hanjin Bankruptcy Update

On Friday, September 2, 2016, South Korea’s Hanjin Shipping Co., filed for bankruptcy protection in the U.S. just days after filing for receivership in South Korea. Hanjin Shipping’s creditors withdrew support after deeming a funding plan drafted by the parent company, Hanjin Group, was inadequate.
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