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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.

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