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Table of Contents
More Fulfillment Content
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Get the latest e-commerce industry news, best practices, and product updates!
Table of Contents
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More Fulfillment Content
Get the latest e-commerce industry news, best practices, and product updates!
Subscription box fulfillment is a hot trend in e-commerce, with a booming subscription box industry worth billions. Read to learn more!
Subscription box fulfillment services have become an essential part of today’s e-commerce. A subscription box is an assortment of products packed and shipped to customers regularly, typically every month, annually, or half-yearly.
Since customers expect their subscription boxes at a set time, it is essential that e-commerce businesses ensure fast and reliable shipping and delivery. Now, this is where subscription box fulfillment services come into play.
Dive in to know all about subscription box fulfillment and how it’s transforming the online shopping space.
Even though this is an integral part of the process before shipment and delivery, often you cannot see it unless you regularly check your order status. But if you do see it against your order, what does it mean? In this article, we will talk about ‘awaiting fulfillment’ and other fulfillment and shipping related terms that will make you understand the process of e-commerce order deliveries better.
What are Subscription Box Services?
A subscription box is a selection of products packaged in a box, shipped, and delivered to customers regularly, generally every month.
It is a form of product kitting, where individual and related products are packed and shipped together as a single bundle.
While the specifics of subscription box services vary across industries, they work in similar ways and share some common features.
For instance, subscription box deliveries are recurring and typically shipped every month. Naturally, the payment for these deliveries is also recurring, one of the main reasons e-commerce businesses expand into the subscription box market. Another commonality of subscription box services across industries is that the boxes are often curated around a central theme that connects the products. It also helps businesses grow, especially B2B businesses that wish to enter the direct-to-consumer market. For example, a beauty brand can sell wholesale to salons and retail to individual consumers.
What is Subscription Fulfillment?
Subscription fulfillment is the shipping of product packages from an e-commerce business to customers on a regular basis. While these shipments can comprise the same products each month, they may also include a different assortment of products each time.
While there can be an unlimited type of subscription boxes, some of the most popular subscription box fulfillment services include:
Curated Subscription Boxes
A popular e-commerce subscription, curated boxes deliver a surprise to customers each month, such as samples of beauty products, an assortment of books of different genres, or clothing collections. Curated subscription boxes are flexible, allowing e-commerce merchants to source products based on price and availability.
Subscribe and Save
In the subscribe and save model, customers usually pay a membership fee to get exclusive access to special deals, discounts, and free standard shipping. Merchants can offer discounts on random orders and fulfill them through traditional order fulfillment services. For instance, Amazon’s ‘subscribe and save’ feature offers product discounts to customers who sign up for recurring deliveries.
Replenishment Subscription
Also known as auto-ship, replenishment subscription mainly works for staples and consumable products such as pet products, dairy products, diapers, coffee, and snacks. The model serves both customers and e-commerce businesses; while customers can conveniently stock up on daily essentials, e-commerce businesses can reduce competition by locking in repeat orders from customers.
Subscription Box Fulfillment Process
So, how does the subscription box fulfillment process work
If you outsource your subscription box fulfillment operations to a 3PL fulfillment service provider, here are the steps your subscription order will go through before reaching the customer.
Receiving the Subscription Inventory
If you have hired a 3PL fulfillment service provider, you will need to deliver the subscription inventory to their warehouse. Subscription box inventory management is a crucial step. If you want to provide a top-notch customer experience, you must ensure that the subscription inventory reaches the 3PL provider’s warehouse on time to avoid shipping and delivery delays.
Sharing Subscription Order Details
Next, you will need to share the order details with your 3PL provider. You can do this by manually uploading order details on a spreadsheet or using an online order management system (OMS) for better integration and automation.
Picking, Packing, and Knitting Products
Once the fulfillment company receives the order details, the warehouse staff locates and picks the ordered products from the fulfillment center. Once all the products in a subscription order are collected, they are packed in a standard or custom box with appropriate order information and are ready for shipping.
Shipping Subscription Boxes
Once subscription box assembly is done, it is ready to be shipped and delivered to the end customer. Most 3PL fulfillment companies acquire shipping labels from shipping carriers on behalf of the online seller. The shipping carrier will depend on the 3PL company’s network as well as the seller and customer requirements. In addition, 3PL companies typically compare the shipping costs of different carriers to ensure the most affordable shipping option.
Once the 3PL company ships the products to customers, both the online seller and their customer receive package tracking information for real-time shipment monitoring.
Customizing Your Subscription Box
Customers today prefer everything personalized. Online sellers can enhance customer experience by customizing the subscription box to fit every demographic and niche. It’s a win-win situation for customers and businesses alike, since it’s a great way to build brand recognition by integrating the company’s branding elements into the packaging.
Regardless of what items you put inside a subscription box, the box is the first thing a customer sees when receiving the product. Since it’s a key branding and marketing element, you need to add something extra to create the perfect unboxing experience for your customers.
While 3PLs provide different customization options, designing the subscription box yourself ensures that it is an authentic representation of your brand.
Here are some points you must keep in mind before creating your custom subscription box:
- When deciding what products to include in your subscription box, consider your target audience’s incentive to sign up for a subscription service.
- Choose the packaging type of the box, such as mailer boxes, padded/bubble mailers, rigid envelopes, or custom mailers. Another key consideration is the packaging material and the size of the box.
- Think about how you want your subscription box designed. Digital prints are widely popular, but you can choose other options that best highlight your brand elements.
- Most importantly, you must consider the overall costs of customizing your subscription box and fulfilling subscription orders. Standard expenses include box, packing materials, products, and fulfillment costs.
The Challenges of Subscription Box Fulfillment
Like traditional e-commerce fulfillment services, subscription box orders are placed online while processing and shipping are from a fulfillment center. However, subscription box fulfillment services have inherent challenges that traditional e-commerce do not usually have.
Here are some significant hurdles in subscription box fulfillment:
Inventory Management
Subscription box inventory management is a challenge because fulfillment operations typically face a spike in orders once a month. Thus, fulfillment companies must ensure that they receive products in advance to prevent shipping delays.
Labor Management
The periodic uptick in subscription orders means a rise in labor demand for the picking, assembly, kitting, packing, labeling, and shipping packages. While many companies hire extra labor to manage the spike and reduce staff after the rush is over, the lack of robust human resources is unsustainable in the long run.
Timely Shipping
Subscription customers expect to receive their subscription box deliveries at the same time every month. Thus, shipping subscription orders on time is vital to meet customer expectations and deliver an excellent subscription experience. Achieving timely shipping is quite a feat, given labor and inventory considerations.
Quality Control
A subscription order box is unlike any regular shipment; it is a meticulously curated box requiring special attention. As good as it sounds, maintaining the quality of every product in the subscription box becomes a significant challenge for e-commerce businesses.
How 3PLs Can Address Subscription Box Fulfillment Challenges
3PL logistics companies with the right expertise and infrastructure are the solution to optimizing and streamlining subscription box fulfillment.
Here’s how 3PLs address subscription box fulfillment challenges:
Extensive Warehouse Networks
Most 3PLs have a network of fulfillment warehouses, often spread throughout a country. Hence, if you have a customer base distributed all over the country, a 3PL can help distribute the inventory to lower shipping costs due to the reduced distance between the warehouse and the end customer.
Efficient Labor Management
Many 3PLs have a nationwide distribution of fulfillment warehouses. Thus, when some warehouses face a spike in orders, a 3PL company can pull labor from other warehouses in the network to reinforce the regular staff. Moreover, 3PLs have a close association with temporary labor agencies in case internal resources fall short.
Robust Inventory Management
With a 3PL, you need not worry about your stocks running low or facing a crisis during peak demand. Most 3PLs invest in a warehouse management system (WMS) that manages every warehouse operation, including inventory management. Moreover, you can integrate your systems with the 3PL’s WMS to monitor inventory and orders.
Reduced Shipping Costs
Since most 3PLs handle large shipping volumes, they can negotiate bulk rate discounts with shipping carriers. As a 3PL customer, you too reap the benefits of the discounted shipping rates. Thus, you can save significantly on shipping costs that have a major effect on your company’s bottom line.
Using a 3PL for Subscription Box Fulfillment: When Should You Outsource Subscription Box Fulfillment to a 3PL
Deciding whether to stick to in-house subscription box fulfillment operations or go for a 3PL provider can be tricky, especially if you are new to subscription box fulfillment.
Starting a subscription box fulfillment service is challenging, with inventory management, labor, shipping, and storage space being some of the key considerations. Even though you start small, your business will soon scale to a point when in-house fulfillment operations fail to keep up with demand. As a result, you will end up focusing more on fulfillment instead of investing your time and resources into business growth.
Using a 3PL fulfillment partner can make subscription box assembly more efficient, ensure timely deliveries, and lower shipping costs. If you are still unsure, here are some signs that you should outsource subscription box fulfillment to a 3PL:
- A growing subscriber base and storage space limitations
- Order management takes up a significant amount of your time
- You are receiving more orders than you can handle
- Slower shipping speeds and poor customer experience
A 3PL fulfillment center can address all these problems, letting you focus your time and energy on growing your business.
In-House Fulfillment for Subscription Boxes: The Pros
While we’ve talked about the challenges of subscription box fulfillment and how outsourcing to a 3PL makes things easier, it is worthwhile to look at the perks of in-house fulfillment.
Keeping fulfillment operations within your internal team is in-house fulfillment, where you are solely responsible for picking, packing, and shipping your subscription box. It can be a great fulfillment option for new companies focusing on building a steady subscriber base.
Here are some benefits of in-house fulfillment for subscription boxes:
- Significant capital savings
- Better quality control to ensure that each subscription box is up to specific standards
- More control over customization with unique branding elements
- Ample scope for experimenting with various packing options
Conclusion
Subscription fulfillment is not entirely a cakewalk. From efficient and customized packaging to ensuring timely delivery, there are several considerations that e-commerce businesses must keep in mind before entering the subscription box business.
While in-house fulfillment may be the best course of action for some brands, others may need to outsource subscription fulfillment to a 3PL to keep up with growing demands.
However, it’s important to realize that the fulfillment strategy you choose depends on the unique needs of your business and your customers. Since subscription boxes are unlike traditional e-commerce orders and have their challenges, it makes sense to reconsider the fulfillment strategy that best serves the purpose.
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FAQs
The subscription box business model is based on the concept of selling products on a regular basis while the customer makes recurring payments to the business. Hence, the model focuses on customer retention rather than customer acquisition.
Subscription boxes are widely popular and successful due to unique features like custom packaging and product curation to deliver a one-of-a-kind experience to customers.
A subscription box is an assortment of niche products packaged in a box, shipped, and delivered to customers on a regular basis, generally every month. It is a kind of product kitting where individual and related products are packed and shipped together as a single bundle.
According to a report by market research firm IMARC Group, the global subscription box industry was valued at 22.7 billion USD in 2021 and is forecasted to reach 65 billion USD by 2027.
While there can be an unlimited type of subscription boxes, some of the most popular subscription box fulfillment services include:
- Curated subscription boxes
- Subscribe and save
- Replenishment subscription