There’s a subscription box for everything these days. Whether it’s beauty products, dog toys, or the Meat of the Month Club, subscription boxes are big business. If your company currently curates a subscription box, or is considering it, you need to ask yourself if you want to handle the logistics in-house or outsource to a 3PL. Here are a few things to consider when making your decision:
Unlike normal e-commerce transactions where customers place orders and have them shipped, subscriptions boxes are a totally different beast. With exception to new orders, boxes will go out during the same shipping window. The good news—the boxes are usually the same (though some boxes are starting to give customization options); the bad news—thousands to hundreds of thousands of boxes go out during the same timeframe. You need to ensure you can handle the influx of work during this specific time (usually a particular week of the month) to ensure customer satisfaction.
Staffing Situations and Overhead
When companies consider fulfilling subscription boxes in-house, they often focus on staffing the labor. What they don’t anticipate is all of the additional paperwork like 1099s and timesheets that need to be entered, filed, and stored for up to seven years. Also, as business grows, can you accommodate your needs with the current staff or will you need to hire more? You will also need a warehouse or location for employees to work, liability insurance, and office furniture and supplies. You will also have to ask yourself will you be able to expand if you need to or will you have to finish out your lease and then move to a new location. 3PLs will handle all of this for you, in addition to having the flexibility to expand or contract as needed, and will often save you money in the process.
Creating Best Practices
When it comes to best practices, it’s hard to top a 3PL. They are quality control masters and know exactly what Key Performance Indicators (KPIs) to track and compare against industry metrics. They also have the experience to hit the ground running without the inevitable learning curve in-house operations will need. 3PLs also offer accountability and best-in-class transparency which are critical to growing your business fast.
Are your finishing touches like stickers, cards, and pretty ribbons consistent? Have you considered how to add all of your brand highlights in the most efficient way? A 3PL can help companies keep their brand image while reducing the number of touches needed to accomplish it. Less touches not only means saved time but often less opportunity for error.
There are several other things to consider when deciding whether or not you should keep your subscription box fulfillment in-house or outsource it such as negotiated shipping rates, return turn-overs, and forecasting to name a few. Subscriptions boxes are an intricate business that requires high-level detail in tracking costs and metrics. Companies that figure it out, like Dollar Shave Club and Birchbox, have become big dollar earners, and here’s a hint—they used 3PLs.