Ecommerce is all about convenience: Customers expect to receive what they want when they want it without having to leave the comfort of their homes.
Online subscription boxes take this convenience to the next level by eliminating the need for customers to shop manually. Instead, subscription boxes automatically deliver products to the customer on a regular basis, such as monthly or quarterly.
Because customers expect to receive their subscription boxes at a set time each month, being able to offer timely and reliable shipping is incredibly important for subscription ecommerce businesses. That’s where subscription box fulfillment comes into play.
What is subscription fulfillment?
Subscription fulfillment refers to the shipping of products from an ecommerce merchant to a customer on a regular, predetermined basis. These shipments can be the same each month, such as razor cartridge refills or deodorant, or a different selection of curated products each time.
Subscription boxes that follow the latter are much more complex and are often best fulfilled in-house, or assembled before shipping to a third-party logistics (3PL) company for distribution. We’ll share more information about each fulfillment process later.
Challenges of fulfilling subscription orders
While subscriptions help make consumers’ lives easier, recurring shipments present their own set of challenges to ecommerce merchants. Here are some of the biggest challenges of subscription box fulfillment.
1. Shipping orders on time
Your subscription customers expect their deliveries at the same time each month or another recurring period — especially if they’re waiting for a refill on a daily necessity! Shipping your subscription orders on time is key to meeting customer expectations and giving them a great subscription experience.
2. Changing products monthly
If you change out the products in your subscription box each month, make sure you’re leaving ample lead time for your manufacturer or supplier to get the products to you or your ecommerce fulfillment provider. Even if your subscriptions are the same month over month, having efficient inventory management will help you keep an eye on your products and avoid stockouts.
3. Maintaining quality control
If your subscription boxes are meticulously assembled works of art, that’s a lot of pressure — whether you fulfill orders in-house or outsource to a fulfillment company. Unlike a shipment that just involves a box, some air fill, and a product or two, curated subscription boxes need special attention.
Should you outsource fulfillment for your subscription orders?
Whether or not outsourcing subscription fulfillment to a 3PL is right for your business comes down to two major factors: the level of kitting and assembly needed and the volume of boxes you’re shipping each month.
Consider the following subscription box examples:
- A monthly refill of razor blade cartridges from a direct-to-consumer brand. The same number of cartridges are sent on the same date each month in a branded box. The box contains a printed insert thanking the customer for their purchase.
- A curated monthly selection of handmade jewelry. Each customer receives a different combination of items depending on their preferences, such as gold vs. silver or dainty vs. bold. The jewelry is packed in custom tissue paper, then tied with ribbon and placed inside a branded box with a handwritten thank you note.
The first scenario lines up directly with the strengths of a good fulfillment company: timely shipping, the ability to use branded boxes, and the option to bundle the product with an additional item (the insert). While this is easier and less expensive to handle in-house when you’re just starting out, if you’re shipping more than 100 boxes per month, working with a 3PL is a no-brainer.
On the other hand, the second scenario requires a significantly higher level of attention and care. Fulfillment providers are shipping tens of thousands of orders each day for different clients with very different needs. Very few fulfillment companies offer the attention to detail and manual processes necessary to successfully complete the second box that’s customized and curated — and those that do are often very expensive given the work and time involved to fulfill a single subscription order.
If your subscription box resembles the second example, consider scaling your in-house fulfillment to give you complete control over the process.
Subscription fulfillment process
With all of the above information in mind, you may decide that outsourcing fulfillment is the right choice for your subscription orders.
Once you choose to work with a 3PL provider, how does the subscription fulfillment process work?
1. Inventory is received
Before your orders can be shipped, your fulfillment company needs your inventory on hand. Make sure you give ample time for your inventory to be received and stowed by your fulfillment company to ensure that it’s ready to go when that recurring ship date comes around.
2. Order details are shared
Order information can be shared with a fulfillment company automatically, through an ecommerce platform integration, or manually, through a spreadsheet upload.
Tools like Cratejoy, ReCharge, and Bold Subscriptions allow subscription orders to be automatically passed through to fulfillment companies as standard orders, ensuring that subscription fulfillment follows the same standards and turnaround times as one-off orders.
“ShipBob has an easy integration with Shopify. It’s been very simple for us to manage subscription orders, which have become a big part of our business. We’ve made a huge push toward incorporating Ample Foods into people’s daily diets and routine. Thankfully, ShipBob partners with a lot of the tools we use like ReCharge and works hand in hand with us.”
Pablo Gabatto, Business Operations Manager at Ample Foods
3. Products are picked and packed
When order information is received by the fulfillment company, a picking list is created and assigned to a picker. The picking team collects the ordered or subscribed products from their respective locations in the fulfillment center. Once all items in a subscription order have been picked, they’ll be packed up for shipping in a standard, plain box or custom packaging, depending on your preference.
4. Unboxing experience created
Before the package is sealed, labeled, and ready to ship, many brands will have their fulfillment companies add a little something extra to create a special unboxing experience for customers. These extras can vary from a branded insert to completely custom packing materials such as tissue or crinkle paper. 3PLs have varying levels of customization they provide.
This is where kitting — packing the boxes in a very specific order, often with custom tissue paper or inserts — comes into play. As mentioned above, any extensive kitting can be expensive or not provided by 3PLs, so we recommend pre-kitting items — assembling the boxes before shipping them to your fulfillment company — or working with your fulfillment company to create bundles of products that make orders easier to pick and pack.
5. Subscription is shipped
Once the order is assembled, it’s time to ship it to your customers. Most fulfillment companies will purchase shipping labels from shipping carriers on the merchant’s behalf. The shipping carrier and speed will depend on the fulfillment company’s carrier network, as well as the merchant and customer’s preferences. Many fulfillment companies compare shipping costs from a variety of carriers to help ensure the most affordable pricing possible for any given shipping option.
Once the order ships, you and your customers receive package tracking information, allowing you to follow the shipment each step of the way.
What to look for in a 3PL for subscription fulfillment
It’s important to partner with a fulfillment company that can turn a potentially difficult and time-consuming process into a seamless one for you and your customers.
Here are the top considerations for subscription box businesses when choosing a fulfillment provider.
1. Custom branded packaging
Your customer experience doesn’t end at checkout. Receiving their subscription box is the first in-person interaction a customer has with your products, and before they can get to the goodies inside, they’ll see the box itself.
Whether it’s a plain brown box, a box with a shipping carrier’s logo, or completely custom packaging, it makes an impression and affects whether the customer looks forward to unboxing their subscription box each time they receive a new package
According to a Dotcom Distribution study, 34% of people said the use of branded packaging affects their perception of the brand or retailer that shipped the item.
In addition, custom packaging can have an impact on word-of-mouth marketing for your brand: The study found that 40% of online shoppers are more likely to recommend products to their friends if they come in branded packaging.
Make sure you work with a fulfillment provider that allows you to provide your own custom packaging and will honor specific packing instructions, such as having tissue paper or a printed insert inside the box.
ShipBob provides clients with the opportunity to build their brand and enhance the unboxing experience through branded packaging including custom boxes and poly mailers.
2. Network of fulfillment centers
When researching fulfillment providers for your subscription box business, make sure to consider warehousing and storage locations. Many traditional fulfillment companies only have one fulfillment center, and sometimes they are seemingly in the middle of nowhere.
If your customers are geographically diverse, your fulfillment company’s warehouses should be, too. Using one fulfillment center can make it difficult to reach the majority of your customers quickly and affordably. Distributing your inventory to several major cities close to your customers can help you deliver orders in less time and at less cost.
For example, ShipBob has fulfillment centers in several major US cities and regions, meaning that you can split your products across warehouses to make sure that your boxes are shipped from the most strategic location. This cuts down on both shipping costs and delivery time, which can increase efficiencies for your business and satisfaction for your customers.
3. Automated fulfillment
Subscription brands need a provider that uses technology to not only fulfill orders efficiently and affordably but also to leverage data from multiple sources to give complete visibility into your orders and operations.
This technology allows ShipBob to be an end-to-end supply chain solution for subscription businesses, rather than siloed around shipping only.
ShipBob also integrates directly with several major ecommerce platforms and marketplaces, many of which have plugins that make it easy to push subscription information to our dashboard. For example, Shopify apps like ReCharge and Bold Subscriptions ensure that subscriptions (and all other orders) are automatically pushed to ShipBob, making the fulfillment process seamless.
4. Inventory management
While you can use third-party inventory management tools, we recommend finding a 3PL with built-in inventory management technology. Keeping your order fulfillment reporting and inventory forecasting data in one place helps streamline your supply chain.
Inventory tracking tools are included at no extra cost for merchants who use ShipBob to fulfill orders. These tools give merchants the tools, guidance, and reporting necessary to efficiently manage their inventory across multiple stores and fulfillment centers and forecast future demand.
5. Custom-tailored pricing
Finally, all of the benefits of outsourcing fulfillment for your subscription box business won’t mean anything if the process busts your margins. It’s important to understand that different fulfillment companies have different pricing structures.
It’s also important to make sure that the 3PL you choose can accommodate special projects. With ShipBob, if you have specific packaging or shipping needs, our team can accommodate your business with a quote that’s customized for your unique business.
Subscription fulfillment is full of challenges, from timely shipping to creating a great unboxing experience for your customers. For some brands with elaborate, curated subscription boxes, creating a best-in-class experience for customers may mean scaling in-house fulfillment. For others, a simple monthly shipment means that outsourcing subscription fulfillment to a 3PL can cut logistics costs and increase efficiencies. At the end of the day, it depends on the specific needs of your business and your customers.