How Publishers Can Boost Revenue With A Subscription Box, Part 2

In my last post, I explored the important considerations publishers should make before launching a subscription box, including developing your offer and branding, choosing a platform, finding products and marketing. Now it’s time to start thinking about how you’ll actually get your subscription boxes to your customers. In a third and final post, I’ll share ways you can grow your box revenue. You’ve got two ways to go about doing the actual fulfillment: You can outsource the task or you can do it yourself. In order to get a real understanding of how the fulfillment process works I highly recommend you do a couple yourself before you investigate a third-party logistics (3PL) provider. I’ll get into what to look for in a 3PL, but before that let’s go over the actual fulfillment process. Do-It-Yourself Subscription Box Fulfillment You’ve got inventory in stock and it’s time to get packing. The first thing you’ll need to do is find the right sized box. The most common level of service to use when shipping subscription boxes is USPS Priority Mail Commercial Plus Pricing, and beyond that Priority Mail Cubic pricing. This is the best kept secret in postage. You pay by distance and cubic volume, no matter the weight. As with all Priority Mail shipping, it comes with $100 of USPS insurance included along with tracking. For this reason I like to purchase my boxes specifically for each month’s mailing. I want the smallest box possible that will still afford protection for the products that make up that month’s box. The difference between a .2 and .3 cubic foot box can add up to hundreds, even thousands, of dollars in cost difference depending on your volume. Check your local area for box vendors, or you can use a national vendor like www.uline.com. If your box sizes won’t vary much from month to month, look into having custom boxes produced. A nice looking customized box can add a unique dynamic to the whole user experience. There are plenty of companies out there that specialize in this type of box production: Packlane and Distinct Packaging are two of the more popular services. Packing and Shipping There are lots of software platforms that will allow you to mail through this class of mailing. In the subscription box business the most popular is www.pirateship.com. It’s free software that’s easy to use, doesn’t mark up postage, calculates the best class of mail for your shipments and then gives you the option to choose. It integrates with Cratejoy, Shopify, Chargify, Recurly and others. Once you’re ready to ship, log into your mailing software, update the orders with your integration and choose the variable you’re ready to ship for. With our BJJ Box we have three or four variables that could possibly affect each shipment. When someone signs up we ask t-shirt size, gender, belt rank and for our VIPs, waist size. We’ve had months where shirt size was the only variable we had to account for, other months we’ve had all four come into play. No matter the case, you’ll want to download and print labels for one group of subscribers at a time. I find this a more foolproof way of reducing the likelihood of shipping errors thanks to the wrong size of something making it in. If you don’t already have one by now, whether you’re in the subscription box business or not, I can’t recommend enough having a shipping label printer. The Dymo 4XL and ROLLO are two great options. You can pick up 4” x 6” labels for pennies a piece on Amazon. Once you’ve printed your labels it’s time to get packing. In the subscription box business, packing the actual box is referred to as “kitting,” which is just a fancy word for putting items in a box in a particular way. Remember, with a subscription box it’s like a birthday or Christmas every month: You want your subscriber to have a pleasant experience every time and not feel like someone just jammed everything into a box. Now it’s time to get to work. We’ve kitted boxes using both a batch flow and a single piece flow process. Batch flow would be laying out a large batch of boxes, putting item 1 in all the boxes, then moving onto item 2 and so on. Then closing and sealing them all at one time, etc. Versus single piece flow, this would be grabbing a box, putting items 1, 2, 3 and so on, in at the same time, sealing then finally affixing the label. It doesn’t seem to make sense but single flow is the slightly faster, more efficient solution. So you’ve got your boxes done, now what? If you’re using Priority Mail service the USPS will come and pick them up. We ship between two to four pallets each month. The post office picks up free of charge and provides the pallets. Talk to your local post office for more details. If under a few hundred boxes the entire process isn’t too bad and can be done in a day. Once you get over 500 or so it becomes a much bigger task to handle and can cut into time better off spent doing something more productive. In which case, finding a good 3PL is worth investigating. Finding a Third-Party Logistics Provider Currently we’re doing fulfillment out of our facility in California. We’ve ventured out using a 3PL in the past but ran into some problems with things not being done correctly the first time around. After talking to other people in the subscription box business, I found my experience was not uncommon. Finding the right 3PL will take some time. I’m currently narrowing down my selection of who to try next. When it comes to finding a 3PL there are lots of factors to consider. The most important, in my opinion, is experience with subscription boxes. A subscription is a very unique relationship between you and your customer. Ordering an item one time from an online retailer is much different than looking forward to that trip to the mailbox month after month in anticipation of receiving your favorite subscription box. 3PLs that have experience with subscription boxes have a better understanding of the subscriber’s expectations and yours. Another factor to consider is location. If your subscribers are evenly spread out around the country, finding a 3PL in the midwest or centrally located may save you on postage. However, if a large portion of your subscribers are in a particular state or region (a surfer box in California for instance) then it would make sense to have your 3PL near the bulk of those subscribers. Finally, price should be taken into account. Compare pricing to other reputable vendors, but do keep in mind that cheap and good rarely go hand in hand. Also be mindful that working with a 3PL will also add time to your fulfilment schedule versus doing it yourself. Expect to pay between $1 and $2 per package/subscriber for kitting depending on the number of items in each package. In addition you’ll be paying shipping along with supplying boxes. Investing the time in finding a 3PL that fits your business will be well worth it. Freeing yourself of this burden will allow you to focus on the important business of growing your subscription box.

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How Publishers Can Boost Revenue With A Subscription Box, Part 2

Mike Velez

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