As e-commerce businesses have rapidly risen to global success in recent years, the subscription box business model has emerged as a popular way to try out new products. Here’s how it works: customers sign up for recurring delivery of products, usually on a monthly basis. These subscription-based online businesses can range from food, beauty, clothing, or even pet supplies delivered to customers’ doorsteps. And since it’s a recurring subscription, there’s no need to go through the checkout process for every order, enhancing the convenience of the service for customers. However, running a successful subscription box business requires careful consideration of various factors, and one of the most critical aspects is shipping. In fact, efficient and cost-effective shipping management can make or break a subscription box business. From choosing the right carriers and shipping options to tracking shipments and managing returns, shipping logistics can be complex and challenging for subscription-based businesses. In this blog, we will discuss the challenges that subscription box businesses face in managing shipping and how e-commerce shipping solutions like ePost Global can help subscription box businesses thrive.
Challenge 1: Shipping cost management
With recurring monthly deliveries, shipping costs can quickly add up and eat into profit margins. High shipping costs can result in higher subscription fees, which may discourage customers from signing up or lead to increased churn rates.
To overcome this challenge, subscription box businesses need to implement strategies to manage shipping costs effectively. Some of these strategies include:
Negotiating shipping rates with carriers
By negotiating carrier rates based on volume, businesses can secure discounted shipping rates, which can significantly reduce their overall shipping expenses. This is especially important for small and medium-sized businesses that operate on tight budgets.
To get the best e-commerce shipping rates, businesses must analyze data to determine volume and frequency. This information will help negotiate rates with carriers and ensure that they get the best possible deal. It is also important for businesses to research different carriers and their services to find the one that best meets their shipping needs.
Offer discounted shipping options to customers
One option is to offer free shipping for orders over a certain amount. This can encourage customers to purchase more products in order to reach the free shipping threshold, increasing the business’s conversions and revenue. However, it’s important for businesses to carefully consider the cost of offering free shipping and ensure that it is financially feasible for their operations.
Work with an experienced shipping partner
E-commerce shipping solutions can play a significant role in cost-effective shipping management for subscription box businesses. These solutions offer features such as rate shopping, which compares shipping rates from multiple carriers and identifies the most cost-effective shipping options. Additionally, they can help businesses automate the shipping process, reducing manual labor and saving time and money.
Challenge 2: Order fulfillment and packaging
Managing order fulfillment services and packaging can be a complex challenge for subscription box businesses. With recurring monthly deliveries, businesses need to ensure that fulfillment centers operate accurately and efficiently, while also ensuring that each box is packaged with care to meet customers’ expectations.
Efficient order fulfillment
Customers expect their subscription boxes to arrive on time and to contain the products they selected. This involves the timely and accurate processing of orders, from packing and pickup to shipping and delivery.
One key element of efficient order fulfillment is having a streamlined and automated process in place. This involves integrating order management software with shipping and tracking systems, as well as warehouse management tools. This integration can help reduce errors and delays in the fulfillment process.
One essential component of efficient order fulfillment is packaging the customers’ orders neatly and securely. This involves using high-quality packaging materials that are durable and can withstand the rigors of shipping.
E-commerce shipping solutions can help streamline order fulfillment and packaging processes for subscription box businesses. By automating these processes, businesses can reduce manual labor and errors, improving accuracy and efficiency. For example, e-commerce shipping solutions can automate order processing, including picking and packing, print labels, and shipment tracking, minimizing the risk of errors and delays.
Moreover, the best ecommerce shipping solutions can help businesses optimize their packaging processes, ensuring that each box is packaged correctly and securely. With features like packing algorithms and customizable packing slip templates, businesses can streamline their packaging processes and reduce packing and shipping costs.
Challenge 3: Inventory management
Inventory management is a unique challenge for subscription box businesses. Unlike traditional e-commerce businesses, subscription box businesses must manage inventory for multiple product variations, sizes, and quantities. Additionally, subscription boxes typically contain a mix of new and existing products, making inventory management even more complex.
Here are some of the main concerns that come up with the challenge of inventory management:
- Managing different variations and quantities: Subscription box businesses often offer various box sizes or variations that contain different products. This can make it challenging to manage inventory levels and ensure that the right products are available to fulfill customer orders.
- Keeping track of stock levels: With a large number of products and variations, it can be difficult to keep track of stock levels, especially when dealing with high order volumes. Automated inventory management systems can be a helpful solution to this challenge, allowing businesses to track stock levels in real-time and automatically adjust inventory as orders are placed and fulfilled. By having a clear view of inventory levels, businesses can avoid stockouts, overstocking, and backorders, ultimately improving customer satisfaction and reducing costs associated with inventory management.
- Forecasting demand: Subscription box businesses must accurately forecast demand to ensure they have enough inventory on hand to fulfill orders, but not too much excess inventory that can lead to waste or increased storage costs.
- Dealing with expiration dates: Some subscription box products may have expiration dates, which can add an extra layer of complexity to inventory management. Businesses must ensure that they are not sending expired products to customers and managing inventory levels accordingly.
Managing inventory efficiently and accurately is crucial for subscription box businesses. Overstocking or understocking can lead to increased costs, reduced profitability, and ultimately, customer dissatisfaction. Furthermore, inventory inaccuracies can lead to delayed shipments, resulting in negative reviews and decreased customer retention rates.
Inventory management is yet another area where e-commerce shipping solutions can provide services that help businesses succeed. These solutions offer features such as real-time inventory tracking, automatic replenishment, and forecasting, helping businesses manage their inventory efficiently and accurately. By utilizing these features, businesses can avoid stockouts, reduce inventory carrying costs, and improve their profitability.
Additionally, e-commerce shipping solutions can help businesses manage inventory for different subscription box variations, sizes, and quantities. With features such as kit building and product bundling, businesses can easily manage their inventory for subscription boxes with different product combinations, reducing the risk of overstocking or understocking.
Challenge 4: Shipping logistics
Managing shipping logistics for subscription boxes is a complex challenge for business owners. Coordinating multiple shipping carriers, tracking shipments, and managing returns can be a daunting task, especially as the business grows and scales.
Subscription box businesses must manage various shipping methods and shipping services to meet customers’ unique shipping preferences and requirements. For example, some customers may require expedited shipping, while others may prefer standard shipping. Additionally, managing returns can be challenging, as customers may need to return items for various reasons, such as wrong size, damage, or simply not being satisfied with the product.
Supply chain management
Supply chain inefficiencies can be a concern when it comes to shipping logistics for subscription box businesses. Supply chain management refers to the coordination of activities involved in the production and delivery of goods and services.
For subscription box businesses, managing the supply chain can be challenging because they may need to coordinate with multiple suppliers, manufacturers, and shipping carriers to source and deliver a wide range of products. This can create complexity in managing inventory, coordinating deliveries, and tracking shipments, all of which can impact the overall shipping logistics process.
An experienced shipping provider can provide streamlined shipping logistics management for subscription box businesses. With features such as multi-carrier shipping, shipment tracking, and return management, these solutions can help businesses manage their shipping operations efficiently and effectively.
E-commerce shipping solutions can simplify the process of coordinating multiple shipping carriers by integrating with various carriers’ services, enabling businesses to compare shipping rates and services, and automatically selecting the best carrier for each shipment. Furthermore, these solutions provide real-time shipment tracking, enabling businesses to provide accurate and up-to-date shipment information to their customers.
Challenge 5: Shipping compliance
Shipping compliance is a critical challenge for subscription box businesses. Adhering to shipping regulations, customs requirements, and packaging restrictions is essential to ensure smooth delivery processes and avoid costly penalties and fines.
Subscription box businesses must comply with various regulations, including customs regulations and country-specific packaging and labeling requirements. They must also complete customs forms and provide accurate shipping labels to ensure their shipments are delivered to the right destination.
Compliance with shipping regulations can be challenging, especially for businesses that operate across different countries and regions. It requires businesses to stay up-to-date with changing regulations and requirements, which can be time-consuming and overwhelming.
With all these compliance challenges, it’s the job of e-commerce shipping solutions to help businesses ensure compliance with shipping regulations by automating these processes. These solutions can integrate with various ecommerce platforms and marketplaces, enabling businesses to manage their shipments from a single dashboard.
E-commerce shipping solutions can work with multiple shipping companies, enabling businesses to choose the best carrier for each shipment and compare shipping rates and services. By partnering with reliable shipping companies, businesses can ensure that their shipments are delivered on time and in compliance with shipping regulations.
Challenge 6: International shipping
International shipping poses unique challenges for subscription box businesses. Shipping products across borders requires businesses to navigate complex customs clearance procedures, language barriers, and a range of taxes and duties that vary from country to country.
The international shipping process can be particularly challenging for small and medium-sized businesses that do not have the resources or expertise to manage international logistics. These businesses may need to rely on third-party logistics providers or shipping platforms to manage their international shipments.
However, e-commerce shipping solutions can help simplify the international shipping process for subscription box businesses. These solutions can integrate with an e-commerce store’s order management system and provide a range of delivery options, including international shipping options.
Experienced shipping providers are adept at helping businesses manage the customs clearance process by automating the process of completing customs forms and generating accurate shipping labels. They can also provide businesses with information on taxes and duties, enabling businesses to calculate the total cost of shipping and ensure that they are compliant with local regulations.
It’s also worth noting that e-commerce shipping solutions can provide businesses with access to a network of international shipping carriers, enabling businesses to choose the best carrier for each shipment and compare rates and services. By partnering with reliable carriers, businesses can ensure that their shipments are delivered on time and in compliance with local regulations.
Challenge 7: Returns and exchanges
Returns and exchanges are an inevitable part of any e-commerce business, and subscription box businesses are no exception.
Damaged or defective products
Subscription box businesses face several challenges when it comes to managing returns and exchanges. One of the most common issues is dealing with damaged or defective products. Given that subscription boxes often contain multiple items, there is a higher likelihood that at least one of the products may arrive damaged or defective. In such cases, the business must be prepared to respond promptly and offer a resolution that satisfies the customer.
Providing timely refunds and exchanges
Another challenge that subscription box businesses face when managing returns and exchanges is providing timely refunds and exchanges. Customers expect to be able to return or exchange products quickly and easily, and any delays or complications can result in dissatisfaction and negative reviews. Therefore, businesses must have efficient processes in place for handling returns and exchanges, including clear communication with customers, seamless order tracking and management, and reliable shipping and delivery.
Addressing returns and exchanges challenges
Managing returns and exchanges efficiently is crucial for maintaining customer satisfaction, but it can be a complex process for subscription box businesses. Businesses need to ensure that they have clear policies in place and can process returns and exchanges quickly and accurately.
E-commerce shipping solutions can provide returns and exchanges management features to help businesses manage the process more efficiently. These solutions can automate the returns and exchanges process, enabling businesses to provide customers with a seamless experience while reducing the workload on their customer service teams.
E-commerce shipping solutions can also provide online stores with access to the best rates for return shipping, enabling businesses to manage returns and exchanges cost-effectively, even at high volumes. By streamlining the returns and exchanges process, businesses can improve customer satisfaction and maintain their reputation while reducing the time and resources required to manage returns and exchanges manually.
Challenge 8: Shipping tracking and communication
Shipping tracking and communication are essential for ensuring a positive customer experience and building brand loyalty for subscription box businesses. Here are some of the main concerns that businesses face when it comes to shipping tracking and communication:
- Accuracy and timeliness of tracking information: Customers expect to receive accurate and up-to-date tracking information on their shipments. Any delay or error in updating the tracking information can lead to frustration and confusion among customers.
- Communication with customers: Keeping customers informed about their shipments can be challenging, especially when dealing with a high volume of orders. Providing regular notifications and updates on the status of their shipments can help to alleviate any concerns or anxieties they may have.
- Integration with order fulfillment process: Integration between the shipping tracking and communication system and the order fulfillment process is important to ensure accurate tracking and communication. Any disconnect between these systems can lead to delays or errors in tracking information.
- Collaboration with fulfillment partners: Shipping carriers and fulfillment partners need to collaborate effectively to ensure accurate tracking information and timely communication with customers. Any breakdown in this collaboration can lead to delays or errors in tracking information.
Improving tracking and communication with a shipping partner
E-commerce shipping solutions can provide tracking and communication features to help businesses overcome these challenges. These solutions can provide everything businesses need to manage their shipping process, including tracking numbers, notifications, and updates.
Using management software, businesses can streamline the entire shipping process and have better visibility into every step. These solutions allow businesses to coordinate with fulfillment partners, integrate with different shipping services, and provide accurate shipping updates to their customers.
By leveraging e-commerce shipping solutions, subscription box businesses can provide accurate and timely shipping updates to their customers, increasing customer satisfaction and building brand loyalty. They can also reduce the workload on their customer service teams and focus on growing their business.
Challenge 9: Customer support for shipping issues
Subscription box businesses often face customer support challenges related to shipping. Some of the main challenges include:
- Volume of inquiries: As a subscription box business grows, the volume of customer inquiries related to shipping issues may also increase. This can put a strain on customer support teams and lead to delays in response times.
- Complexity of shipping issues: Shipping issues can be complex and varied, ranging from lost packages to customs clearance delays. Providing efficient and effective customer support for these issues can be challenging.
- Language barriers: If a subscription box business ships internationally, language barriers may also come into play when providing customer support for shipping issues. This can make it difficult to communicate effectively with customers and understand the specific nature of their concerns.
- Integration with shipping partners: In order to provide timely and accurate information to customers, subscription box businesses need to have a good working relationship with their shipping partners. However, integrating with multiple shipping partners can be challenging and may require technical expertise.
In addition, businesses can face other challenges such as lost or delayed shipments, missing tracking information, and damaged packages. These issues can lead to customer inquiries, complaints, and negative reviews, which can harm the business’s reputation.
Managing customer inquiries, complaints, and issues related to shipping can be time-consuming and stressful for business owners. They need to have efficient workflows in place to address customer concerns quickly and effectively.
Look to shipping providers for customer support features for shipping-related issues. These solutions offer functionality such as automated shipping notifications, tracking information, and delivery updates to customers. This functionality can help reduce the number of inquiries and complaints businesses receive, freeing up their customer support teams to focus on resolving more complex issues.
E-commerce shipping software can also help businesses manage their customer support workflows more efficiently. These solutions can provide tools for creating and managing support tickets, tracking customer inquiries, and analyzing customer data to identify common issues and trends.
Challenge 10: Scaling for growth
As a subscription box business, it’s safe to assume that the ultimate goal is continuous growth. Expanding to new markets, new customers, new countries, etc. is a positive goal, but managing shipping operations can become increasingly complex. Soon enough the need to scale becomes apparent. Here are some of the challenges that come with scaling a growing subscription business:
- Increasing shipping volumes: As the business grows and more customers subscribe to the box, the volume of shipments that need to be processed and shipped also increases. This can put a strain on the business’s shipping and fulfillment operations, especially if they are not equipped to handle high volumes.
- Managing carrier relationships: As the business grows and starts shipping larger volumes of packages, it may need to rely on multiple carriers to handle the increased volume. Managing relationships with multiple carriers can be challenging, especially if the business does not have the resources to negotiate rates or track shipments effectively.
- Shipping complexities: As a business grows, it may need to ship to more destinations, both domestically and internationally. This can introduce new shipping complexities, such as customs clearance requirements, duties, taxes, and language barriers.
- Integrating with sales channels: As the business grows, it may start selling its subscription boxes on multiple sales channels, such as its own website, marketplaces, and social media platforms. Integrating these sales channels and managing orders from multiple sources can be challenging and require significant resources.
A good shipping partner can provide scalable shipping solutions to accommodate business growth. These platforms integrate with major shipping carriers like FedEx and USPS and support multiple sales channels, making it easier for businesses to manage shipping operations as they expand. With everything you need in one place, these solutions help businesses save time and reduce errors.
Creating e-commerce shipping solutions with ePost Global
With dropshipping companies like Printify and Shopify, and multi-channel resource companies like Bigcommerce, more and more people are starting subscription box companies with items from all over. However, subscription box businesses face numerous challenges in managing shipping operations, including shipping cost management, order fulfillment and packaging, inventory management, shipping logistics, shipping compliance, international shipping, returns and exchanges, shipping tracking and communication, customer support for shipping issues, and scalability.
At ePost Global, we offer a comprehensive suite of e-commerce shipping solutions designed to address the unique shipping needs of subscription box businesses. From negotiating the best rates with shipping services like FedEx and USPS to providing everything you need for managing orders across sales channels and fulfilling high-volume orders, our platform is designed to help small businesses grow and scale their shipping operations.
We urge subscription box businesses to explore and implement effective e-commerce shipping solutions to overcome their shipping challenges and enhance customer satisfaction. Get in touch with ePost Global today to learn more about how we can help you streamline your shipping operations and grow your business.