Blog Posts Cost-Saving Strategies for Managing Subscription Box Fulfillment
Key Takeaways:
- As subscription box order volume grows, fulfillment costs can also increase.
- A recent Multichannel Merchant blog outlines strategies to help manage costs.
- Two tips to consider: explore transportation options and take a strategic approach to your distribution network.
Subscription boxes keep growing in popularity. More than half of online shoppers use subscription box services and most subscribe to more than one box, according to PYMNTS.com.
As order volume grows, it can be a challenge to control subscription fulfillment costs. In a recent blog for Multichannel Merchant, Saddle Creek Fulfillment Director Nicole Lee shares four strategies to help improve your profit margin.
Following is an excerpt…
4 Ways to Control Subscription Fulfillment Costs
Explore Transportation Options
With ever-rising parcel rates and increasing capacity challenges, transportation costs can add up quickly for direct-to-consumer shipments. Look for ways to build in efficiencies.
If you use a batch subscription model, you probably have a high volume of orders going to certain geographic areas. In that case, zone skipping could be a cost-effective alternative to shipping packages individually.
You may not have the density for daily truckload volume direct to California, for example, but you could consolidate orders and build out a full truck over the course of a week. When the shipment arrives at the sortation facility, orders will be sorted and delivered the final mile. Bypassing zones and taking advantage of regional, rather than national, freight rates often results in significant cost savings.
Approach Distribution Strategically
Moving products closer to subscribers also can help to reduce transit time and cost. By utilizing multiple distribution or fulfillment centers, you’re likely to reach most of your customer base using cost-effective ground service. Many companies opt to have one facility on the East coast and a second on the West coast or in a central location like Ohio, Kentucky or Indiana.
Moving products closer to subscribers also can help to reduce transit time and cost.
It’s also wise to take labor needs into account when selecting facility locations. A competitive job market can drive up wages and increase your recruiting and retention costs, especially with labor so tight these days. To keep costs under control, consider locating facilities in areas where warehouse workers are more readily available. It often can be more cost advantageous to fulfill orders where labor is more accessible and then truck them to the desired market.
Having multiple fulfillment locations also can help you adjust to the ebb and flow of the labor market. If it’s particularly tight in one area, you may be able to avoid downtime and control costs by temporarily shifting order volume to another facility.
Exploring strategies like these can help you to better manage subscription fulfillment costs and embrace the growing opportunities available in today’s marketplace.
For more cost-control strategies, read the full article on Multichannel Merchant.
