Blog Posts Getting Past ‘Go’: What You Need to Know About Subscription Fulfillment
Most subscription box entrepreneurs will tell you that starting their business was the easy part – that the real challenge comes when a subscription-based business truly takes off. Orders begin pouring in, and your head starts spinning with thoughts of peak-order-processing, unpredictable growth patterns, slim profit margins and high shipping costs.
If your business is reaching the head-spinning stage, it might be time to step back and take a good long look at your fulfillment operations. In her latest blog for MultiChannel Merchant, Nicole Lee, Saddle Creek’s Director of Fulfillment, explains how a number of common mistakes can keep your subscription business from reaching its full potential.
Following is an excerpt from the blog…
7 Pitfalls to Avoid in Subscription Box Fulfillment
In order to hold your own in a competitive marketplace, you need to stay on top of your game. Want to master subscription box fulfillment? Steer clear of these common pitfalls:
- Failing to weigh the cost benefit of a fulfillment solution
When designing a fulfillment solution, it is important to balance service with cost. Naturally, you want to delight your subscribers, but first make sure your current order revenue can support the solution.
It’s best to avoid over-engineering. This is especially true when investing in automation. Sometimes the simplest solution can be the most effective and most flexible. While it may be tempting to add all the available bells and whistles, basic solutions might, in fact, be sufficient. For example, consider barcode scanning and powered conveyors before investing in light- or voice-driven technology. Gradually increase the complexity of automated solutions as necessary to achieve the service level your subscribers expect.
- Lack of scalability
In a batch subscription model, orders are usually processed in a peak period once a month, resulting in significant fluctuations in cycle volume. Be prepared with flexible space and staffing. Adding temporary staff and powered conveyor production lines can help to manage maximum volume.
Planning for business growth is also advisable. Seek out scalable fulfillment solutions that can accommodate an expanding subscriber base. Rigid solutions demanding a major capital investment could lock you into a solution that doesn’t work in the long run.
- Inadequate inventory management capabilities
For merchants that use the same inventory for multiple channels (i.e., subscription, retail, ecommerce, etc.), inventory management can be particularly challenging. Often, it is necessary to allocate a certain quantity of particular SKUs to each channel. Accommodating this level of complexity requires an order management system (OMS) that can give you visibility over all the channels and the ability to reserve units for orders in the appropriate channel.
An OMS is also valuable if you use more than one fulfillment source, such as multiple distribution centers or vendors. In this case, you need visibility across your entire enterprise in order to optimize inventory.
For more pitfalls to avoid, read the full article.