Blog Posts When Should You Outsource Subscription Box Fulfillment?
Business is booming for subscription boxes. One quarter of consumers currently take advantage of such services, and another 32% plan to sign up for them in the next six months, according to a survey by tech firm First Insight. With substantial growth on the horizon, subscription box companies must make sure that their fulfillment operations are prepared for the influx of orders.
Third-party providers can be a valuable resource, but when does it make sense to outsource? In a new article on MultiChannel Merchant, Nicole Lee, Saddle Creek’s Director of Fulfillment, shared a number of reasons to consider calling in the experts.
Following is an excerpt from “6 Reasons to Outsource Subscription Box Fulfillment”…
When Should You Consider Using a 3PL?
How do you know when you need outside fulfillment help? Here are six signs that it’s time to engage a third-party partner.
- Business growth – Many subscription businesses reach a point where in-house fulfillment processes are simply no match for their sales volume. Additional space and staffing and automated fulfillment solutions are necessary to keep the wheels on the bus and accommodate future growth. While everyone has a different threshold, 5,000 orders a month is a common tipping point for outsourcing.
- Fluctuating order volume – Whether you’re filling thousands, hundreds of thousands or even millions of monthly orders, it can be difficult to balance the intense peaks and valleys of the subscription business cycle. As they rush to hit a shared drop date, subscription box companies typically have a brief period of intense activity. Paying for space and staffing to accommodate the highest volume all month when operations are only at capacity for one week can significantly impede profitability. With a scalable, shared-space environment, a 3PL gives you the ability to meet your peak requirements without a permanent overhead investment.
- Narrow delivery window – Subscription box companies with an active social media following strive to generate a social buzz around unboxing, so it’s critical to ensure that subscribers across the country receive their orders at approximately the same time each month. A knowledgeable 3PL can process orders strategically based on customer location to meet the tight delivery window required for synchronized deliveries.