The subscription box eCommerce market has grown by more than 100% in the last 5 years. The largest subscription box eCommerce businesses generated more than $2.6 billion worth of sales in 2016, growing from $57.0 million in 2011. These business sell a wide variety of products from beer and wine, kids toys and clothing, contact lenses and cosmetics, nutritional supplements and meal kits, to pet food, razors, video games, and vitamins.
Seeing it as an extremely lucrative business model, many new startups and established retailers/brands have jumped into the subscription box market. But it’s not like regular online retail and many have failed in this market. The idea is sound, but poor execution and new challenges forced many businesses out.
Here are 3 BIG Challenges for Subscription Box eCommerce Businesses.
1. Bad Handling of Returns and Exchanges
The subscription box service relies on the premise of customers subscribing to the service and businesses delivering the service on a periodic basis. Simple enough, but what if the wrong product gets sent out and there is a need to return or exchange a product? Can you handle reverse logistics efficiently? Such a situation must be handled with some urgency because a long term subscription is on the line. This is not a one time sale or package but one of many packages. One mistake and all future packages could get cancelled. Returns and exchanges customer service must be a priority and seamless.
Will you have the time and resources to handle the volume of products involved in picking, packaging and shipping? After all, this is not 1 product in 1 package but a combination of products that may also require kitting and assembly. You need a detailed process and execution plan that must be followed strictly by all employees. That will ensure an identical and familiar experience for your customer. Your customer will expect nothing less. Elite OPS handles subscription box fulfillment services for many clients. We have an experienced team that has worked out all the kinks for subscription box services. We can efficiently deliver your promises to your customers.
Related: Shipping and Reverse Logistics
2. Delayed Fulfillment
Probably the worst experience for a customer is to have paid for something and then not receive it on time. Subscription box services work on the premise of pre-payment and then automatically getting what they paid for on a periodic basis. Subscription eCommerce customers see it as an automatic process without the need for them to re-order every week or month. Delayed fulfillment will make you lose your customers.
Using an eCommerce Subscription Fulfillment Service is a smart choice to manage your subscription box business OR to solve your current subscription box service problems. A professional 3PL order fulfillment company like Elite OPS can handle your complete subscription box process from receiving your products, to inventory management, and shipping. Your inventory will be received and stored securely in our warehouse by our experienced fulfillment team. Our team will work with you every step of the way to ensure the correct products are picked packed and shipped to your customers in a timely manner. What’s more, our discounted shipping rates with same day shipping* (before daily cut-off times) or 2-Day entire US transit time can elevate your business to the next level.
Related: Warehousing and Inventory Management
3. Profitability – The Bottom Line
Many subscription eCommerce businesses start out with limited funding. They plan to build demand for their products and find out what products sell best. Inventory forecasting comes into play here as they need real time data of what products are selling well and if they have enough of those products. With such data, they are able to forecast their inventory. This makes sure they are not holding on to products that are not selling. It makes sure they have enough of products that are selling well. It frees up a lot of capital to spend on the right products and to grow their product base.
As an experienced eCommerce subscription box partner, Elite OPS can help you with real-time Inventory Management. You will have access to our experience and tools to be able to forecast inventory trends. You will increase your efficiency and your products will go out on time. Save Time and Money by working with Elite OPS!
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