Subscription Boxes Lead the Way in Direct to Consumer Sales

Subscription Boxes Work to Build Your Business

From our June Newsletter – Subscribe Today!

Over 25% of consumers are signed up for subscription box services. The industry now contains over 3,500 established box services worth roughly $10 billion. And, according to MultiChannelMerchant, 75% of DTC (Direct to Consumer) brands will offer subscription services by 2023.

As the subscription model becomes more popular, many businesses are wondering if they should ride this wave with their own subscription boxes or supply their products to mixed or mystery boxes to attract new customers.

Subscription boxes are beneficial to everyone, which is one of the reasons they have become so popular across the board. Here are some of the benefits to consumers and businesses.

Consumers

• Save money

• Try new products

The benefits to consumers are simple. Not only can they avoid running out of products that they use regularly and count on, they also save money on these products. Plus, they can discover new products in the samples included in the boxes.

Sometimes the boxes are random selections, while other times boxes are selected entirely by the consumer. Each has its own benefits.

Businesses

• Better order forecasting

• Enhance customer loyalty

• Improve bottom line

Order Forecasting

One of the challenges of retail in general is the predictability of order flow. Some businesses experience a very regular pattern throughout the year, with peak season activity predictably raising revenue. But most struggle to anticipate the order volume. Forecasting isn’t easy, especially when it’s about the future.

The subscription box model helps regulate the order flow by grouping orders and standardizing the activity among subscribed customers. Although some will cancel their subscriptions, the overall pattern will be more regular than businesses without subscription options, evening out cash flow and helping predict revenues month over month.

In the early days of e-commerce, a business would need to manually create reorder logic to ship to a customer each month. Today there are numerous services that provide this capability within existing e-commerce platforms, communicating with fulfillment partners as well as the customer and fully automating the process.

Customer Engagement and Loyalty

Subscribing to a box is an act of loyalty. This model helps build a relationship between the customer and the business. The consumer is more likely to purchase from the business that they deal with so regularly and the business has an easier time creating engagement for promotions or new items and cross-selling.

Building this level of trust paves the way for potential up-sells. Familiarity enhances customer loyalty in this case. And it’s worth noting that many of these businesses would not have encountered or attracted the customers without the exposure to product trials that subscription boxes create.

Bottom Line Benefits

Subscription boxes can also save the business money. By regulating order flow, there is more predictability in inventory, which prompts a leaner supply chain and reduces carrying costs. At the same time, the business gains new customers and a more predictable order flow.

Fulfillment Partners

• Better forecasting

• Fill niche services

Similarly, a fulfillment partner that processes subscription boxes may be able to move inventory through more quickly, cutting down on stagnant inventory. Storage costs are rarely a significant source of revenue for a fulfillment house, but they can impact a business’ bottom line.

By filling orders and utilizing inventory in a more efficient manner, a brand can achieve JIT inventory (just-in-time inventory) and smooth the supply chain so there are less stuck-in-storage costs. This is good for everyone.

Shipping large volume for a client once per month helps a 3PL better predict staffing needs. 3PLs are accustomed to ramping up staff for peak holiday seasons, but when a client has a very successful sales promotion without warning, this can create a strain on the fulfillment operation.

Subscription boxes help regulate this flow and make the peaks more predictable. Not only does the fulfillment partner benefit from more regular peak order volumes, but this improves efficiency which impacts the 3PL’s bottom line.

Much like the businesses themselves, fulfillment partners can forecast revenue more easily with the more regulated pattern lent by subscriptions.

Fulfillment services who are adept at serving the subscription box market are prepared to handle the relevant logistics. Medallion Fulfillment & Logistics and Sprocket Express have successfully worked out the kinks and are set up to provide service to this niche, which is growing rapidly. This expertise helps us provide quality service to our clients across a variety of fulfillment scenarios.

Conclusion

The subscription box model works well for all parties in the transaction.

• Predictability (of delivery, order flow, revenue)

• Efficiency

• Relationships

• Saves money (retail prices, inventory, supply chain, preparation)

If your business is not involved in subscription service, this may be a good time to research your options. Almost every brand has a product that fits in one or more of these boxes. Contact us today to see how we can help with your subscription box service needs.

Medallion & Sprocket Express Can Help with East and West Coast Warehouse Locations

Coast to Coast Fulfillment Service Coverage

As an entrepreneur, it’s easy to fall into the trap of trying to do everything yourself. You soon find yourself spending more time working in your business rather than growing your business!

Growing your business means focusing your efforts on your strategic goals and delegating the rest of the work to the experts.

Doing your own fulfillment is a perfect example:

• It demands your attention every day even if you have more important things to do.

• It can get complex if you’re trying to expand your reach into multiple channels and other countries.

• It gets in the way of scaling your business.

Outsourcing your fulfillment:

• Let’s you pay for only the services you use.

• Saves money on staff, warehousing & order processing & shipping.

• Can speed delivery when shipping from multiple locations.>

• Let’s you focus on growth.

We’d be happy to have  a no cost, no obligation discussion to help you decide if you’re ready. If you already are using a fulfillment center let us see if we can improve your level of service and/or save you money. Give us a call at (818) 998-8366 today!

Don’t Let Your Business Suffer Due to Amazon’s Policies, You Have Options!

Grow Your Business by Thinking of More Resources than Amazon

We’re all about solutions here at Medallion Fulfillment & Logistics. The coronavirus pandemic demands that we think outside the box to keep businesses growing and homebound customers satisfied.

Amazon froze shipments from March 17th to April 5th, and stated the following on their website:

“While we will continue prioritizing the products we can receive beyond April 5, we are now able to broaden the list. Given our constrained capacity, we are doing this on an item-by-item basis. We have updated the Restock Inventory page and Restock report in Seller Central so you can check which products are eligible for shipment creation. We consider many factors when determining eligibility, including high-demand products customers need now; current inventory levels and inventory in transit; fulfillment center capacity; and our ability to adhere to the latest health guidelines.” Read the full article at Amazon Seller Central.

What we are continuing to hearing from Amazon sellers even as recently as this week, is that Amazon is still restricting or refusing incoming stock replenishment shipments.

To solve problems many sellers are having with Amazon, we have developed a special program called FBM (Fulfillment by Medallion). The FBM program allows you to ship product to both or either of our East Coast or West Coast warehouses, and gets you back shipping goods to customers the day after we receive your products.

This redundancy with FBA lets you be proactive to the current business and virus situation. And, our FBM allows you to leverage sales to homebound workers; who may be shopping to pass the time, or who are buying items for family members to stay entertained with while home from school. With no shipping or stock restrictions, our program can get you back in business fast!

You can easily select to move to Fulfillment by Seller within the Amazon Seller Central and not be held hostage or be affected by Amazon’s changing policies and shipping problems.

With a growing dissatisfied Amazon warehouse staff that has expressed fears of contagion requiring management to provide temperature checks and masks in warehouses, FBA now seems a less stable option for businesses in the coronavirus pandemic.

Here’s how our FBM (Fulfillment by Medallion) program works:

1. Ship your goods, or a selection of goods, to our East Coast or West Coast warehouses or to both.

2. Our special dedicated FBM On-Boarding Team fast tracks processing and works with you to implement your ordering and shipping fast. We can start shipping orders the day after we receive your products in our warehouse.

3. There are no long term contracts and you can even get a formal and affordable price quote today.

4. Get back in business – shipping to homebound and internet-connected potential customers in one day after receipt of your products in our facility. Don’t miss a beat and make your sales projections this quarter, even with communities and workers on lockdown.

If you are shipping from Amazon Fulfillment and having trouble getting your orders fulfilled due to the coronavirus disruption, please consider Medallion Fulfillment & Logistics for your shipping needs.

• We Provide Fulfillment By Merchant for Amazon & Replenishing FBA

• We Support Shopify, WooCommerce, Amazon, Ebay and all other e-commerce platforms

• We Offer Same Day Shipping

• We Have Competitive Pricing

• 37 Years of Family Owned & Operated Services

Fulfillment Centers in Los Angeles and Boston for East/West Coast shipping.

We are here to help. Give us a call today and let us show you how we can get you back in business fast.

How Fulfillment Service Impacts Customer Satisfaction

“If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That’s the “halo effect.” Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.” – Daniel Kahneman

When you work with a fulfillment partner, it is easy to oversimplify their involvement. True, a fulfillment house picks and ships orders. How could that hurt customer satisfaction?

Final Hands

Simply put, they are the last hands to touch your products and they are responsible for delivering the final product to your customers. To see where you stand, ask yourself a few questions:

• When your customer receives an order, how does it look?

• What packaging materials are used?

• How quickly does it arrive?

• How is the tracking information transmitted?

• How are returns handled?

If you have not audited the results in a while, it may be time to check your fulfillment results. Check our Guide for Fine Tuning Fulfillment for more tips and remember: A great fulfillment provider increases customer satisfaction, while a poor provider can actually damage satisfaction.

Case Study

One of our clients moved from a different 3PL because of customer dissatisfaction. The business started receiving complaints that orders were arriving in junky old boxes with newspaper used as packaging. Many orders were incorrectly shipped, leading to reshipments and delays.

If customers had not reported these issues, our client would not have known the impression their former 3PL was leaving on the customers. You have spent time and money making a good impression on customers. The last thing you need is a lousy box or a packing error to erode your credibility.

Errors Undermine Credibility

Mistakes not only cost money and time, but they damage customer trust. Medallion and Sprocket Express have a 99.9%+ accuracy rate and exceptional customer service personnel. In the case study above, errors and complaints stopped after the business switched to Sprocket Express for fulfillment for East Coast servicing. Customers almost never received incorrect items again, and the clean uniform packaging made a great impression on the recipients. The client added a packing tape printed with their logo, for a complete branded solution.

Speedy Delivery

When we first opened, our CEO used to joke that someday customers would hit the “buy” button and then check the mailbox. Ironically, we’ve nearly reached that point!

With Amazon leading the charge, customers continually have a higher expectation of speed (and shipping cost). To answer the call, most 3PLs expect to provide same day delivery within the next 5 years. And 40% say they anticipate 2 hour shipping by 2028. Interestingly, when Amazon offered 1- and 2-hour delivery in select markets, many customers preferred the free 2-day shipping instead. Speed is not everything, but shipping value is essential. The best shipping strategies offer a few options with a range of costs.

Knowledge is Satisfying

Immediately after placing an order, most website systems generate an order confirmation email. The more transparency a business provides during the order process, the more confident a customer can feel when interacting with the company. Therefore, as soon as an order is released to a carrier for shipment the tracking information should be communicated in real-time.

Both Sprocket Express and Medallion Fulfillment & Logistics sends automatic tracking information to your customer. And we can brand the email with your company information for a consistent image. We ship the same day and we also offer rush and special services.

We Are Here When You Need Help

These are just some of the ways that your fulfillment service partner can affect customer satisfaction. We strongly encourage you to call references when choosing a fulfillment provider and ask some of these questions. Your choice will be representing your business in public view, so it’s no easy decision.

Whichever partner you choose, we invite you to connect with us to share challenges and ideas via email or social media. To learn more about our services and our low industry pricing, see “What We Do”, or get a quote today.