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Top 3 Challenges Facing Subscription Box Companies

Starting up your own subscription box business poses special challenges. Here are three of the main challenges we see businesses struggling with, and how you can overcome them and keep your business smoothly operating. From tasks surrounding early preparation to challenges which come along with scaling, below are a few of the main things you have to be on the lookout out for as you launch your own subscription box:

Pricing Subscription Boxes

Pricing is the Achilles heel of all subscription boxes. While trying to get every item as affordable as possible, most business owners do not take the required time to accurately price the products. That might happen for several reasons:

  •         Not offering enough ‘wiggle room’ in the budget if you have to occasionally spend more
  •         Underestimating certain costs, such as product shipping or sourcing
  •         Comparing one’s concept to the competition, as well as adopting their structure of pricing
  •         Not considering all of the costs

How you can overcome this challenge:

First, it is suggested that you check out this subscription box calculator. The calculator simplifies many calculations, but only should be utilized as a tool – you’ll have to do extra investigation around the costs to gain an accurate feel for pricing.

Scaling Fulfillment In-House

In-house fulfillment is challenging. Scaling is even more difficult.

How you can overcome this challenge:

First off, consider outsourcing. While it is possible to save money and possibly gain more control over packing quality, it is recommended that you outsource subscription box fulfillment. The reason is that it allows you remain concentrated on expanding your business versus the burdens of operating it.

If outsourcing is not an option, there are some things to do to assist in keeping this operation smoothly running:

  1.    Find the proper people. You have to have one Warehouse Manager, whose job it is to track products, their expiration dates, quantity, and any additional important details. You also will have to have Packing Managers, serving as heads of the packer team. Because the majority of subscription boxes contain five to ten objects inside, you are restricted to the number of individuals who are able to pack at one time, meaning you must create different ‘lines’ of staff packing up boxes. All packing managers assist in keeping them efficiently running.
  2.    Commit time to preparation. In pre-folding all boxes, stocking up bins using packing material, as well as keeping the space free of obstacles and clear and free, you vastly decrease the delays with packing and odds of delays on the line.
  3.    Make a month-to-month calendar. A month-to-month calendar does a couple of things: 1) it outlines ‘drop dead dates’ for when the product has to arrive, be stored, and be counted, 2) it details packing schedules and days, and the number of staff required, and 3) it’ll hold you accountable to those requirements and dates and improves your odds of a good execution.
  4.    Keeps all hands on board. Having a staff of floating packers that are able to restock products, clean a space, or jump inside the line, assists in keeping lines efficiently moving.
  5.    Develop workstations. Having pre and post-line workstations for either slapping on labels or folding boxes assists in removing some measures from the ‘packing’ portion of the project. In a perfect world, the packing line never should stop moving, with subscription boxes piled up it the line’s start (stock) and finish (finished product).

Maintaining Excellent Customer Service

Subscription box businesses thrive and fail on their capability of excellently servicing subscribers. Unlike the item, they are willing to hold off three to four weeks every month for, getting accurate and helpful customer support is something subscribers immediately expect.

As subscribers are dedicating themselves to a continuous service which rebills on an established interval. Within the same way that customers dedicate themselves to you, they will expect a solid commitment from you.

What that means is that you must hold yourself to solid customer service standards:

  •         Email-received alerts: You should notify consumers that their email was received
  •         Same-day reply: During business days, keep all response times underneath 24 hours
  •         Outstanding Self-Help: Your business ought to have an FAQ page and a self-service option
  •         Social Support: Serving customers does not cease in an email inbox. Your staff should focus on all your social media platforms.

To achieve those things, you ought to consider the use of a 3rd-party option for customer service, which is going to offer extra services and tools to limit reply times. For instance, automatically using Macros fill in response emails, while utilizing Lists and Filters sorts emails based on keywords and topics.