Order fulfillment can be hectic, especially for a subscription business. Fulfillment involves bringing online products to the real world. It is where a business gathers its products, supplies and all the boxes and kits/packs them together. The most rampant question with growing business owners is when should they start outsourcing subscription box fulfillment.
Let’s first compare the benefits and the drawbacks of in-house fulfillment.
Benefits of In-house fulfillment
When your team conducts the fulfillment operations, then that will be referred to as in-house fulfillment. In such activities, your company is responsible for packing, prepping and even shipping the subscription box. New organizations that are looking to create a robust subscriber base can make good use of this strategy.
Subscription box fulfillment for the in-house companies does not necessarily have to start huge. You can decide to start small with a small number of subscribers and grow the customer base with time. In case you feel it is overwhelming for your firm, then it is. However, below are the advantages of in-house fulfillment:
- Saving on Capital
Pricing for subscription box fulfillment companies varies. It usually is on a touch basis which means that you will be charged for every touch the company makes on your products, box or label. This is okay for smaller subscription box companies.
You will also save your firm lots of cash. People involved with the touching of the boxes will be the partners to the business and you. That means there will be no additional costs. As the company grows in size and the subscription base, the task will get harder but still achievable if you have a sufficient workforce.
- Quality Control
In-house fulfillment satisfies a vital issue in the business world. Most business owners are concerned about quality control more than anything else. With in-house packaging, you will be able to monitor the production line or even be a part of it. Here you will make sure all the boxes are up to the required standards and specific instructions.
- Efficiency determination
With in-house subscription box fulfillment, you will determine how efficient your packing is. With this style, it is best to experiment several packing strategies to determine which is more effective in terms of sales. You may decide to use different tools, line setups, and different brands to test the packing that will offer the highest-quality.
Disadvantages of In-house Fulfillment
In-house fulfillment does not lack its share of drawbacks. Here are some of the demerits:
- Focus is on something minor.
The ease of outsourcing subscription box fulfillment as the company grows makes in-house fulfillment something minor that the business should not be placing any focus and energy on. It is not something that will contribute directly to the growth of the company.
Time lost in in-house fulfillment operations could be utilized well in product sourcing or marketing hence improving the business.
- Facilities required
Subscription box fulfillment that is in-house requires several facilities. They may include inventory tracking tool, a large warehouse and inventory management systems. All these come at a cost which can be avoided through outsourcing subscription box fulfillment.
Outsourcing Subscription Box Fulfillment
With outsourcing subscription box fulfillment, you have to trust the fulfillment partner you choose to work with, as you are putting your business presentation in their hands. When it comes to subscription box fulfillment, this is crucial aspect of the success of your business. So, what are the pros:
- No sorting or counting of inventory
Your fulfillment partner should have packing stock supplies for the orders. The fulfillment partner will receive your goods, count them and store them until the day they will ready for packing. The third-party saves you time and space by managing the inventory for your business.
- High Quality
Most of these fulfillment firms create high-quality packing since that is their day job; they have to be pretty good at it to remain relevant in the business.
- More spare time
Outsourcing subscription box fulfillment will leave you with more time to spare. You can use that time to grow your firm in terms of marketing and bagging more subscribers.
When then, should you outsource subscription box fulfillment?
Most companies cease in-house fulfillment once they clock the 500 subscribers mark. Before outsourcing, you could consider the following issues in making that decision:
- Hourly employees’ expenses you incur
- Your costs on some packing essentials such as inserts, tape etc
- Other fees involved such as delivery, counting, storage etc
Ultimately the type of order fulfillment to apply in your business will highly depend on the company itself. If your team is composed of skilled personnel with warehouse management knowledge and you do not have so many subscribers you can consider in-house.
However, if you are dealing with multiple subscribers like say more than 500 and your team does not include crafty guys, you can go for a third party. If you are about to reach this thresh hold or are looking for a new subscription box fulfillment partner, reach out to QuickBox Fulfillment today.