Helpful Information

Can Outsourcing Fulfillment Increase Sales?

As your ecommerce business grows, managing your fulfillment operations in-house may become more than your business is equipped to handle.   Fulfilling more orders requires additional warehouse space, hiring more employees, and possibly upgrading your order processing system.  Once business volume warrants it, many businesses seek to partner with a 3PL (third party logistics) company.  The benefits provided by 3PL’s may contribute to higher sales as you concentrate on growing your business.

Better Service

Today’s ecommerce customers expect efficient order fulfillment and even faster shipping.  Consumers also want more flexibility with their orders, such as the ability to check inventory for a product, better decision-making tools, and shipping options like next day delivery.  When your business grows to the point that you are no longer able to offer your customers best-in-class service, it is time to explore other fulfillment options.

Lower Shipping Costs

Due to economies of scale, many fulfillment companies are able to offer lower prices for shipping.  A 3PL knows all of the shipping options and will be able to recommend what will be best for your business’s needs.  This can directly impact your bottom line, as many companies spend a large percentage of their budget on shipping.

Streamlining Orders

A greater assortment of shipping options, such as same-day delivery, has accelerated the pace of order processing.  Fulfilling orders in a timely manner means that customers receive their order when expected.  If your business cannot fulfill orders quickly and accurately, customers may be unhappy.  The right 3PL can provide you with solutions for all of your supply chain needs from order fulfillment to freight management.  Streamlining these processes will save you money in the long run.

Match Fulfillment to Your Growth

One of the challenges of order fulfillment is fluctuations in sales volume.  Fulfillment companies have the resources to handle it.  For example, if your business’s sales increase dramatically during the holidays, it might be difficult to meet that added demand in-house.

A fulfillment partner will enable you to grow your business without worrying about fulfilling the added orders.   And, if your business decides to expand internationally, your fulfillment partner will be able to guide you through that fulfillment process as well.

Technology

Partnering with a fulfillment company gives you access to the latest technology and warehouse equipment, as well as being able to track all shipments.  3PL’s are able to spread technology update costs over multiple customers so your business does not have the burden of capital investments alone.   This is a cost-effective way to keep up with the advances in the industry.

Focus on Your Business

Many business owners have too many tasks that need their attention and fulfilling orders can take a lot of valuable time.  Outsourcing your fulfillment allows you (and your team) to focus on other areas of your business, such as growing sales, strategic planning, marketing, and customer service.

These advantages enable you to grow your business and increase sales without worrying about the fulfillment side of the business.  The order processing experience that 3PL’s offer ecommerce companies will give your business the best results to improve profits.  If you are considering outsourcing your fulfillment operations, contact Kable at http://www.kablefulfillment.com/.

Proper Packaging To Ensure Economical Shipping Rates

As an online retailer, shipping charges often represent a large expenditure of your overall budget.  On top of shipping fees, packaging costs can be anywhere from 10-40% of a product’s price.  While packaging’s main purpose is to protect your product, it must also withstand the shipping process so choosing the correct package type is important.  A detailed packaging and shipping strategy will ensure that the cost of getting goods to consumers will not be greater than your sales revenue.

Packaging Materials

In order to reduce dimensional weight fees, packaging materials should be as efficient and economical as possible.  Each layer of packaging material, such as foam or bubble wrap, adds to the cost.  For items that need protection, one heavy layer of material might be more economical than several lighter ones.  Design changes to primary packaging, which are the materials that touch the product directly, can reduce volume, and therefore shipping costs.  However, it is important to ensure that products are still protected even with the elimination of excess materials.

Re-design

Re-designing packaging and materials for products should not only reduce the weight of materials, but reduce the cost of them as well.  The ability to improve protection of the product with a re-design will also decrease shipping costs by cutting down on damages.   Depending on the type and amount of products you ship, it might be economical to carry a few selected sizes of the packaging materials you use most often.

Reduce Cost per Package

Online retailers can decrease shipping costs with the size of the packaging they use.  Packages should be as small as possible given the size of the product.  If you can substitute mailing bags or envelopes for boxes, shipping costs will be further reduced because their dimensional weight will be less.  If boxes must be used, examine the board and liner combinations to get a lower weight and potential savings.   In most cases, only two inches of dead space between the product and outer box is needed.

Consider Eco-Friendly

Going eco-friendly with packaging materials can also help online retailers save money by reducing shipping charges on the back end.  Using local materials reduces shipping distances and weights on the back end which will decrease the amount spend on material transportation.  Smaller orders of materials can be placed and delivered at more affordable costs as opposed to large orders shipped from overseas or across the country.   Additionally, recycled materials often cost less than new materials.

Alternative Options

Conventional packaging materials such as boxes and mailers are not the only option for protecting your items.  For items that do not require protective padding, coffee bags are inexpensive yet high-quality looking options.  Since they keep items thin and flat, shipping rates will be much cheaper than some more voluminous traditional packaging.

By making sure that your packaging options make sense for your product line, you will be able to reduce the amount spent on shipping your products.  Visit our website at www.kablefulfillment.com to explore your packaging options.

 

Making Sense of the New Peak Season Surcharges from UPS

This upcoming holiday season, shippers will be paying even more for deliveries made by UPS.  During selected weeks in November and December, UPS will be introducing their new peak shipping charges.  These charges, which will be published on September 1, 2017, apply mostly to U.S Residential, large packages, and packages Over Maximum Limits.   Shippers will need to be aware of when they are shipping larger residential packages so they can avoid the peak season surcharges.

During last year’s holiday season, UPS’s daily volume was more than 30 million packages on more than half of the shipping days.  The company hired almost 100,000 season employees during the peak season.   It is expected that shipping volume will match or exceed that this year.

UPS explains that in order to meet the doubled daily volume during this busy shipping time, the higher charge will help ensure UPS keeps up with consumer demand and provides on-time delivery.  Shipments that are larger, heavier, or unconventional shapes create more complex operations, adding to the cost per package to ship.  Since UPS employs additional sorting and delivery personnel, increased air and truck cargo capacity, and temporary facilities during this time of year, the surcharge will go towards financing these additions.

The new peak charges for 2017 are as follows:

Nov 19 to
Nov 25
Nov 26 to
Dec 2
Dec 3 to   Dec 9 Dec 10 to
Dec 16
Dec 17 to
Dec 23
UPS Next Day Air® Residential n/a n/a n/a n/a $0.81
UPS 2nd Day Air® Residential n/a n/a n/a n/a $0.97
UPS 3 Day Select® Residential n/a n/a n/a n/a $0.97
Ground Residential $0.27 $0.27 n/a n/a $0.27

n/a = no additional charge during this period

For example, a package that weighs one pound in a Zone 2 shipment that ships via 3 Day Select will increase almost 10%—from $9.90 to $11.07.  Multiply that by 10 similar boxes you need to ship, and you just incurred fees in excess of $110!

One concern for non-ecommerce customers is that the surcharge will impact them as well.   These are customers that regularly use UPS and might be hit with the extra charge too.  Those companies that do not do additional business during peak season, such as prescription drug businesses, will also be affected by the surcharge, even though their shipping volume will remain consistent.

What can shippers do to minimize the impact of the peak season surcharge? 

  • Be aware of the sizes you are shipping and if they will be affected by the surcharge.
  • If possible, ship before or after the highest peak season time (December 17-23).
  • If you are taking orders past December 17th, consider charging more to the consumer to help absorb the cost.
  • When shipping packages that are larger than the published maximum size limits, consider UPS Freight.

The UPS peak surcharge is sure to affect millions of packages sent during the holiday season of 2017.  It is highly likely that Fed Ex will follow suit by raising their peak season rates as well.

5 New Ideas for Selling More Subscription Boxes

Once you have established your subscription box company, finding ways to keep new sales coming in can be challenging.  Consistent growth in sales, however, is a necessity to the future of your company. There are several things you can do to keep the selling momentum going, even as new subscription box companies enter the market daily.

Expand Your Social Media Content

You probably have a Facebook, Twitter, and Instagram page, but are you using them to the full potential?  If you are posting just to put something up there, you are not making the most of social media.  This is a platform for you to bring value to your target audience.  Make sure your content speaks to your followers, and you will be seen as the authority in your market.     Tip:  Spend some time interacting with your followers and share/re-post any of them using your products, as this is how you further grow your brand awareness.

Get to Know the Influencers

Every industry has their own group of influencers that have a network of followers that most likely far exceeds your following.   Reaching out to these influencers to get an endorsement on their social media page could amp your brand awareness triple-fold.   In order to get an endorsement, you send them a free box to have them sample it, and then post about it.   If you aren’t sure who the influencers are in your industry, research them using sites such as followerwonk.

Blog

Don’t have a blog yet?  Set one up, as soon as possible.  This is one avenue to further offer your customers valuable information.  A blog that speaks to your target market will retain and gain new customers; sharing it across your social media channels gives you great content.  It is also an effective way to increase your SEO if done correctly.   If you are not great at writing, hire someone who is.  Or, see if there is a potential partnership with a guest blogger, which is another great way to expand your brand’s reach to a whole new set of followers.

Coupon Codes

Consumers love to save money and a coupon code alone is enough incentive for some to make a purchase.    For those who may be new to subscription boxes or new to you as a customer, this is a way to get them to jump off the fence and buy!   Create a few coupon codes and test in different arenas so you can find what will work best in terms of initial purchase and then retention.  Sharing a coupon on sites such as RetailMeNot, and another on your social media channels will give you a good A/B split test to start.

Video Content

The goal of video content is to get it to go viral, thus increasing your brand awareness.  In order to do this, ensure that the video content is consistent with your brand.  Add a little humor or interesting facts to make the video engaging to your audience.  You may not feel comfortable doing this yourself, but there are plenty of people who specialize in it.

 

Increased marketing efforts such as these will lead to increased sales.  If your company needs help managing your subscription box company growth, please visit our website today at: Kable.com.

3 Signs It’s Time to Outsource Fulfillment for Your Subscription Box

Running a subscription box company comes with a lot of important decisions.

conveyor belt with cartons  for use in presentations, manuals, design, etc.

Figuring out your market and how to grow it are two obvious ones.

Another decision that is every bit as important, but less black and white, is knowing when you should consider outsourcing order fulfillment. As subscription box businesses grow fulfillment and shipping are areas with a direct impact on customer experience and operating margins – yet there are no hard rules on when outsourcing makes sense. The good (or bad) news is there will be signs. You just need to know what to look for.

Poor Inventory Planning:

The cost of the goods in your box are likely your biggest expense. This means you need to be very adept with your sourcing strategy, including inventory planning.

A professional warehouse will help you be better at tracking inventory, including inbound receiving, inspection, and counts. They’ll help ensure you have the products in-house each month so your box ships on time.

Shipping Late:

Of course, poor inventory management is not the only reason boxes may ship late. The order fulfillment process takes a lot of time. This is what fulfillment companies like Kable are experts at – being efficient with pick and pack.

They can provide a scalable source of skilled labor to accommodate any volume of shipments, and do so with accuracy and speed. At a point, packing boxes isn’t scalable for most subscription box companies to keep up with on their own. Outsourcing helps keep orders shipping on time and at the lowest fulfillment cost possible.

High Shipping Costs:

Shipping costs are largely a function of volume – so the more shipping volume you have the better shipping rates you will get from carriers. Growing subscription box companies can usually benefit from the rates offered by a larger fulfillment warehouse.

In many cases, the shipping savings will offset much or all of the costs they are paying for fulfillment services. This makes the decision an easy one.

Growth is a great thing for a subscription box company. But, it also forces the company to make a lot of tough decisions – like when and how to outsource their order fulfillment. If any of these 3 problems seems familiar the time may be right for you.

5 Quick Tips for How Subscription Box Companies Can Save on Packaging

It’s not surprising to say that packing materials are necessary to keep items from getting damaged when shipping – but they need to look good to. Unfortunately, they can quickly become a big expense for a subscription box company. Here are five ways that you can cut down the cost of packing materials without risking damage or the quality of your customer’s “un-boxing” experience. carton

  1. Buy in Bulk

Once you decide on the box sizes and types of packing materials you will need, purchase them in bulk to save money.  A simple search on the internet will show where you can purchase the items for the best price.  Amazon, ebay, and Walmart all offer shipping materials at reasonable prices.  If a certain item will require a different sized box, plan for that ahead of time so you can have it on hand when it comes time to ship that month.

  1. Use the Correct Size Box

It’s impossible to stress the importance of using a box that is the right size for your items enough.  Shipping in a box that is larger than necessary contributes to a much higher shipping charge, as well as extra packing material.  Reducing the box size by just an inch can make a difference in shipping costs, and if it can fit in the mailbox, even better!

  1. Recycle, Recycle, Recycle

Items such as boxes, bubble wrap, peanuts, plastic air bags, and envelopes can all be reused.  Just make sure the items are in very good condition and clean before using them again. Many “new” packaging materials are made from recycled materials as well. Using these types of products can have a great appeal to many potential customers.

  1. Free Shipping Supplies

If you are able to, take advantage of free shipping supplies from your carrier.  USPS, FedEx and UPS all offer some items for free.  For example, the USPS offers free flat rate boxes and free mailing tubes for Priority Mail.  If you find items that are suitable for your shipping needs, you’ll maybe even save enough to offset slightly higher shipping costs.

  1. Search for Sales

Sometimes, retailers run sales or promotions on certain shipping supplies.  Office Max and Office Depot offer coupons if you register on their website or at their stores.  These coupons can be used for tape guns, boxing tape, and tape guns.

 

With just a little effort, subscription box companies have many options for cutting down on the expensive packaging materials.

Starting a Subscription Box? Here’s 3 Ways to Save on Shipping

Shipping is a big expense for every subscription box company and is especially important to think about as you are first starting out.

USPSHowever, even established subscription box companies can benefit from evaluating their own shipping patterns and requirements on a regular basis. It’s a key exercise for any online retailer to prevent overspending on small parcel shipping.

Do the Research

There are several carriers available to help ship your customer orders, which gives you some leverage when negotiating rates.  Don’t assume any one is your only choice – there are many parcel consolidators and parcel delivery services that can complete with the USPS and other large carriers. Any established online business should discuss their shipping history with their current carrier to get better rates, or can use that data to negotiate with a new carrier.  Plus, the more knowledge you have about your own shipping patterns the better pricing carriers can offer.

Keep in mind that it may be cost-effective to use two different carriers if you are shipping packages that differ in size or weight, or to several areas of the country.  Knowing your company’s needs and considering all the options is the only way to get the best shipping rates.

Save on Packaging

Packaging for shipments can also be a large expense, particularly for smaller companies.  One way to reduce costs is to buy boxes and packing materials in bulk.  When possible, recycle boxes and packing material.  Not only are you helping the environment, but also your bottom line.

Also, make sure the box size is the correct size for your items.  Shipping in boxes that are too large can mean you are paying for extra shipping weight unnecessarily. Packaging that is too large, or too small, can also lead to expensive damages and returns. And unhappy customers.

Shipping Insurance

Depending on the value of your subscription box, it may not be worth paying extra to insure it.  If your carrier offers reliable service with few damaged or lost items, paying for the occasional damaged package might far outweigh insuring every box. Investigating your rate of returned packages can help you figure out if it is worth this extra expense.

Shipping can account for 10% or more of the operating expenses for a subscription box company. Making educated choices for how you manage shipping can often be the difference between a profit or losing money for your subscription box company.

Inventory Management Must-Do’s for Every Subscription Box Company

Aside from the obvious expense of purchasing inventory in the first place, failing to properly manage it can lead to shortages for customers, costly overages for product that sits unsold, and consume capital resources. warehouse Proper inventory management ensures your subscription box company is operating efficiently, while continuing to meet customer demand.

Here are 3 ways to keep your inventory management process working.

Conduct a Physical Inventory Count

In order to correctly assess inventory, you have to know what you have. This seems obvious, but accuracy with inventory is no simple thing for companies of any size. Take into account not only finished goods, but raw materials and works in progress.  Physical inventory counts should be compared against data records to see what discrepancies exist and how the process can be improved. For subscription companies that outsource fulfillment and warehousing, your provider should be performing regular cycle counts to insure inventory levels are accurate. It’s important their inventory counts and yours are reconciled regularly.

Forecasting

Optimal inventory levels means having enough of an item to fulfill a month’s worth of subscription boxes without being overstocked.  Inventory for subscription box companies is unique in that products are not typically forecasted by demand, but by number of box subscriptions sold. This means the growth and sales trends with your own business must be considered precisely each month – and not seasonally or annually as with other types of retail businesses.

Systems and Data Maintenance

For growing, larger, or more complex subscription box companies, inventory management can require a core team with the ability and tools to evaluate, analyze, and order product. It starts with a process and system that provides timely access to inventory data. At some point, a dedicated inventory control specialist may be required to oversee inventory operations. Implementing inventory management software, in the form of a WMS or ERP, is another way growing companies stay on top of the challenges that come with controlling inventory.

Getting good at inventory management is not the reason you started a subscription box company, but it can be the one thing that determines the success or failure of it. Implementing these ideas will help to ensure effective inventory management so you always have the correct amount of each item on hand and your customers stay happy.

What to Consider When Creating Packaging for Your Subscription Box

Part of the allure of receiving a subscription box is the packaging.   Great looking packaging drives your brand’s image, as well as increases the chances that the subscriber will be happy with their subscription, and continue to subscribe.

1.       Design

The design and style of your packaging should fit the theme of your subscription box.  For example, if your target audience is young women, make sure you pick colors, style, and lettering that will appeal to them.  After all, the packaging is the first impression the customer has of your box. carton-emballage

2.       Quantity

As a start-up, you probably will not have the money to invest in custom packaging right away, but once you have at least 300 subscribers per month (and some history on products being shipped), you can begin to research your options.  Most packaging companies require a minimum of 1,000 boxes for a custom-printed mailer, which is a large outlay of money.

3.       Size

Make sure you choose the right size box.  Resist choosing the larger size box, not only to save on shipping costs, but because subscribers will not be happy with a half-filled box.  This is where product history comes in handy.

4.       Sourcing

When deciding on a manufacturer, you should consider their location, fulfillment options, turnaround time, and of course, price.   When comparing manufacturers, have your box size and order quantity on hand so you can get the most accurate price quote.

5.       Cost

The price of your custom box is going to be based on the type of printing, box quality, and ink quality you choose.   Decide where you want to spend your budget and where you are willing to cut costs, especially in the beginning.  This will give you negotiating points when discussing price with your manufacturer and can help you get the best deal on your custom packaging.

Once you have placed a few orders, and are satisfied with your custom packaging, you can negotiate better rates on volume with your manufacturer.