What’s your experience of subscription box outsourcing?

We’ve had a few subscription box clients, some of which have been more successful than others. One of our clients is Baby Mori, who offers baby clothes and is very popular in the baby gift market. The service we provide is very similar to what we do for our e-commerce clients.

What are the specific needs of your subscription box clients?

The speed of turnaround is essential, and personalisation is a big concern for business owners to overcome when they consider outsourcing. We can provide all the things like branded paperwork and packaging that maintain that personal touch. We also have a particular aptitude for assembly and kitting, which is vital to subscription box clients.

In the run-up to last Christmas, we put together around 200,000 kits for various customers. We can work to a design brief as to how products should be laid out in the box, ensuring the continuity and consistency that subscription box businesses rely on.

Ethical products and packaging are becoming increasingly important for consumers, and we are responsive to this. We advise our client on ways to keep packaging to a minimum and as recyclable as possible. For example, we do a pizza style box, which has two tear-away strips. The first is used for the send label and the second can be used for returns, or for sending items on if required. It means doubling the use of the packaging and thus halving waste.

How does ILG help with the transition from self-packing to outsourcing?

The onboarding is very important, and we assign a dedicated team to each new client to hold their hand through the process. We work closely with them to learn their brand values, know their product inside-out and understand their packaging requirements, as well as helping them to understand how our process works and how we can help them streamline their fulfilment.

For example, we have a degree of packaging expertise and, as part of the onboarding, we work with a packaging partner to devise the best packaging possible for the product, taking robustness, cost of materials and the unboxing experience into consideration. This service can often save the client money compared to their previous expenditure when doing it themselves.

 
When should a subscription box company consider outsourcing?

When the fulfilment process is detracting from their ability to focus on growing the business. Outsourcing gives the company more time to spend pursuing its core purpose.

There are numerous other advantages. Receiving product and storing it becomes demanding as orders increase. Storage requires space and all the ancillary costs that go with it – rent, heat, light, insurance etc. Also, businesses eventually have to take on staff to manage the receipt and storage of stock. With a third-party logistics partner (3PL), all that is taken care of.

In addition, our warehouse staff are highly skilled at what they do, from their speed and accuracy of picking and packing to their dexterity and finesse in putting the boxes together with the consistency I mentioned before. That skill and efficiency is ultimately passed on to the client.

Similarly, our purchasing power enables our clients to benefit from economies of scale when it comes to shipping rates. We can provide access to a variety of carriers, allowing our clients to scale their delivery charges, and our product handling knowledge helps clients as their business grows, particularly if their market becomes international.

Is cost the biggest concern for prospective clients of yours?

Not necessarily.

Protecting the customer experience is hugely important too. Whenever a business makes the transition from in-house to outsourcing, the cost will be a significant consideration. “Could we do this more economically ourselves?”

There comes a point, though, where it becomes a smart business move to outsource. With ILG, any subscription box company sending out 2,500+ boxes per month will find the economies of scale tipping in favour of outsourcing.

I would advise any business considering outsourcing its fulfilment to make sure your 3PL runs an activity-based payment model, this means you get charged according to your volume of output, so what you pay reflects the revenue you’re generating.

Are there any other benefits to outsourced fulfilment that might come as a surprise?

Just as our clients are always focusing on the wow factor they deliver to their customers; we try to delight our clients with the quality of our service. We regard it as a partnership, rather than a client-supplier relationship because it works best when both parties collaborate, and the relationship is strong.

So we make sure our communication is excellent. That is helped by our systems, which are set up to integrate with all the popular shopping platforms so that clients can view and track the status of orders in real time. We can also give them access to a suite of reports, containing data they can use for their own business analysis.