August 31, 2020
A wise man once said - “Money saved is profit earned.”
One of the biggest hurdles in your subscription box business is the shipping cost.
You need to make smart choices to save on shipping costs because this is where things can go out of control.
When you are starting your subscription box business , budgets are tight and you want to make the most out of every dollar you spend.
When planning on saving shipping cost we are essentially talking about two things:
Logically speaking, you always begin with the packaging because this is an area that is under your direct control. Luckily, there are plenty of packaging options available in the market and you want to experiment with a few before making your decision.
Smart packaging can allow you to reduce the size and weight of your subscription box which has a direct impact on the shipping cost.
When you are trying to reduce the size or weight of your subscription box, bear in mind that packaging can make or break your customer experience.
And we are talking about two aspects of the customer experience:
Recently, I heard about a subscription box business that managed to pack in the size of a letterbox. The company saves thousands of dollars each year with that one small change.
You don’t have to fit your package that way. And the first thing you need to ask yourself is - “Do I need to ship these items in a box?”
Your packaging depends on the nature, size, and number of items in your box. Here are a few packaging options that you need to be aware of:
Poly mailer: Poly mailers are not only cheap and lightweight, but they also take up less space. They are great options for small non-fragile options such as books, clothing, or anything that is unbreakable.
Rigid mailer: This is a great option for flat items such as photos, prints, and product samples.
Bubble mailer: The bubble mailer provides an extra level of safety compared to regular mailers plus they are extremely lightweight.
Cardboard box: If using the cardboard box is a necessity, make sure you use the right flute size. Most cardboard boxes come in 1/16 e-flute size. For heavier packaging, 1/8 b-flute size is recommended because it is more resistant to wear and tear.
Always use packaging material so your box doesn’t get messed up when the customer opens it. Make sure the inside of your subscription box matches your brand colors and you’ve print material to ensure a first-class customer experience.
We are terrible at guesswork and when it comes to packaging, don’t make that mistake. The fundamental rule of creating great packaging is to test and try out several packaging options. Ask for a sample, and see how products fit into the package. Figure out ways you can fit in the items so they are not mixed up during shipping. Be curious and creative. Get a first-hand experience of unboxing experience to see how you feel about it.
I am sure you might have never thought about this kind of effort in packaging but every minute you spend in making your packing right will pay off in a big way when the shipping volume increases.
The second aspect of saving is directly tied to your shipping company and the fright plans available.
The USPS cubic shipping is one of the cheapest options out there. That’s because the shipping rate is only calculated based on the volume of the shipment instead of the weight. So if you are sending items that are heavier than one pound, this option will save you a lot of costs. However, it isn’t the most reliable option. We’ve heard stories from customers who never received the shipment or the tracking was never updated until the product was delivered. Use this option wisely and only if there is a huge pricing gap compared to other providers.
If your box is lighter than one pound, the DHL e-commerce lightweight shipping is one of the cheapest options out there. It is also quite reliable. You’ll have options to choose between expedited delivery (2-3 days) versus ground shipping (5-7 days). Also, DHL international rates are far cheaper than the USPS international. The downside of the DHL e-commerce lightweight option is that the retail rates are extremely high and you’ll have to negotiate to get the best rates.
Both FedEx SmartPost and UPS SurePost are innovative freight options especially designed for small e-commerce merchants. These options cost far less than the traditional freight because the last mile delivery is taken care of by an individual postman instead of the truck. The only downside of these two options is that the shipping may take longer - around 8 to 10 days. And you can utilize the delayed shipping notification to create an impression that your shipment is fast.
Suppose you advertise that you ship monthly subscription boxes out to the customers on the 1st day of each month. Since you are using FedEx SmartPost/UPS SurePost, you can kit and assemble the box and ship them on the 27th of the previous month. But you simply delay sending the shipping confirmation until the 1st. This gives the customer a perception that their package arrived in just 2 days.
Third-party fulfillment services such as ShipStation have already negotiated great rates with the shipping providers. On top of it, they will determine the best possible shipping provider based on origin and destination locations. Plus, they gain an advantage by mass shipping items for different merchants to the same destination. On top of it, these fulfillment services save your time and effort in sending the shipment as well as handling returns.
So far we have discussed several options to save on shipping costs. We explored various packaging options and looked at the possibility of reducing your package size without compromising on customer experience.
We also looked at the best shipping options to save your costs.
When you are just starting, the volumes are going to be lower so you want to use our negotiation skills and smart packaging to reduce your shipping costs.
Remember, you want to maximize your shipping dollars without compromising on customer experience.
Everything we've learned (and are still learning) about growing a subscription box business.
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