Shipping is one of the most critical parts of any subscription business because it is factored directly into the cost of goods sold. There are three ways to ship subscription boxes for less, and each provides a different experience for the customers.
Tips for Reducing Shipping Costs for Subscription Boxes
Shipping costs can greatly impact the profitability of a subscription box business. Here are some effective tips for reducing those costs while still providing a good experience for customers.
Use Cubic Pricing
Cubic pricing allows you to ship packages based on volume rather than weight. To qualify, packages must weigh less than 20 lbs and take up less than 0.5 cubic feet of space. To calculate cubic feet: Length x Width x Height / 1728. This formula determines which cubic pricing tier the package falls into.
Fulfillment centers can negotiate discounted cubic rates with major carriers since they ship high volumes. Work with a fulfillment partner to leverage these discounts and reduce your shipping spend.
Leverage USPS SurePost
USPS SurePost is a great budget shipping option. UPS handles the long distance transportation and USPS does the final delivery. This reduces costs since final mile delivery is the most expensive leg.
The hand off between carriers can increase transit time by 1-2 days, but for cost conscious subscription box brands, that's an acceptable tradeoff.
Outsource Fulfillment
Fulfillment centers receive steep discounts on shipping supplies and rates since they move so much volume. This includes boxes, tape, labels, and carrier discounts. They also have optimized processes to keep labor costs low.
By outsourcing your fulfillment rather than doing it in house, you gain instant access to all those cost savings and discounts that you likely can't match on your own.
Carrier Evaluation
When evaluating shipping carriers, look at these key aspects:
- Cost - What are the rates for your most common package sizes and zones?
- Reliability - What is the on-time delivery rate?
- Deliverability - What zip codes and addresses can they deliver to?
- Tracking - How easy is it to track packages and look up info online?
Choosing the right carrier for your business can ensure reliable, on-time delivery that keeps your customers happy.
Next article: How to Ship Subscription Boxes Cheaper