Dealing with Problems – Starting a Subscription Box Company

Credit to Bark on Flickr for picture

Click to navigate to questions & answers:

How do I know how much inventory to stock?
How should I handle returns and refunds?
What should I do to ensure my inventory fits in my boxes?
How can I determine if I’m dealing with a quality vendor before buying in mass?
How should I handle customer service inquiries?

How do I know how much inventory to stock?

The great thing about starting a subscription box is that you are given the opportunity to determine how often you ship out boxes.  So, you can select to just ship out the first week every month, as an example.  If you select this sort of shipping schedule, than you can see how many sales you generate for the first 2/3 of the month before you place your inventory order.  You’ll have a pretty nice idea of your demand each month as well because you know how many subscribers you have going into the month.

Additionally, it is important to note that it is better to have too much inventory rather than too little, because you can always sell the rest of the inventory in boxes of new customers down the line.

How should I handle returns and refunds?

This is a big decision to make when starting a subscription box company.  Whether or not you accept returns is completely your decision, but what I can tell you is that customers really like the peace of mind, especially with the subscription business model, knowing that they can return their box.  And what you will learn is that typically, people are too lazy to go through the refund process!  At Blind Surprise, we will give refunds to anybody that isn’t happy, and our refund rate is well below 0.5%.  So, my recommendation is to accept refunds because it could certainly help your sales figures.  If it ends up killing you, you probably need to re-evaluate the value you are bringing to your customers.

What should I do to ensure my inventory fits in my subscription box?

The worst feeling is when you receive inventory from a vendor for an upcoming box, and it doesn’t fit in your packaging.  There’s a couple ways to avoid this.  First of all, you can have 2-3 different sizes of packing that you have in stock every month.  You can even have a soft envelope packaging on hand just incase you buy something that really doesn’t fit in the boxes.  Secondly, make sure you look at the dimensions of all the inventory you are considering purchasing prior to making any purchase decisions.

How can I determine if I’m dealing with a quality vendor before buying in mass?

The best way to avoid buying crap from a vendor for your subscription box is to buy yourself one of their items beforehand.  This way you can actually feel the product and ensure that you want to invest big bucks in their inventory.  Usually if you approach a vendor and let them know that you’re interested in purchasing in bulk, but want to test out an item, they will be more than happy to send you a sample.

How should I handle customer service inquiries for my subscription box?

When you’re first getting started, just handle customer service through your company inbox.  You will receive a lot of inquiries from people that will want to review your product and ask for samples – so look at their pageranks and traffic beforehand.  These can be very valuable backlinks for SEO, but you want to make sure that they are solid pages.  Our rule of thumb is that we will send out samples to any blogger with a page rank of at least 3.  Customer inquiries at first will be minimal until your volume grows, so you should be able to handle these without much issue.  As you grow though, you can consider services such as ZenDesk (awesome customer service ticketing manager) to manage your customer care.

 

Photo courtesy of Bark on Flickr


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